Exhibit 10.1

 

EQC OPERATING TRUST

 

(formerly known as Hub Properties Trust)

 

ARTICLES OF AMENDMENT AND RESTATEMENT OF DECLARATION OF TRUST

 

EQC OPERATING TRUST, a Maryland real estate investment trust (the “Trust”) under
Title 8 of the Corporations and Associations Article of the Annotated Code of
Maryland (“Title 8”), hereby certifies to the State Department of Assessments
and Taxation of Maryland that:

 

FIRST:   The Trust desires to amend and restate its Declaration of Trust, as
amended (the “Declaration”), as currently in effect and as hereinafter amended.

 

SECOND:  The following provisions are all the provisions of the Declaration
currently in effect and as hereinafter amended:

 

ARTICLE I

FORMATION

 

The Trust is a real estate investment trust within the meaning of Title 8.  The
Trust shall not be deemed to be a general partnership, limited partnership,
joint venture, joint stock company or a corporation.

 

ARTICLE II

OPERATIVE PROVISIONS

 

The Declaration includes and is subject to Annex A attached hereto in its
entirety.  The terms and provisions of Annex A are incorporated by reference
herein and are deemed to be a part hereof as if, and with the same effect as if,
such terms and provisions were directly stated herein.  The  Declaration,
including Annex A, sets forth all of the provisions required for the regulation
and governance of the Trust and the administration of its affairs, and the Trust
shall not be required to adopt or maintain bylaws.  Accordingly, upon the filing
and acceptance for record of the Declaration with the Maryland State Department
of Assessments and Taxation, the Trust’s Bylaws shall be automatically repealed
and of no further force or effect.

 

ARTICLE III

NAME

 

The name of the Trust is EQC Operating Trust.

 

The Trustee may further change the name of the Trust without approval of the
unitholders.

 

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ARTICLE IV

PURPOSES AND POWERS

 

The Trust shall have the purposes and powers set forth in Annex A hereto.

 

ARTICLE V

PRINCIPAL OFFICE IN STATE AND RESIDENT AGENT

 

The address of the principal office of the Trust in the State of Maryland is c/o
CSC Lawyers Incorporating Service Company, 7 St. Paul Street, Suite 820,
Baltimore, Maryland 21202.  The Trust may have such offices or places of
business within or outside the State of Maryland as the Trustee may from time to
time determine.

 

The name of the resident agent of the Trust in the State of Maryland is CSC
Lawyers Incorporating Service Company, whose post office address is 7 St. Paul
Street, Suite 820, Baltimore, Maryland 21202.  The resident agent is a citizen
of and resides in the State of Maryland.

 

ARTICLE VI

TRUSTEE; OFFICERS

 

Section 6.1            Number; Nature of the Trustee.  The number of trustees
shall be one (1) (the “Trustee”); provided that the number of trustees may be
increased or, if increased, may be thereafter decreased in the sole discretion
of the Trustee.  The Trustee may be any person, including an individual,
corporation, business trust, estate, trust, partnership, limited partnership,
limited liability company, association or any other legal or commercial entity. 
The name of the current Trustee is as follows:

 

Name

 

Address

Equity Commonwealth

 

Two North Riverside Plaza, Suite 2100, Chicago, IL 60606

 

The records of the Trust shall be revised to reflect the names and addresses of
the then-current Trustee at such times as any change has occurred.

 

Section 6.2            Powers of the Trustee.  Subject to any express
limitations contained in the Declaration, including in Annex A hereto, (a) the
business and affairs of the Trust shall be managed under the direction of the
Trustee, (b) the Trustee shall have full, exclusive and absolute power, control
and authority over any and all property of the Trust, and (c) the Trustee may
take any action as in its sole judgment and discretion is necessary or
appropriate to conduct the business and affairs of the Trust (including, without
limitation, causing the Trust to elect to qualify for federal income tax
treatment as a disregarded entity or a partnership).  The Declaration shall be
construed with the presumption in favor of the grant of power and authority to
the Trustee.  Any construction of the Declaration or determination made in good
faith by the Trustee concerning its powers and authority hereunder shall be
conclusive.  The enumeration and definition of particular powers of the Trustee
included in the Declaration shall in no way be limited or restricted by
reference to or inference from the terms of this or any other provision of the
Declaration or construed or deemed by inference or

 

2

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otherwise in any manner to exclude or limit the powers conferred upon the
Trustee under the general laws of the State of Maryland or any other applicable
laws.

 

Section 6.3            Resignation, Removal or Death.  The Trustee may resign by
written notice to the unitholders, effective upon execution and delivery of such
written notice or upon any future date specified in the notice.  The Trustee may
not be removed by the unitholders with or without cause.

 

Section 6.4            Vacancy.  If for any reason the current Trustee ceases to
be the Trustee, such event shall not terminate the Trust or affect the
Declaration.  Any such vacancy shall be filled, at any regular meeting or at any
special meeting called for that purpose, by a majority of the unitholders.  Any
individual, corporation, business trust, estate, trust, partnership, limited
partnership, limited liability company, association or any other legal or
commercial entity so elected as Trustee shall hold office for the unexpired term
of the Trustee he, she or it is replacing and until a successor is elected and
qualifies.

 

Section 6.5            Action by the Trustee.  The Trustee may act by written
consent, which may be effected in writing or by electronic transmission.

 

Section 6.6            Reliance.  The Trustee and each officer, employee and
agent of the Trust shall, in the performance of his, her or its duties with
respect to the Trust, be fully justified and protected with regard to any act or
failure to act in reliance in good faith upon the books of account or other
records of the Trust, upon an opinion of counsel or upon reports made to the
Trust by any of its officers or employees or by the adviser, accountants,
appraisers or other experts or consultants selected by the Trustees or officers
of the Trust.

 

Section 6.7            Officers.  The Trustee may appoint from time to time such
officers with such titles as the Trustee determines to be necessary or
appropriate.  Any such officers shall exercise such powers and perform such
duties as may be determined from time to time by resolution of the Trustee.

 

ARTICLE VII

UNITS OF BENEFICIAL INTEREST

 

Section 7.1            Authorized Units.  The beneficial interest of the Trust
shall be divided into shares of beneficial interest, which shall be designated
as units (the “Units”).  The Trust has authority to issue 400,000,000 Units,
$0.01 par value per unit.  The Units each shall have the preferences, conversion
or other rights, voting powers, restrictions, limitations as to dividends or
other distributions, qualifications and terms and conditions of redemption for
each class or series as set forth in Annex A.  The Trustees shall have the
powers to issue, classify, re-classify and pay distributions on the Units as set
forth in Annex A.

 

Section 7.2            Outstanding Units.  Upon the filing and acceptance for
record of the Declaration with the Maryland State Department of Assessments and
Taxation, all then-outstanding beneficial interests in the Trust held by the
Trustee shall be represented by Units as specified in Annex A.

 

3

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Section 7.3            General Nature of Units.  All Units shall be personal
property entitling the unitholders only to those rights provided in the
Declaration.  The unitholders shall have no interest in the property of the
Trust and shall have no right to compel any partition, division, dividend or
distribution of the Trust or of the property of the Trust.  The death of a
unitholder shall not terminate the Trust.  The Trust is entitled to treat as
unitholders only those persons in whose names Units are registered as holders of
Units on the unit ledger of the Trust.

 

Section 7.4            Fractional Units.  The Trust may, without the consent or
approval of any unitholder, issue fractional Units, eliminate a fraction of a
Unit by rounding up or down to a full Unit, arrange for the disposition of a
fraction of a Unit by the person entitled to it, or pay cash for the fair value
of a fraction of a Unit.

 

Section 7.5            Units Subject to Declaration.  All persons who shall
acquire a Unit shall acquire the same subject to the provisions of the
Declaration.

 

Section 7.6            Transferability; Transfer Restrictions.  Units in the
Trust shall be transferable only in accordance with the provisions of Annex A. 
By accepting the transfer of Units, whether of record or beneficially, all
future unitholders agree to be bound by the provisions of Annex A as fully as if
such unitholders had executed a stockholders agreement containing all of such
provisions.

 

ARTICLE VIII

UNITHOLDERS

 

Section 8.1            Preemptive and Appraisal Rights.  Except as may be
provided by the Trustee in setting the terms of classified or reclassified Units
or as may otherwise be provided by a contract approved by the Trustee, no holder
of Units shall, as such holder, (a) have any preemptive right to purchase or
subscribe for any additional Units or any other security of the Trust which it
may issue or sell or (b) have any right to, or otherwise be entitled to,
exercise any rights of an objecting stockholder under Title 8 or under Title 3,
Subtitle 2 of the MGCL or any successor statute, unless the Trustee shall
determine that such rights apply, with respect to all or any Units of all or any
classes or series of Units, to one or more transactions occurring after the date
of such determination in connection with which holders of such Units would
otherwise be entitled to exercise such rights.

 

Section 8.2            Approval of Extraordinary Actions.  Except as
specifically provided in the Declaration (including Annex A), notwithstanding
any provision of law permitting or requiring any action to be taken or approved
by the affirmative vote of the holders of Units entitled to cast a greater
proportion of votes, any such action shall be effective and valid if declared
advisable by the Trustee and taken or approved by the affirmative vote of
holders of Units entitled to cast a majority of all the votes entitled to be
cast on the matter.  This Section 8.2 is intended to accomplish the purpose
described in Section 8-202(c) of Title 8.

 

Section 8.3            Meetings Generally.  Meetings of the unitholders shall be
held in accordance with the terms and provisions of Annex A; provided that an
annual meeting of the unitholders for the transaction of any business within the
powers of the Trust shall be held each year at a

 

4

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convenient location and on proper notice, on a date and at the time set by the
Trustee; provided further that every third year (beginning with the third annual
meeting following the date of the Declaration) such business shall include the
election of the Trustee.  Failure to hold an annual meeting does not invalidate
the Trust’s existence or affect any otherwise valid acts of the Trust.  If there
is no Trustee, the officers of the Trust shall promptly call a special meeting
of the unitholders entitled to vote for the election of a successor Trustee.

 

ARTICLE IX

LIABILITY OF TRUSTEE, UNITHOLDERS, OFFICERS,
EMPLOYEES AND AGENTS, AND OTHER MATTERS

 

Section 9.1            Limitation of Liability of Unitholders, Trustee,
Officers, Employees and Agents for Obligations of the Trust.  The Trustee and
the officers, employees and agents of the Trust and the Trustee, in incurring
any debts, liabilities or obligations or in taking or omitting any other actions
for or in connection with the Trust, are, and shall be deemed to be, acting as
the trustee, officers, employees or agents of the Trust and not in their own
individual capacities.  Except as otherwise provided in Section 9.3 hereof with
respect to liability of the Trustee or officers, agents or employees of the
Trust or the Trustee to the Trust or to unitholders, no unitholder, Trustee or
officer, employee or agent of the Trust or the Trustee shall be liable for any
debt, claim, demand, judgment decree, liability or obligation of any kind (in
tort, contract or otherwise) of, against or with respect to the Trust or arising
out of any action taken or omitted for or on behalf of the Trust, and the Trust
shall be solely liable therefor and resort shall be had solely to the property,
real, personal or otherwise, tangible or intangible, which is transferred,
conveyed or paid to or purchased by the Trust or the Trustee and all rents,
income, profits and gains therefrom and which at such time is owned or held by
or for the Trust or the Trustee (the “Trust Estate”) for the payment or
performance thereof, and no unitholder, Trustee or officer, employee or agent of
the Trust or the Trustee shall be subject to any personal liability whatsoever,
in tort, contract or otherwise, to any other person or persons in connection
with the Trust Estate or the affairs of the Trust (or any actions taken or
omitted for or on behalf of the Trust), and all such other persons shall look
solely to the Trust Estate for satisfaction of claims of any nature arising in
connection with the Trust Estate or the affairs of the Trust (or any action
taken or omitted for or on behalf of the Trust).

 

Section 9.2            Express Exculpatory Clauses and Instruments. Any written
instrument creating an obligation of the Trust may include a reference to the
Declaration and provide that neither the unitholders nor the Trustee nor any
officers, employees or agents of the Trust or the Trustee shall be liable
thereunder and that all persons shall look solely to the Trust Estate for the
payment of any claim thereunder or for the performance thereof; however, the
omission of such provision from any such instrument shall not render the
unitholders, the Trustee, or any officer, employee or agent of the Trust or the
Trustee liable nor shall the Trustee or the unitholders or any officer, employee
or agent of the Trust or the Trustee be liable to any one for such omission.

 

Section 9.3            Limitation of Liability of the Trustee, Officers,
Employees and Agents to the Trust and to Unitholders for Acts and Omissions. 
Neither the Trustee nor any officer, employee or agent of the Trust or Trustee
shall have any greater duties than those established by this Declaration or, in
cases as to which such duties are not so established, than those of the

 

5

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directors, officers, employees and agents of a Maryland business corporation in
effect from time to time. Neither the Trustee nor any officer, employee or agent
of the Trust or the Trustee shall be liable to the Trust, unitholders or to any
other person for any act or omission except for its own willful misfeasance, bad
faith, gross negligence or reckless disregard of duty.

 

Section 9.4            Indemnification and Reimbursement of Expenses. The Trust
shall have the power, to the maximum extent permitted by Maryland statutory or
decisional law in effect from time to time, to obligate itself to indemnify, and
to pay or reimburse reasonable expenses in advance of final disposition of a
proceeding to, (a) the Trustee and any individual who is a present or former
unitholder, trustee, officer or agent of the Trust or the Trustee or (b) the
Trustee and any individual who, while a unitholder, trustee, officer or agent of
the Trust or the Trustee and at the express request of the Trust, serves or has
served another corporation, partnership, joint venture, trust, employee benefit
plan or any other enterprise as a director, officer, unitholder, partner or
trustee of such corporation, partnership, joint venture, trust, employee benefit
plan or other enterprise, from and against all claims and liabilities to which
such person may become subject by reason of his being or having been the Trustee
or a unitholder, trustee, officer or agent of the Trust or the Trustee.  The
Trust shall have the power, with the approval of the Trustee, to provide such
indemnification and advancement of expenses to a person who served a predecessor
of the Trust in any of the capacities described in (a) or (b) above and to any
employee or agent of the Trust or a predecessor of the Trust.

 

Section 9.5            Right of the Trustee, Officers, Employees and Agents to
Own Units or Other Property and to Engage in Other Business. The Trustee or any
officer, employee or agent of the Trust may acquire, own, hold and dispose of
Units in the Trust, for his individual account, and may exercise all rights of a
unitholder to the same extent and in the same manner as if not the Trustee or an
officer, employee or agent of the Trust.

 

Section 9.6          Transactions Between the Trustee, Officers, Employees or
Agents and the Trust. Subject to any express restrictions in this Declaration or
adopted by the Trustee by resolution, the Trust may enter into any contract or
transaction of any kind with any person, including the Trustee or any officer,
employee or agent of the Trust or any person affiliated with the Trustee,
officer, employee or agent of the Trust, whether or not any of them has a
financial interest in such transaction.

 

Section 9.7          Persons Dealing with the Trustee, Officers, Employees or
Agents. Any act of the Trustee or of the officers, employees or agents of the
Trust purporting to be done in their capacity as such, shall, as to any persons
dealing with the Trustee or such officers, employees or agents, be conclusively
deemed to be within the purposes of this Trust and within the powers of the
Trustee or such officers, employees or agents. No person dealing with the
Trustee or with the officers, employees or agents of the Trust shall be bound to
see to the application of any funds or property passing into their hands or
control. The receipt of the Trustee or of authorized officers, employees or
agents of the Trust, for moneys or other consideration, shall be binding upon
the Trust.

 

Section 9.8          Reliance. The Trustee and the officers, employees and
agents of the Trust may consult with counsel (which may be a firm in which one
or more of the officers, employees

 

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or agents of the Trust is or are members) and the advice or opinion of such
counsel shall be full and complete personal protection to the Trustee and all
the officers, employees and agents of the Trust in respect of any action taken
or suffered by them in good faith and in reliance on or in accordance with such
advice or opinion. In discharging their duties, the Trustee or the officers,
employees or agents of the Trust, when acting in good faith, may rely upon
financial statements of the Trust represented to them to fairly present the
financial position or results of operations of the Trust by the chief financial
officer of the Trust or the officer of the Trust having charge of its books of
account, or stated in a written report by an independent certified public
accountant fairly to present the financial position or results of operations of
the Trust. The Trustee and the officers, employees and agents of the Trust may
rely, and shall be personally protected in acting, upon any instrument or other
document believed by them to be genuine.

 

ARTICLE X

AMENDMENTS

 

The Trust reserves the right from time to time to make any amendment to the
Declaration, now or hereafter authorized by law, including, without limitation,
any amendment altering the terms or contract rights, as expressly set forth in
the Declaration, of any Units.  All rights and powers conferred by the
Declaration on unitholders, Trustees and officers are granted subject to this
reservation.  The Trust shall file Articles of Amendment as required by Maryland
law.  All references to the Declaration shall include all amendments thereto. 
The Declaration may be amended from time to time only in accordance with the
provisions set forth in Annex A.  As permitted by Section 8.2 hereof, and except
as otherwise provided in Annex A or permitted by Title 8, any amendment to the
Declaration shall be valid only if recommended by the Trustee and approved by
the affirmative vote of holders of Units entitled to cast a majority of all the
votes entitled to be cast on the matter.

 

ARTICLE XI

MISCELLANEOUS

 

Section 11.1          Governing Law.  The Declaration is executed by the
undersigned Trustees and delivered in the State of Maryland with reference to
the laws thereof, and the rights of all parties and the validity, construction
and effect of every provision hereof shall be subject to and construed in
accordance with the laws of the State of Maryland without regard to conflicts of
laws provisions thereof.

 

Section 11.2          Reliance by Third Parties.  Any certificate shall be final
and conclusive as to any person dealing with the Trust if executed by the
Secretary or an Assistant Secretary of the Trust or a Trustee, and if certifying
to: (a) the number or identity of Trustees, officers of the Trust or
unitholders; (b) the due authorization of the execution of any document; (c) the
action or vote taken, and the existence of a quorum, at a meeting of the Trustee
or unitholders; (d) a copy of the Declaration as a true and complete copy as
then in force; (e) an amendment to the Declaration; (f) the termination of the
Trust; or (g) the existence of any fact relating to the affairs of the Trust. 
No purchaser, lender, transfer agent or other person shall be bound to make any
inquiry concerning the validity of any transaction purporting to be made by the
Trust on its behalf or by any officer, employee or agent of the Trust.

 

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Section 11.3          Severability.

 

(a)           The provisions of the Declaration are severable, and if the
Trustee shall determine, with the advice of counsel, that any one or more of
such provisions (the “Conflicting Provisions”) are in conflict with Title 8 or
other applicable federal or state laws, the Conflicting Provisions, to the
extent of the conflict, shall be deemed never to have constituted a part of the
Declaration, even without any amendment of the Declaration and without affecting
or impairing any of the remaining provisions of the Declaration or rendering
invalid or improper any action taken or omitted prior to such determination.  No
Trustee shall be liable for making or failing to make such a determination.  In
the event of any such determination by the Trustee, the Trustee shall amend the
Declaration in the manner provided in Annex A.

 

(b)           If any provision of the Declaration shall be held invalid or
unenforceable in any jurisdiction, such holding shall apply only to the extent
of any such invalidity or unenforceability and shall not in any manner affect,
impair or render invalid or unenforceable such provision in any other
jurisdiction or any other provision of the Declaration in any jurisdiction.

 

Section 11.4          Construction.  In the Declaration, unless the context
otherwise requires, words used in the singular or in the plural include both the
plural and singular and words denoting any gender include all genders.  The
title and headings of different parts are inserted for convenience and shall not
affect the meaning, construction or effect of the Declaration.

 

Section 11.5          Recordation.  The Declaration and any articles of
amendment hereto or articles supplementary hereto shall be filed for record with
the Maryland State Department of Assessments and Taxation and may also be filed
or recorded in such other places as the Trustee deem appropriate, but failure to
file for record the Declaration or any articles of amendment hereto in any
office other than in the State of Maryland shall not affect or impair the
validity or effectiveness of the Declaration or any amendment hereto.  A
restated Declaration shall, upon filing, be conclusive evidence of all
amendments contained therein and may thereafter be referred to in lieu of the
original Declaration and the various articles of amendments thereto.

 

*  *  *  *  *

 

THIRD:  The foregoing amendment and restatement of the Declaration was duly
advised by the Trustees of the Trust and approved by the unitholders of the
Trust.

 

FOURTH:

 

(a)         Immediately prior to the amendment and restatement of the
Declaration, the Trust had authorized 200,000,000 shares of beneficial interest,
consisting of 100,000,000 common shares of beneficial interest, par value $0.01
per share, and 100,000,000 preferred shares of beneficial interest, par value
$0.01 per share.

 

(b)         Immediately following the amendment and restatement of the
Declaration,  the Trust had authorized 400,000,000 shares of beneficial
interest, par value $0.01 per share.

 

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(c)         Prior to the amendment and restatement of the Declaration, the
aggregate par value of all classes of units of beneficial interest was
$2,000,000.  Following the amendment and restatement of the Declaration, the
aggregate par value of all classes of units of beneficial interest was
$4,000,000.

 

FIFTH: The current address of the principal office of the Trust is Two North
Riverside Plaza, Suite 2100, Chicago, IL 60606.

 

SIXTH: The name and address of the Trust’s current resident agent is CSC Lawyers
Incorporating Service Company, 7 St. Paul Street, Suite 820, Baltimore, Maryland
21202.

 

SEVENTH:  The current number of Trustees is one (1), and the name of the Trustee
currently in office is Equity Commonwealth.

 

EIGHTH:  These Articles of Amendment and Restatement of Declaration of Trust
shall become effective immediately upon filing and acceptance for record.

 

[Remainder of page intentionally left blank]

 

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IN WITNESS WHEREOF, as of this 10th day of November, 2016, the Trust has caused
these Articles of Amendment and Restatement of Declaration of Trust to be
executed and acknowledged in its name and on its behalf by its President and
Chief Executive Officer and attested to by its Executive Vice President, General
Counsel and Secretary; and the President and Chief Executive Officer
acknowledges that these Articles of Amendment and Restatement of Declaration of
Trust are the act of the Trust, and the President and Chief Executive Officer
further acknowledges that, as to all matters or facts set forth herein that are
required to be verified under oath, such matters and facts are true in all
material respects to the best of his knowledge, information and belief, and that
this statement is made under the penalties for perjury.

 

 

EQC OPERATING TRUST

 

 

 

 

 

 

 

By:

/s/ Adam Markman

 

 

Adam Markman

 

 

Executive Vice President, Chief Financial Officer and Treasurer

 

ATTEST:

 

 

By:

/s/ Orrin Shifrin

 

 

Orrin Shifrin

 

 

Executive Vice President, General

 

 

Counsel and Secretary

 

 

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ANNEX A

TO

DECLARATION OF TRUST OF

EQC OPERATING TRUST

 

ADDITIONAL TERMS

 

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TABLE OF CONTENTS

 

 

 

 

Page

 

 

 

ARTICLE I DEFINED TERMS

 

A-1

 

 

 

ARTICLE II TERM; PURPOSE

 

A-14

 

 

 

Section 2.1

Term

 

A-14

Section 2.2

Purpose and Business

 

A-14

Section 2.3

Powers

 

A-14

 

 

 

 

ARTICLE III CAPITAL CONTRIBUTIONS AND ISSUANCES OF UNITS

 

A-15

 

 

 

Section 3.1

Capital Contributions of the Unitholders

 

A-15

Section 3.2

Issuance of Units

 

A-15

Section 3.3

No Preemptive Rights

 

A-16

Section 3.4

Other Contribution Provisions

 

A-16

Section 3.5

No Interest on Capital

 

A-17

Section 3.6

LTIP Units

 

A-17

Section 3.7

Conversion of LTIP Units

 

A-19

 

 

 

 

ARTICLE IV DISTRIBUTIONS

 

A-22

 

 

 

Section 4.1

Requirement and Characterization of Distributions

 

A-22

Section 4.2

Distributions in Kind

 

A-25

Section 4.3

Amounts Withheld

 

A-25

Section 4.4

Distributions upon Liquidation

 

A-25

Section 4.5

Revisions to Reflect Issuance of Units

 

A-25

 

 

 

 

ARTICLE V ALLOCATIONS

 

A-26

 

 

 

Section 5.1

Allocations for Capital Account Purposes

 

A-26

Section 5.2

Revisions to Allocations to Reflect Issuance of Units

 

A-29

 

 

 

 

ARTICLE VI MANAGEMENT AND OPERATIONS OF BUSINESS

 

A-29

 

 

 

Section 6.1

Management

 

A-29

Section 6.2

Title to Company Assets

 

A-34

Section 6.3

Reimbursement of the Trustee

 

A-34

 

A-i

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Section 6.4

Outside Activities of the Trustee; Relationship of Shares to Units; Funding Debt

 

A-37

Section 6.5

Transactions with Affiliates

 

A-40

Section 6.6

Liability of the Trustee

 

A-40

Section 6.7

Other Matters Concerning the Trustee

 

A-41

Section 6.8

Reliance by Third Parties

 

A-42

Section 6.9

Loans by Third Parties

 

A-42

 

 

 

 

ARTICLE VII RIGHTS AND OBLIGATIONS OF UNITHOLDERS

 

A-43

 

 

 

Section 7.1

Limitation of Liability

 

A-43

Section 7.2

Management of Business

 

A-43

Section 7.3

Outside Activities of Unitholders

 

A-43

Section 7.4

Return of Capital

 

A-43

Section 7.5

Rights of Unitholders Relating to the Company

 

A-44

Section 7.6

Redemption Right

 

A-44

 

 

 

 

ARTICLE VIII BOOKS, RECORDS, ACCOUNTING AND REPORTS

 

A-47

 

 

 

Section 8.1

Records and Accounting

 

A-47

Section 8.2

Fiscal Year

 

A-47

Section 8.3

Reports

 

A-48

 

 

 

 

ARTICLE IX TAX MATTERS

 

A-48

 

 

 

Section 9.1

Preparation of Tax Returns

 

A-48

Section 9.2

Tax Elections

 

A-48

Section 9.3

Tax Unitholder and Company Tax Audit Matters

 

A-49

Section 9.4

Organizational Expenses

 

A-51

Section 9.5

Withholding

 

A-51

 

 

 

 

ARTICLE X TRANSFERS AND WITHDRAWALS

 

A-52

 

 

 

Section 10.1

Transfer

 

A-52

Section 10.2

Transfers and Withdrawals by Trustee

 

A-53

Section 10.3

Transfers by Unitholders

 

A-53

Section 10.4

Substituted Unitholders

 

A-55

Section 10.5

Assignees

 

A-55

Section 10.6

General Provisions

 

A-56

 

 

 

 

ARTICLE XI ADMISSION OF UNITHOLDERS

 

A-58

 

 

 

Section 11.1

Admission of a Successor Trustee

 

A-58

Section 11.2

Admission of Additional Unitholders

 

A-58

Section 11.3

Amendment of Agreement and Declaration

 

A-59

 

 

 

 

ARTICLE XII DISSOLUTION AND LIQUIDATION

 

A-59

 

 

 

Section 12.1

Dissolution

 

A-59

Section 12.2

Winding Up

 

A-59

 

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Section 12.3

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

 

A-60

Section 12.4

Rights of Unitholders

 

A-62

Section 12.5

Notice of Dissolution

 

A-62

Section 12.6

Cancellation of Declaration

 

A-63

Section 12.7

Reasonable Time for Winding Up

 

A-63

Section 12.8

Waiver of Partition

 

A-63

Section 12.9

Liability of Liquidator

 

A-63

 

 

 

 

ARTICLE XIII AMENDMENT OF DECLARATION; MEETINGS

 

A-63

 

 

 

Section 13.1

Amendments

 

A-63

Section 13.2

Meetings of the Unitholders

 

A-64

 

 

 

 

ARTICLE XIV GENERAL PROVISIONS

 

A-66

 

 

 

Section 14.1

Addresses and Notice

 

A-66

Section 14.2

Titles and Captions

 

A-66

Section 14.3

Pronouns and Plurals

 

A-66

Section 14.4

Further Action

 

A-66

Section 14.5

Binding Effect

 

A-66

Section 14.6

Creditors

 

A-66

Section 14.7

Waiver

 

A-66

Section 14.8

Counterparts

 

A-67

Section 14.9

Applicable Law

 

A-67

Section 14.10

Invalidity of Provisions

 

A-67

Section 14.11

Power of Attorney

 

A-67

Section 14.12

Entire Agreement

 

A-68

Section 14.13

No Rights as Shareholders

 

A-68

Section 14.14

Limitation to Preserve REIT Status

 

A-68

 

List of Exhibits and Attachments

 

Exhibit A

Form of Unitholder Registry

Exhibit B

Capital Account Maintenance

Exhibit C

Special Allocation Rules

Exhibit D

Notice of Redemption

Exhibit E

Form of DRO Registry

Exhibit F

Form of Voluntary Conversion Notice

 

 

Attachment A

Series D Preferred Units

 

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ANNEX A

TO

DECLARATION OF TRUST OF

EQC OPERATING TRUST

 

ADDITIONAL TERMS

 

THIS ANNEX A (as may be further amended, supplemented or restated from time to
time, the “Agreement”) constitutes a part of to the Declaration of Trust (the
“Declaration”) of EQC Operating Trust (the “Company”) and is incorporated by
reference therein and deemed to be a part thereof as if, and with the same
effect as if, such terms and provisions were directly stated therein.  This
Agreement constitutes not only an integral part of the Declaration but also a
separate agreement among all of the holders of Units (as defined herein) of the
Company, each of whom is identified on the books and records of the Company.  As
of the date of the Declaration, Equity Commonwealth, a Maryland real estate
investment trust, is the sole trustee and sole Unitholder of the Company.  If,
following the date of the Declaration, another person or persons becomes a
trustee of the Company, this Agreement shall be amended to reflect such
additional trustee or trustees.  Each holder of Units whose name is set forth on
the Unitholder Registry (as hereinafter defined) as a Unitholder shall become a
party to this agreement without further action required on the part of any such
holder.

 

The Company initially was treated for federal income tax purposes as a
corporation that was a “qualified REIT subsidiary” (within the meaning of
Section 856(i) of the Code) of the Trustee.   Effective on July 1, 2016, the
Company elected pursuant to Treasury Regulation Section 301.7701-3(c) to be
treated for federal income tax purposes as a disregarded entity not separate
from its owner (and not as an “association taxable as a corporation”).  Upon the
filing and acceptance for record of the Declaration with the Maryland State
Department of Assessments and Taxation and the admission of a second Unitholder
for federal income tax purposes, the Company will become treated for federal
income tax purposes as a partnership.  The provisions in this Annex A relating
to Capital Accounts (as defined herein) and allocations of Net Income and Net
Loss (each as defined herein) (and items of income, gain, loss, and deduction)
for federal income tax purposes are intended to be consistent with the
provisions of the Code (as defined herein) and the Treasury Regulations (as
defined herein) applicable to entities that are characterized as “partnerships”
for federal income tax purposes.

 

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.

 

“2015 Budget Act Partnership Audit Rules” has the meaning set forth in
Section 9.3.A.

 

“Additional Unitholder” means a Person admitted to the Company as a Unitholder
pursuant to Section 11.2 hereof and who is shown as a Unitholder on Unitholder
Registry.

 

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“Adjusted Capital Account” means the Capital Account maintained for each
Unitholder as of the end of each Fiscal Year or other period (i) increased by
any amounts which such Unitholder 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 Unitholder, the
deficit balance, if any, in such Unitholder’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” means an event in which (i) the Company makes a distribution
of Units on all outstanding Class A Units, (ii) the Company subdivides the
outstanding Class A Units into a greater number of Class A Units or combines the
outstanding Class A Units into a lesser number of Class A Units, (iii) the
Company issues any Units in exchange for its outstanding Class A Units by way of
a reclassification or recapitalization of its Class A Units, or (iv) a similar
transaction involving Class A Units where consideration is not received in
connection with such transaction.  For the avoidance of doubt, the following
shall not be Adjustment Event:  (a) the issuance of Units in a financing,
reorganization, acquisition or similar business transaction; (b) the issuance of
Units pursuant to the Equity Incentive Plan or other compensation plan, or under
a distribution reinvestment plan; or (c) the issuance of any Units to the
Trustee or other Persons in respect of a Capital Contribution to the Company.

 

“Affiliate” means, with respect to any Person, (i) any Person directly or
indirectly controlling, controlled by or under common control with such Person,
or (ii) any officer, director, general partner, Unitholder or trustee of such
Person or any Person referred to in the foregoing clause (i).  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 Unitholders, 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
Company, reduced by any liabilities either assumed by the Company upon such
contribution or to which such property is 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 Unitholder by the Company, the Company’s
Carrying Value of such property at the time such property is distributed,
reduced by any indebtedness either assumed by such Unitholder upon such
distribution or to which such property is subject at the time of distribution.

 

A-2

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“Agreement” has the meaning set forth in the Preamble.

 

“Applicable Special LTIP Unit Distribution Amount” has the meaning set forth
in Section 4.1.D.

 

“Assignee” means a Person to whom one or more Units have been transferred in a
manner permitted under this Agreement, but who has not become a Substituted
Unitholder, and who has the rights set forth in Section 10.5.

 

“Available Cash” means, with respect to any period for which such calculation is
being made, cash of the Company, regardless of source (including Capital
Contributions and loans to the Company), that the Trustee, in its sole and
absolute discretion, determines is appropriate for distribution to the
Unitholders.

 

“Award 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.

 

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

 

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

 

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

 

“Capital Account Limitation” has the meaning set forth in Section 3.7.B.

 

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

 

“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 Unitholders’ Capital Accounts and
(ii) with respect to any other Company property, the adjusted basis of such
property for federal income tax purposes, all as of the time of determination. 
The Carrying Value of any property shall be adjusted from time to time in

 

A-3

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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 Company properties, as deemed appropriate by
the Trustee.

 

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

 

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

 

“Class A Unit Economic Balance” has the meaning set forth in Section 5.1.E.

 

“Class A Unit Transaction” means any transaction or series of related
transactions (including without limitation any Extraordinary Transaction, but
excluding any transaction which constitutes an Adjustment Event) 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.

 

“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.

 

“Company” has the meaning set forth in the Preamble.

 

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

 

“Company Record Date” means the record date established by the Trustee either
(i) for the distribution of Available Cash pursuant to Section 4.1.A, which
record date shall be the same as the record date established by the Trustee for
a distribution to its shareholders of some or all of its portion of such
distribution, or (ii) if applicable, for determining the Unitholders entitled to
vote on or consent to any proposed action for which the consent or approval of
the Unitholders is sought pursuant to Section 13.2.

 

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

 

“Consent of the Non-Trustee Unitholders” means the Consent of the Unitholders
(excluding for this purpose, to the extent any of the following holds Class A
Units, (i) the Trustee, (ii) any Person of which the Trustee 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 Trustee)
holding Class A Units representing more than fifty percent (50%) of the
Percentage Interest of the Class A Units of all Unitholders which are not
excluded pursuant to (i), (ii) and (iii) above.

 

A-4

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“Constituent Person” has the meaning set forth in Section 3.7.F.

 

“Contributed Property” means each property or other asset contributed to the
Company but excluding cash contributed or deemed contributed to the Company. 
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 3.7.B.

 

“Conversion Notice” has the meaning set forth in Section 3.7.B.

 

“Conversion Factor” means 1.0; provided, however, that, if the Trustee
(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 occurred as of
such time) and the denominator of which shall be the actual number of Shares
(determined without the above assumption) issued and outstanding on the record
date for such dividend, distribution, subdivision or combination; and provided
further that if an entity shall cease to be the Trustee (the “Predecessor
Entity”) and another entity shall become the Trustee (the “Successor Entity”),
the Conversion Factor shall be adjusted by multiplying the Conversion Factor by
a fraction, the numerator of which is the Value of one Share of the Predecessor
Entity, determined as of the date when the Successor Entity becomes the Trustee,
and the denominator of which is the Value of one Share of the Successor Entity,
determined as of that same date.  For purposes of the second proviso in the
preceding sentence, if any shareholders of the Predecessor Entity will receive
consideration in connection with the transaction in which the Successor Entity
becomes the Trustee, the numerator in the fraction described above for
determining the adjustment to the Conversion Factor (that is, the Value of one
Share of the Predecessor Entity) shall be the sum of the greatest amount of cash
and the fair market value (as determined in good faith by the Trustee) of any
securities and other consideration that the holder of one Share in the
Predecessor Entity could have received in such transaction (determined without
regard to any provisions governing fractional shares).  Any adjustment to the
Conversion Factor shall become effective immediately after the effective date of
the event retroactive to the record date, if any, for the event giving rise
thereto, it being intended that (x) adjustments to the Conversion Factor are to
be made to avoid unintended dilution or anti-dilution as a result of
transactions in which Shares are issued, redeemed or exchanged without a
corresponding issuance, redemption or exchange of 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 3.7.B.

 

“Convertible Funding Debt” has the meaning set forth in Section 6.4.E.

 

A-5

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“Current Partnership Audit Rules” has the meaning set forth in Section 9.3.A.

 

“Declaration” has the meaning set forth in the Preamble.

 

“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 or other period, 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 or other period,
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 as calculated in accordance with
Regulations Section 1.704-3; provided, however, that if the U.S.  federal income
tax depreciation, amortization, or other cost recovery deduction for such year
is zero and if Depreciation is calculated in accordance with Regulations
Section 1.704-3(b), Depreciation shall be determined with reference to such
beginning Carrying Value using any reasonable method selected by the Trustee.

 

“Distribution Measurement Date” has the meaning set forth in Section 4.1.D.

 

“Distribution Participation Date” has the meaning set forth in Section 4.1.C.

 

“Distribution Payment Date” has the meaning set forth in Section 4.1.C.

 

“DRO” means a deficit restoration obligation, which for a Unitholder is the
amount such Unitholder shall be obligated to contribute to the Company from time
to time as set forth in Section 12.3.

 

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

 

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

 

A-6

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or upon liquidation of such DRO Unitholder’s Units shall be designated in the
DRO Registry as a “Part II DRO Unitholder.”

 

“DRO Registry” means the DRO Registry maintained by the Trustee in the books and
records of the Company 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 5.1.E.

 

“Equity Incentive Plan” means any equity incentive or compensation plan
hereafter adopted by the Company or the Trustee, including, without limitation,
the Equity Commonwealth 2015 Equity Incentive Plan, as amended from time to
time.

 

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

 

“Extraordinary Transaction” has the meaning set forth in Section 10.2.B.

 

“Fiscal Quarter” means any three calendar month quarter of any Fiscal Year of
the Company, which quarters shall end on March 31, June 30, September 30 and
December 31 of each Fiscal Year.

 

“Fiscal Year” means the fiscal year of the Company, which shall be the calendar
year as provided in Section 8.2.

 

“Forced Conversion” has the meaning set forth in Section 3.7.C.

 

“Forced Conversion Notice” has the meaning set forth in Section 3.7.C.

 

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

 

“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
Unitholder, death, total physical disability or entry by a court of competent
jurisdiction adjudicating such Unitholder incompetent to manage his or her
Person or estate, (ii) as to any corporation which is a Unitholder, 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 Unitholder, the dissolution and commencement of winding up of
the partnership or limited liability company, (iv) as to any estate which is a
Unitholder, the distribution by the fiduciary of the estate’s entire interest in
the Company, (v) as to any trustee of a trust which is a Unitholder, the
termination of the trust (but not the substitution of a new trustee) or (vi) as
to any Unitholder, the bankruptcy of such Unitholder.  For purposes of this
definition, bankruptcy of a Unitholder shall be deemed to have occurred when
(a) the Unitholder 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 Unitholder is adjudged as bankrupt or
insolvent, or a final and nonappealable order for relief under any bankruptcy,
insolvency or similar law now

 

A-7

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or hereafter in effect has been entered against the Unitholder, (c) the
Unitholder executes and delivers a general assignment for the benefit of the
Unitholder’s creditors, (d) the Unitholder files an answer or other pleading
admitting or failing to contest the material allegations of a petition filed
against the Unitholder in any proceeding of the nature described in clause
(b) above, (e) the Unitholder seeks, consents to or acquiesces in the
appointment of a trustee, receiver or liquidator for the Unitholder or for all
or any substantial part of the Unitholder’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 Unitholder’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 Trustee, (C) a Unitholder, or (D) any direct or indirect
trustee, manager, director, officer, employee, Unitholder, partner or
shareholder of the Company, the Trustee or a Unitholder, and (ii) such other
Persons (including Affiliates of the Trustee, a Unitholder or the Company) as
the Trustee may designate from time to time (whether before or after the event
giving rise to potential liability), in its sole and absolute discretion.

 

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

 

“Liquidating Event” has the meaning set forth in Section 12.1.

 

“Liquidating Gains” has the meaning set forth in Section 5.1.E.

 

“Liquidator” has the meaning set forth in Section 12.2.A.

 

“LTIP Distribution Amount” has the meaning set forth in Section 4.1.C.

 

“LTIP Unit” means a Unit that is designated as an LTIP Unit and that has the
rights, preferences and other privileges designated in Sections 3.6 and 3.7 and
elsewhere in this Agreement in respect of holders of LTIP Units.  The allocation
of LTIP Units among the Unitholders shall be set forth on the Unitholder
Registry.

 

“LTIP Unit Sharing Percentage” means, for an LTIP Unit, the percentage that is
specified as the LTIP Unit Sharing Percentage in the Award Agreement or other
documentation pursuant to which such LTIP Unit is issued or, if no such
percentage is specified, 10%.

 

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

 

“Maryland REIT Law” means Title 8 of the Corporations and Associations
Article of the Annotated Code of Maryland.

 

“Net Income” means, for any taxable period, the excess, if any, of the Company’s
items of income and gain for such taxable period over the Company’s items of
loss and deduction for

 

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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 Company’s
items of loss and deduction for such taxable period over the Company’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 the Equity Incentive Plan, or (ii) any Debt issued by the
Trustee that provides any of the rights described in clause (i).

 

“Non-Trustee” means a Unitholder in the Company that is not a Trustee in the
Company.

 

“Non-Trustee Interest” means a Units of a Unitholder in the Company not
designated as a Trustee Interest representing a fractional part of the Units of
all Unitholders and includes any and all benefits to which the holder of such a
Units 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 Non-Trustee Interest may be expressed as a number of Units.

 

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

 

“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.

 

“Parent Entity” has the meaning set forth in Section 6.3.F.

 

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“Percentage Interest” means, as to a Unitholder holding a class of Units, its
interest in such class, determined by dividing the Units of such class owned by
such Unitholder by the total number of Units of such class then outstanding.

 

“Performance Vested LTIP Unit” means an LTIP Unit that, pursuant to the Award
Agreement granting such LTIP Unit, is subject performance-based vesting.

 

“Person” means an individual, partnership, corporation, limited liability
company, association, trust, joint venture, unincorporated organization and any
government, governmental department or agency or political subdivision thereof.

 

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

 

“Publicly Traded” means listed or admitted to trading on the New York Stock
Exchange, the NASDAQ Stock Market, any nationally or internationally recognized
stock exchange or any successor to any of the foregoing.

 

“Qualified Assets” has the meaning set forth in Section 6.4.A.

 

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

 

“Recapture Income” means any gain recognized by the Company (computed without
regard to any adjustment pursuant to Section 754 of the Code) upon the
disposition of any property or asset of the Company, 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 Company
(other than Nonrecourse Liabilities and liabilities to which Unitholder
Nonrecourse Deductions are attributable in accordance with
Section 1.704-(2)(i) of the Regulations).

 

“Redeeming Unitholder” has the meaning set forth in Section 7.6.A.

 

“Redemption Amount” means either the Cash Amount or the Shares Amount, as
determined by the Trustee, in its sole and absolute discretion; provided,
however, that if the Shares are not Publicly Traded at the time a Redeeming
Unitholder exercises its Redemption Right, the Redemption Amount shall be paid
only in the form of the Cash Amount unless the Redeeming Unitholder, in its sole
and absolute discretion, consents to payment of the Redemption Amount in the
form of the Shares Amount.  A Redeeming Unitholder shall have no right, without
the Trustee’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 7.6.A.

 

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“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 4.1.A.

 

“Residual Gain” or “Residual Loss” means any item of gain or loss, as the case
may be, of the Company 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 10.6.F.

 

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

 

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

 

“Series D Preferred Units” means the series of Units designated as Series D
Cumulative Convertible Preferred Units, with the designations, preferences and
other rights set forth in Attachment A hereto.

 

“Share” means a common share of beneficial interest (or other comparable equity
interest) of the Trustee.   Shares may be issued in one or more classes or
series in accordance with the terms of the organizational documents of the
Trustee.  Shares issued in lieu of the Cash Amount may be either registered or
unregistered Shares at the option of the Trustee.  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 Units for which the reference to Shares is made.  When used with
reference to Class A Units, the term “Shares” refers to the common shares of
beneficial interest (or other comparable equity interest) of the Trustee.

 

“Shares Amount” means a number of Shares equal to the product of the number of
Units offered for redemption by a Redeeming Unitholder times the Conversion
Factor; provided, however, that if the Trustee 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 Company issues corresponding rights to holders of
Units.

 

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“Special LTIP Unit Distribution” has the meaning set forth in Section 4.1.D.

 

“Specified Redemption Date” means the twentieth (20th) Business Day after the
Valuation Date or such shorter period as the Trustee, 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 (30th)
Business Day after receipt by the Trustee 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 Unitholder” means a Person who is admitted as a Unitholder to the
Company pursuant to Section 10.4 and who is shown as a Unitholder in the
Unitholder Registry.

 

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

 

“Target Capital Account Balance” has the meaning set forth in Section 5.1.E.

 

“Tax Unitholder” has the meaning set forth in Section 9.3.A.

 

“Tender Offer” has the meaning set forth in Section 10.2.B.

 

“Time Vested LTIP Unit” means an LTIP Unit that, pursuant to the Award Agreement
granting such LTIP Unit, is subject time-based vesting.

 

“Trustee” means Equity Commonwealth, a Maryland real estate investment trust, or
its successor or permitted assignee, as Trustee of the Company.

 

“Trustee Interest” means an interest in the Company held by the Trustee that is
not designated a Non-Trustee Interest.  A Trustee Interest may be expressed as a
number of Units.

 

“Trustee Payment” has the meaning set forth in Section 14.14.

 

“Units” means a Trustee Interest or a Non-Trustee Interest or LTIP Units (to the
extent the Trustee has awarded LTIP Units), expressed as a number of units,
issued pursuant to Sections 3.1 and 3.2 of this Agreement, including Class A
Units, Series D Preferred Units, LTIP Units and any other classes or series of
Units established after the date hereof, and includes any and all benefits to
which the holder of such Units 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.  The number of Units outstanding and the
Percentage Interests in the Company represented by such Units are set forth in
the Unitholder Registry.

 

“Unitholder(s)” means the Trustee and any other Person that is named as a
Unitholder in the Unitholder Registry or any Substituted Unitholder or
Additional Unitholder, in such Person’s capacity as a Unitholder in the Company.

 

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

 

“Unitholder Nonrecourse Debt” has the meaning set forth in Regulations
Section 1.704-2(b)(4) for “partner nonrecourse debt.”

 

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

 

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

 

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

 

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

 

“Value” means, with respect to one Share of a class of outstanding Shares of the
Trustee 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 Trustee 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 Trustee 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 Trustee are not Publicly Traded,
the Value of the Shares Amount per Unit tendered for redemption (which will be
the Cash Amount per Unit offered for redemption payable pursuant to
Section 7.6.A) means the amount that a holder of one Unit would receive if each
of the assets of the Company were to be sold for its fair market value on the
Specified Redemption Date, the Company were to pay all of its outstanding
liabilities, and the remaining proceeds were to be distributed to the
Unitholders in accordance with the terms of this Agreement.  Such Value shall be
determined by the Trustee, acting in good faith and based upon a commercially
reasonable estimate of the amount that would be realized

 

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by the Company if each asset of the Company (and each asset of each partnership,
limited liability company, trust, joint venture or other entity in which the
Company owns a direct or indirect interest) were sold to an unrelated purchaser
in an arms’ length transaction where neither the purchaser nor the seller were
under economic compulsion to enter into the transaction (without regard to any
discount in value as a result of the Company’s minority interest in any property
or any illiquidity of the Company’s interest in any property).

 

“Vested LTIP Units” means LTIP Units that have vested under the terms of an
Award Agreement or Equity Incentive Plan applicable to such Units or pursuant to
any other agreement between the LTIP Unitholder and the Company.

 

“Voluntary Conversion Right” has the meaning set forth in Section 3.7.B.

 

ARTICLE II
TERM; PURPOSE

 

Section 2.1                                   Term

 

The term of the Company commenced on September 12, 1996, and shall continue
until dissolved pursuant to the provisions of Article XII or as otherwise
provided by law.

 

Section 2.2                                   Purpose and Business

 

The purpose and nature of the business to be conducted by the Company is (i) to
conduct any business that may be lawfully conducted by a real estate investment
trust 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 Trustee and, if different, the Trustee, at all times to be
classified as a REIT, unless the Trustee 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 Company.  In connection with the foregoing, and without
limiting the Trustee’s right, in its sole and absolute discretion, to cease
qualifying as a REIT, the Unitholders acknowledge that the status of the Trustee
as a REIT inures to the benefit of all the Unitholders and not solely to the
Trustee or its Affiliates, Unitholders and shareholders.

 

Section 2.3                                   Powers

 

The Company shall have all of the powers granted to real estate investment
trusts by Title 8 and all other powers set forth in the Declaration that are not
inconsistent with law and are appropriate to promote and attain the purposes set
forth in the Declaration.  The Company 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 Company, including, without
limitation, full power and authority, directly or through its ownership interest
in other entities, to enter into,

 

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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 Company shall
not take, or shall refrain from taking, any action which, in the judgment of the
Trustee, in its sole and absolute discretion, (i) could adversely affect the
ability of the Trustee to continue to qualify as a REIT (if such entity has
chosen to attempt to qualify as a REIT), (ii) could subject the Trustee to any
taxes under Section 857 or Section 4981 of the Code, or (iii) could violate any
law or regulation of any governmental body or agency having jurisdiction over
the Trustee or its securities, unless such action (or inaction) shall have been
specifically consented to by the Trustee in writing.

 

ARTICLE III
CAPITAL CONTRIBUTIONS AND ISSUANCES
OF UNITS

 

Section 3.1                                   Capital Contributions of the
Unitholders

 

Prior to or concurrently with filing and acceptance for record of the
Declaration with the Maryland State Department of Assessments and Taxation, the
Unitholders have made the Capital Contributions as set forth in the Unitholder
Registry.  On the date hereof, the Unitholders own Units in the amounts set
forth in the Unitholder Registry and have Percentage Interests in the Company as
set forth in the Unitholder Registry.  The number of Units and Percentage
Interest shall be adjusted in the Unitholder Registry from time to time by the
Trustee to the extent necessary to reflect accurately exchanges, redemptions,
Capital Contributions, the issuance of additional Units or similar events having
an effect on a Unitholder’s Percentage Interest occurring after the date hereof
in accordance with the terms of this Agreement.  One thousand (1,000) Units
shall be deemed to be the Trustee’s Units and shall be the Trustee Interest of
the Trustee, and all other Units held by the Trustee shall be deemed to be
Unitholder Interests and shall be held by the Trustee in its capacity as a
non-Trustee in the Company.  Except as provided in Sections 6.4, 9.5, and 12.3
hereof, the Unitholders shall have no obligation to make any additional Capital
Contributions or provide any additional funding to the Company (whether in the
form of loans, repayments of loans or otherwise).  Except as otherwise set forth
in Section 12.3 hereof, no Unitholder shall have any obligation to restore any
deficit that may exist in its Capital Account, either upon a liquidation of the
Company or otherwise, provided that such Capital Account deficit did not arise
by reason of distributions in violation of this Agreement or applicable law or
other actions in violation of this Agreement or applicable law.

 

Section 3.2                                   Issuance of Units

 

A.            General.  The Trustee is hereby authorized to cause the Company
from time to time to issue to Unitholders (including the Trustee and its
Affiliates) or other Persons (including, without limitation, in connection with
the contribution of property to the Company or any of its Subsidiaries) Units 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 Units, all as shall be determined, subject to applicable
Maryland law, by the Trustee in its sole and absolute discretion, including,
without limitation, (i) the allocations of items of Company income, gain,

 

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loss, deduction and credit to each such class or series of Units, (ii) the right
of each such class or series of Units to share in Company distributions,
(iii) the rights of each such class or series of Units upon dissolution and
liquidation of the Company, (iv) the rights, if any, of each such class to vote
on matters that require the vote or Consent of the Non-Trustee Unitholders, and
(v) the consideration, if any, to be received by the Company in exchange for
such Units or other Units; provided, however, that no such Units shall be issued
to the Trustee unless either  (a) the Units are issued in connection with the
grant, award or issuance of Shares or other equity interests in the Trustee
(including a transaction described in Section 6.4.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 Units
issued to the Trustee in accordance with this Section 3.2.A, or (b) the
additional Units are issued to all Unitholders holding Units in the same class
in proportion to their respective Percentage Interests in such class.  If the
Company issues Units pursuant to this Section 3.2.A, the Trustee shall make such
revisions to this Agreement (including but not limited to the revisions
described in Section 4.5, Section 5.2 and Section 7.6) as it deems necessary to
reflect the issuance of such Units.

 

B.            Classes of Units.  From and after the date of the Agreement, the
Company shall have three classes of Units entitled “Class A Units,” “Series D
Preferred Units” and “LTIP Units,” and such additional classes of Units as may
be created by the Trustee pursuant to Section 3.2.A.  Class A Units, LTIP Units
or a class of Units created pursuant to Section 3.2.A, at the election of the
Trustee, in its sole and absolute discretion, may be issued to newly admitted
Unitholders in exchange for the contribution by such Unitholders of cash, real
estate partnership interests, stock, notes or other assets or consideration;
provided, however, that any Unit that is not specifically designated by the
Trustee as being of a particular class shall be deemed to be a Class A Unit. 
The terms of the LTIP Units shall be in accordance with Sections 3.6 and 3.7.

 

Section 3.3                                   No Preemptive Rights

 

Except to the extent expressly granted by the Company 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
Company or (ii) issuance or sale of any Units.

 

Section 3.4                                   Other Contribution Provisions

 

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

 

B.            Mergers.  To the extent the Company acquires any property (or an
indirect interest therein) by the merger of any other Person into the Company or
with or into a Subsidiary of the Company, Persons who receive Units in exchange
for their interest in the Person merging into the Company or with or into a
Subsidiary of the Company shall be deemed to have been admitted as Additional
Unitholders pursuant to Section 11.2 and shall be deemed to have made Capital
Contributions as provided in the applicable merger agreement (or if not so
provided, as

 

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determined by the Trustee in its sole and absolute discretion) and as set forth
in the Unitholder Registry.

 

Section 3.5                                   No Interest on Capital

 

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

 

Section 3.6                                   LTIP Units

 

A.            Issuance of LTIP Units.  The Trustee may from time to time issue
LTIP Units to employees, officers, directors or trustees of the Company, the
Trustee or any of their respective Subsidiaries, for such consideration,
including a cash capital contribution in such amount, as the Trustee may
determine to be appropriate, and admit such Persons as Unitholders of the
Company.  Subject to the following provisions of this Section 3.6 and Sections
3.7 and 5.1.E, LTIP Units shall be treated as Class A Units, with all of the
rights, privileges and obligations attendant thereto.  For purposes of computing
the Unitholders’ 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, subject to the following provisions of this Section 3.6 and Sections
3.7 and 5.1.E, the Company 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:

 

(i)            If an Adjustment Event occurs, then the Trustee 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.  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.  If the
Company takes an action affecting the Class A Units other than actions
specifically defined as “Adjustment Events” and in the opinion of the Trustee
such action would require an adjustment to the LTIP Units to maintain the
one-to-one correspondence described above, the Trustee shall have the right to
make such adjustment to the LTIP Units, to the extent permitted by law and by
any applicable Equity Incentive Plan, in such manner and at such time as the
Trustee, in its sole discretion, may determine to be appropriate under the
circumstances.   After filing of such certificate, the Company 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)           Subject to the provisions of Sections 4.1.C, 4.1.D and 4.1.E, the
LTIP Unitholders shall, when, as and if authorized and declared by the Trustee
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 paid to holders of Class A Units on the Company Record Date established by
the Trustee 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 unless equal distributions have been or
contemporaneously are authorized, declared and paid on the LTIP Units.

 

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B.                                    Priority.  Subject to the provisions of
this Section 3.6 and the special provisions of Sections 3.7 , 4.1.C, 4.1.D and
4.1.E, the LTIP Units shall rank pari passu with the Class A 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 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 Award Agreement, an LTIP Unitholder
shall be entitled to transfer his or her LTIP Units to the same extent, and
subject to the same restrictions as holders of Class A Units are entitled to
transfer their Class A Units pursuant to Article X.

 

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

 

(i)                                     Award Agreements.  LTIP Units may, in
the sole discretion of the Trustee, be issued subject to vesting, forfeiture and
additional restrictions on transfer pursuant to the terms of an Award
Agreement.  The terms of any Award Agreement may be modified by the Trustee from
time to time in its sole discretion, subject to any restrictions on amendment
imposed by the relevant Award Agreement or by any applicable Equity Incentive
Plan.

 

(ii)                                  Repurchase, Forfeiture and Cancellation. 
Unless otherwise specified in the Award Agreement, upon the occurrence of any
event specified in an Award Agreement as resulting in either the right of the
Company or the Trustee to repurchase LTIP Units at a specified purchase price or
some other forfeiture of any LTIP Units, then if the Company or the Trustee
exercises such right to repurchase or such forfeiture occurs in accordance with
the applicable Award 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 Award Agreement, no
consideration or other payment shall be due with respect to any LTIP Units that
have been forfeited or cancelled, other than any distributions declared with
respect to a Company Record Date prior to the effective date of the forfeiture
or cancellation.  In connection with any repurchase, forfeiture or cancellation
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 5.1.E hereof, 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 5.1.E.  LTIP Units
shall be allocated Net Income and Net Loss, for any taxable year or portion of a
taxable year occurring after such issuance and prior to the Distribution
Participation Date for such LTIP Units, in amounts per LTIP Unit equal to the
amounts allocated per Class A Unit for the same period multiplied by the LTIP
Unit Sharing Percentage for such LTIP Units.  Commencing with the portion of the
taxable year of the Company that begins on the Distribution Participation Date
established for any LTIP Units, such LTIP Units shall be allocated Net Income
and Net Loss in amounts per LTIP Unit equal to the amounts allocated per Class A
Unit.  The allocations provided by the preceding sentence shall be subject to
Section 5.1.A and Section 5.1.B of the Agreement.  The Trustee is authorized in
its discretion to delay or accelerate the participation of the LTIP Units in
allocations of Net Income

 

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and Net Loss, or to adjust the allocations made after the Distribution
Participation Date, so that the ratio of (i) the total amount of Net Income or
Net Loss allocated with respect to each LTIP Unit in the taxable year in which
that LTIP Unit’s Distribution Participation Date falls, to (ii) the total amount
distributed to that LTIP Unit with respect to such period, is equal to such
ratio as computed for the Class A Units held by the Trustee.  In addition, the
Trustee may, in its sole discretion, specially allocate net income or gain
realized after the date an LTIP Unit was issued by the Company to such LTIP Unit
to prevent Section 4.1.E from reducing the amount distributed to such LTIP Unit.

 

(iv)                              Redemption.  The Redemption Right provided to
the holders of Class A Units under Section 7.6 hereof 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 3.7.

 

(v)                                 Conversion to Class A Units.  Vested LTIP
Units are eligible to be converted into Class A Units in accordance with Section
3.7.

 

D.                                    Voting.  LTIP Units shall (a) have the
same voting rights as Class A Units, 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 Company 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 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
Trustee); but subject, in any event, to the following provisions:

 

(i)                                     with respect to any Class A Unit
Transaction, so long as the LTIP Units are treated in accordance with Section
3.7.F hereof, 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 Units or
of any class or series of Units 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 3.7                                   Conversion of LTIP Units

 

A.                                    Automatic Conversion.  Unless sooner
converted pursuant to the following paragraphs of this Section 3.7, each LTIP
Unit will convert automatically, without any action by

 

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the holder of such LTIP Unit, into one (1) fully paid and non-assessable Class A
Unit, giving effect to all adjustments (if any) made pursuant to Section 3.6
hereof, on the date on which both of the following conditions are satisfied with
respect to such LTIP Unit: (i) such LTIP Unit becomes a Vested LTIP Unit, and
(ii) Economic Capital Account Balance attributable to such LTIP Unit becomes
equal to the Class A Unit Economic Balance; provided, however, that any Special
LTIP Unit Distribution payable with respect to such LTIP Unit is paid at the
time of or prior to such conversion.

 

B.                                    Voluntary Conversion Right.

 

(i)                                     To the extent an LTIP Unitholder’s LTIP
Units have not automatically converted into Class A Units pursuant to Section
3.7.A, such holder shall have the right (the “Voluntary Conversion Right”), at
such holder’s option, at any time to convert all or a portion of such holder’s
Vested LTIP Units into a number of fully paid and non-assessable Class A Units,
giving effect to all adjustments (if any) made pursuant to Section 3.6 hereof,
equal to (x) the Economic Capital Account Balance of such LTIP Unitholder, to
the extent attributable to its ownership of such LTIP Units being converted,
divided by (y) the Class A Unit Economic Balance, in each case as determined as
of the effective date of conversion (the “Capital Account Limitation”);
provided, however, that an LTIP Unitholder may not exercise the Voluntary
Conversion Right for fewer than one thousand (1,000) LTIP Units or, if such
holder holds fewer than one thousand (1,000) Vested LTIP Units, all of the
Vested LTIP Units held by such holder.  LTIP Unitholders shall not have the
right to convert LTIP Units into Class A Units until such LTIP Units become
Vested LTIP Units; provided, further, that when an LTIP Unitholder is notified
of the expected occurrence of an event that will cause his or her LTIP Units to
become Vested LTIP Units, such LTIP Unitholder may deliver a Conversion Notice
(as provided in clause (ii) below) 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 Company subject to such condition.

 

(ii)                                  In order to exercise its Voluntary
Conversion Right, an LTIP Unitholder shall deliver a notice (a “Conversion
Notice”) in the form attached as Exhibit F to this Agreement to the Company
(with a copy to the Trustee) not less than ten (10) nor more than sixty (60)
days prior to a date (the “Conversion Date”) specified in such Conversion
Notice; provided, however, that if the Trustee has not given to the LTIP
Unitholders notice of a proposed or upcoming Class A Unit Transaction at least
thirty (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 Trustee 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 14.1.  Each LTIP Unitholder covenants
and agrees with the Company that all LTIP Units to be converted pursuant to this
Section 3.7.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 7.6 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 Company 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

 

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Units into which his or her LTIP Units will be converted can be redeemed by the
Company simultaneously with such conversion, with the further consequence that,
if the Trustee elects to assume and perform the Company’s redemption obligation
with respect to such Class A Units under Section 7.6 hereof 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 LTIP Units
into Class A Units.  The Trustee and LTIP Unitholder shall reasonably cooperate
with each other to coordinate the timing of the events described in the
foregoing sentence.  Each LTIP Unitholder covenants and agrees with the Company
that all LTIP Units to be converted pursuant to this Section 3.7.B shall be free
and clear of all liens and encumbrances.

 

C.                                    Forced Conversion.  To the extent an LTIP
Unitholder’s LTIP Units have not automatically converted into Class A Units
pursuant to Section 3.7.A, the Company, at any time at the election of the
Trustee, may cause any number of Vested LTIP Units held by an LTIP Unitholder to
be converted (a “Forced Conversion”) into a number of fully paid and
non-assessable Class A Units, giving effect to all adjustments (if any) made
pursuant to Section 3.6 hereof, equal to (x) the Economic Capital Account
Balance of such LTIP Unitholder, to the extent attributable to its ownership of
such LTIP Units being converted, divided by (y) the Class A Unit Economic
Balance, in each case as determined as of the effective date of conversion;
provided, however, that any Special LTIP Unit Distribution payable with respect
to such LTIP Units is paid at the time of or prior to such conversion.  In order
to exercise its right of Forced Conversion, the Company shall deliver a notice
(a “Forced Conversion Notice”) to the applicable LTIP Unitholder not less than
ten (10) nor more than sixty (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 14.1.

 

D.                                    Completion of Conversion.  A conversion of
LTIP Units pursuant to this Section 3.7 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 Company 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 Company
shall deliver to such LTIP Unitholder, upon his or her written request, a
certificate of the Trustee 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 Unitholder pursuant to Article X hereof may exercise the rights
of such Unitholder pursuant to this Section 3.7 and such Unitholder shall be
bound by the exercise of such rights by the Assignee.

 

E.                                     Impact of Conversions for Purposes of
Section 5.1.E.  For purposes of making future allocations under Section 5.1.E
hereof following any conversion of LTIP Units and for purposes of 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 Class A Units received upon conversion and the Class A Unit Economic
Balance.

 

F.                                      Class A Unit Transactions.  If the
Company or the Trustee shall be a party to any Class A Unit Transaction, the
Company shall use commercially reasonable efforts to cause each LTIP Unitholder
to be afforded the right to receive in connection with such Class A Unit

 

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Transaction in consideration for the Class A Units into which his or her Vested
LTIP Units are then convertible 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 Company
consolidated or into which the Company merged or which merged into the Company
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 Trustee shall give prompt written notice to each
LTIP Unitholder of such opportunity, and shall use commercially reasonable
efforts to afford the LTIP Unitholders the right to elect, by written notice to
the Trustee, the form or type of consideration to be received upon conversion of
each LTIP Unit (if then convertible pursuant to this Section 3.7) 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 then convertible
pursuant to this Section 3.7 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 receive if such Class A Unit holder failed to make such an
election.  Subject to any Award Agreement and any applicable Equity Incentive
Plan, to the extent any LTIP Units are then outstanding, the Company shall use
commercially reasonable effort to cause the terms of any Class A Unit
Transaction to be consistent with the provisions of this Section 3.7.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 are not then
convertible into Class A Units 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 IV
DISTRIBUTIONS

 

Section 4.1                                   Requirement and Characterization
of Distributions

 

A.                                    Distribution of Operating Income.  The
Trustee shall distribute at least quarterly an amount equal to one hundred
percent (100%) of the Available Cash of the Company with respect to such quarter
or shorter period to the Unitholders in accordance with the terms established
for the class or classes of Units held by such Unitholders who are Unitholders
on the respective Company Record Date with respect to such quarter or shorter
period as provided in Sections 4.1.B, 4.1.C and 4.1.D and in accordance with the
respective terms established for each class of Units.  Notwithstanding anything
to the contrary contained herein, in no event may a Unitholder receive a
distribution of Available Cash with respect to a Unit for a quarter or shorter
period if such Unitholder is entitled to receive a distribution with respect to
a Share for which such Unit has been redeemed or exchanged.  Unless otherwise
expressly provided for herein, in Attachment A hereto with respect to the Series
D Preferred Units, or in the terms established for a new class or series of
Units created in accordance with Article III hereof, no Units shall be entitled
to a distribution in preference to any other Units.  If the Trustee has chosen
to attempt to

 

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qualify as a REIT, the Trustee shall make such reasonable efforts, as determined
by it in its sole and absolute discretion and consistent with the qualification
of the Trustee as a REIT, to distribute Available Cash (a) to Unitholders in a
manner that would not cause any such distribution or portion thereof to be
treated as part of a sale of property to the Company by a Unitholder under
Section 707 of the Code or the Regulations thereunder; provided, however, that
neither the Trustee nor the Company shall have liability to a Unitholder under
any circumstances as a result of any distribution to a Unitholder being so
treated, and (b) to the Trustee in an amount sufficient to enable the Trustee to
make distributions to its shareholders that will enable the Trustee to (1)
satisfy the requirements for qualification as a REIT under the Code and the
Regulations (the “REIT Requirements”), and (2) avoid any federal income or
excise tax liability.

 

B.                                    Method.

 

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

 

(ii)                                  To the extent there is Available Cash
remaining after the payment of any preference in distribution in accordance with
the foregoing clause (i) (if applicable), with respect to Units that are not
entitled 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 Company Record Date).

 

C.                                    Distributions With Respect to LTIP Units. 
Commencing from (i) the date of issuance with respect to Time Vested LTIP Units,
and (ii) with respect to Performance Vested LTIP Units, the date following
completion of the performance period on which the number of LTIP Units subject
to such award is determined based on the results of the performance period (in
each case, the “Distribution Participation Date”), for any quarterly or other
period holders of such LTIP Units shall be entitled to receive, if, when and as
authorized by the Trustee out of funds legally available for the payment of
distributions, regular cash distributions in an amount per unit equal to the
distribution payable on each Class A Unit for the corresponding quarterly or
other period (the “LTIP Distribution Amount”).  In addition, from and after the
Distribution Participation Date, LTIP Units shall be entitled to receive, if,
when and as authorized by the Trustee out of funds or other property legally
available for the payment of distributions, non-liquidating special,
extraordinary or other distributions in an amount per unit equal to the amount
of any non-liquidating special, extraordinary or other distributions payable on
the Class A Units which may be made from time to time.  LTIP Units shall also be
entitled to receive, if, when and as authorized by the Trustee out of funds or
other property legally available for the payment of distributions, distributions
representing proceeds of a sale or other disposition of all or substantially all
of the assets of the Company in an amount per unit equal to the amount of any
such distributions payable on the Class A Units, whether made prior to, on or
after the Distribution Participation Date, provided that the amount of such
distributions shall not exceed the positive balances of the Capital Accounts of
the holders of such LTIP Units to the extent

 

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attributable to the ownership of such LTIP Units.  Distributions on the LTIP
Units, if authorized, shall be payable on such dates and in such manner as may
be authorized by the Trustee (any such date, a “Distribution Payment Date”);
provided that the Distribution Payment Date and the record date for determining
which holders of LTIP Units are entitled to receive a distribution shall be the
same as the corresponding dates relating to the corresponding distribution on
the Class A Units.

 

D.                                    Special LTIP Unit Distribution.  As of the
Distribution Participation Date for a Performance Vested LTIP Unit that is not
forfeited on or prior to such Distribution Participation Date, the holder of
such Performance Vested LTIP Unit will be entitled to receive a special
distribution (the “Special LTIP Unit Distribution”) with respect to such unit,
equal to the Applicable Special LTIP Unit Distribution Amount with respect to
such unit; provided, however, that such amount shall not exceed either (x) the
amount of non-liquidating cash distributions per unit that were paid on the
Class A Units on or after the date of the issuance of such Performance Vested
LTIP Unit (or such other date as is specified as the Distribution Measurement
Date in the Award Agreement or other documentation pursuant to which such
Performance Vested LTIP Unit is issued) (such date being referred to as the
“Distribution Measurement Date” with respect to such Performance Vested LTIP
Unit) and prior to such Distribution Participation Date or (y) the positive
balance of the Capital Account of such holder attributable to such Performance
Vested LTIP Unit.  The “Applicable Special LTIP Unit Distribution Amount” with
respect to a Performance Vested LTIP Unit equals the product of (x) the amount
of non-liquidating cash distributions per unit that were paid on the Class A
Units on or after the Distribution Measurement Date with respect to such
Performance Vested LTIP Unit and prior to the Distribution Participation Date
for such Performance Vested LTIP Unit, multiplied by (y) the LTIP Unit Sharing
Percentage for such Performance Vested LTIP Unit.  The Special LTIP Unit
Distribution for a Performance Vested LTIP Unit will be payable on the first
Distribution Payment Date on or after the Distribution Participation Date for
such Performance Vested LTIP Unit if and when authorized by the Trustee out of
funds legally available for the payment of distributions; provided that, to the
extent not otherwise prohibited by the terms of any class of Units entitled to
any preference in distribution and authorized by the Trustee out of funds
legally available for the payment of distributions, such Special LTIP Unit
Distribution may be paid prior to such Distribution Payment Date.  On or after
the Distribution Participation Date with respect to a Performance Vested LTIP
Unit, if such Performance Vested LTIP Unit is outstanding, no distributions
(other than in Class A Units, LTIP Units or other Units ranking on par with or
junior to such units as to distributions and upon liquidation, dissolution or
winding up of the affairs of the Company) shall be declared or paid or set apart
for payment upon the Class A Units, the LTIP Units or any other Units ranking
junior to or on a parity with the Performance Vested LTIP Unit as to
distributions for any period (other than Special LTIP Unit Distributions with
respect to Performance Vested LTIP Units that had an earlier Distribution
Participation Date) unless the full amount of any Special LTIP Unit Distribution
due with respect to such LTIP Unit have been or contemporaneously are declared
and paid.

 

E.                                     LTIP Units Intended to Qualify as Profits
Interests.  Distributions made pursuant to this Section 4.1 shall be adjusted as
necessary to ensure that the amount apportioned to each LTIP Unit does not
exceed the amount attributable to Company net income or gain realized after the
date such LTIP Unit was issued by the Company.  If distributions are reduced in
accordance with the preceding sentence for a taxable year due to insufficient
net income or gain for such

 

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year, distributions shall be made up in subsequent taxable years when there is
sufficient net income or gain.  The intent of this Section 4.1.E is to ensure
that any LTIP Units issued after the date of this Agreement qualify as “profits
interests” under Revenue Procedure 93-27, 1993-2 C.B. 343 (June 9, 1993) and
Revenue Procedure 2001-43, 2001-2 C.B. 191 (August 3, 2001), and this Section
4.1 shall be interpreted and applied consistently therewith.  The Trustee at its
discretion may amend this Section 4.1.E to ensure that any LTIP Units granted
after the date of this Agreement will qualify as “profits interests” under
Revenue Procedure 93-27, 1993-2 C.B. 343 (June 9, 1993) and Revenue Procedure
2001-43, 2001-2 C.B. 191 (August 3, 2001) (and any other similar rulings or
regulations that may be in effect at such time).

 

F.                                      Liquidation Value Safe Harbor.  The
Company is authorized and directed to elect the liquidation value safe harbor
provided by proposed Treasury Regulations Section 1.83-3(l) (and any successor
provision) and IRS Notice 2005-43, and the Company and each of the Unitholders
(including any Person to whom an interest in the Company is transferred in
connection with the performance of its services) agree to comply with all
requirements of such safe harbor with respect to all interests in the Company
eligible for such safe harbor that are transferred in connection with the
performance of services while such election remains effective.

 

Section 4.2                                   Distributions in Kind

 

The Trustee may determine, in its sole and absolute discretion, to make a
distribution in kind of Company assets to the holders of Units, and such assets
shall be distributed in such a fashion as to ensure that the fair market value
is distributed and allocated in the same manner as a cash distribution in
accordance with Articles IV, V and XII hereof.

 

Section 4.3                                   Amounts Withheld

 

All amounts withheld pursuant to the Code or any provisions of any state or
local tax law and Section 9.5 with respect to any allocation, payment or
distribution to the Trustee, the Unitholders or Assignees shall be treated as
amounts distributed to the Trustee,  Unitholders or Assignees, as the case may
be, pursuant to Section 4.1 for all purposes under this Agreement.

 

Section 4.4                                   Distributions upon Liquidation

 

Proceeds from a Liquidating Event shall be distributed to the Unitholders in
accordance with Section 12.2.

 

Section 4.5                                   Revisions to Reflect Issuance of
Units

 

If the Company issues Units to the Trustee or any Additional Unitholder pursuant
to Article III hereof, the Trustee shall make such revisions to this Article IV
and the Unitholder Registry in the books and records of the Company as it deems
necessary to reflect the terms of the issuance of such Units.  Such revisions
shall not require the consent or approval of any other Unitholder.

 

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ARTICLE V
ALLOCATIONS

 

Section 5.1                                   Allocations for Capital Account
Purposes

 

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

 

A.                                    Net Income.  After giving effect to the
special allocations set forth in Section 1 of Exhibit C of this Agreement and
any special allocations required to be made pursuant to Section 5.1.E, Net
Income shall be allocated:

 

(1)                                 first, to the Trustee to the extent that Net
Loss previously allocated to the Trustee pursuant to Section 5.1.B(6) exceed Net
Income previously allocated to the Trustee pursuant to this clause (1);

 

(2)                                 second, to each DRO Unitholder until the
cumulative Net Income allocated to such DRO Unitholder under this clause (2)
equals the cumulative Net Loss allocated to such DRO Unitholder under Section
5.1.B(5) (and among the DRO Unitholders, pro rata in proportion to their
respective percentages of the cumulative Net Loss allocated to all DRO
Unitholders pursuant to Section 5.1.B(5) hereof);

 

(3)                                 third, to the Trustee until the cumulative
Net Income allocated under this clause (3) equals the cumulative Net Loss
allocated the Trustee under Section 5.1.B(4);

 

(4)                                 fourth, to the holders of any Units that are
entitled to any preference upon liquidation until the cumulative Net Income
allocated under this clause (4) equals the cumulative Net Loss allocated to such
Unitholders under Section 5.1.B(3);

 

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

 

(6)                                 sixth, to the holders of any Units that are
not entitled to any preference upon liquidation until the cumulative Net Income
allocated under this clause (6) equals the cumulative Net Loss allocated to such
Unitholders under Section 5.1.B(2); and

 

(7)                                 finally, with respect to Units 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

 

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(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 Loss.  After giving effect to the
special allocations set forth in Section 1 of Exhibit C of this Agreement and
any special allocations required to be made pursuant to Sections 5.1.E, Net Loss
shall be allocated:

 

(1)                                 first, to the holders of Units that are not
entitled to any preference in distribution or with respect to which
distributions are not limited to any preference in distribution, in proportion
to, and to the extent that, their share of the Net Income previously allocated
pursuant to Section 5.1.A(7) exceeds, on a cumulative basis, the sum of (a)
distributions with respect to such Units pursuant to clause (ii) of Section
4.1.B and (b) Net Loss allocated under this clause (1);

 

(2)                                 second, with respect to classes of Units
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 Loss shall not be allocated to any Unitholder pursuant to this
Section 5.1.B(2) to the extent that such allocation would cause such Unitholder
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
Unitholders’ Adjusted Capital Accounts any amount that a Unitholder is obligated
to contribute to the Company with respect to any deficit in its Capital Account
pursuant to Section 12.3 and (ii) in the case of a Unitholder who also holds
classes of Units that are entitled to any preferences in distribution upon
liquidation, by subtracting from such Unitholders’ 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 Units 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
Loss shall not be allocated to any Unitholder pursuant to this Section 5.1.B(3)
to the extent that such allocation would cause such Unitholder to have an
Adjusted Capital Account Deficit (or increase any existing Adjusted Capital
Account Deficit) (determined in each case by not including in the Unitholders’
Adjusted Capital Accounts any amount that a Unitholder is obligated to
contribute to the Company with respect to any deficit in its Capital Account
pursuant to Section 12.3) at the end of such taxable year (or portion thereof);

 

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

 

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

 

(6)                                 thereafter, to the Trustee.

 

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

 

D.                                    Recapture Income.  Any gain allocated to
the Unitholders upon the sale or other taxable disposition of any Company 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 Unitholders 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 5.1.A and subject to the
immediately following sentence, 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, plus
the aggregate net amount of Net Income and Net Loss allocated to such LTIP Units
prior to the Distribution Participation Date with respect to such LTIP Units
less the amount of any Special LTIP Unit Distributions with respect to such LTIP
Units (such amount, the “Target Capital Account Balance”); provided, however,
that no such Liquidating Gains will be allocated with respect to any particular
LTIP Unit unless and to the extent that such Liquidating Gains, when aggregated
with other Liquidating Gains realized since the issuance of such LTIP Unit,
exceed Liquidating Losses realized since the issuance of such LTIP Unit.
 Liquidating Gains shall be allocated to the LTIP Unitholders pursuant to the
preceding sentence (i) on a “first-in, first-out” basis with respect to LTIP
Units issued on different dates and (ii) on an equal basis with respect to LTIP
Units issued on the same date (i.e., Liquidating Gains shall be allocated first
to the LTIP Units that were issued on the earliest date, and then with respect
to such LTIP Units, equally among such LTIP Units).  After giving effect to the
special allocations set forth in Section 1 of Exhibit C hereto, and
notwithstanding the provisions of Sections 5.1.A and 5.1.B above, in the event
that, due to distributions with respect to Class A Units in which the LTIP Units
do not participate or otherwise, the Economic Capital Account Balances of any
present or former holder of LTIP Units, to the extent attributable to the
holder’s ownership of LTIP Units, exceed the Target Capital Account Balance,
then Liquidating Losses shall be allocated to such holder to the extent
necessary to reduce or eliminate the disparity.  In the event that Liquidating
Gains or Liquidating Losses are allocated under this Section 5.1.E, Net Income

 

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allocable under Section 5.1.A(6) and any Net Loss shall be recomputed without
regard to the Liquidating Gains or Liquidating Losses so allocated.  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 Company, including but not limited to net capital gain
realized in connection with an adjustment to the value of Company assets under
Section 704(b) of the Code made pursuant to Section 1.D of Exhibit B of this
Agreement.  “Liquidating Losses” means any net capital loss realized in
connection with any such event.  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, plus the amount of their share of
any Unitholder Minimum Gain or Company Minimum Gain, in either case to the
extent attributable to their ownership of LTIP 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 5.1.E, but prior to the
realization of any Liquidating Gains.  Similarly, the “Class A Unit Economic
Balance” shall mean (i) the Capital Account balance of the Trustee, plus the
amount of the Trustee’s share of any Unitholder Minimum Gain or Company Minimum
Gain, in either case to the extent attributable to the Trustee’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
5.1.E, but prior to the realization of any Liquidating Gains, divided by (ii)
the number of the Trustee’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 5.1.E.  The parties agree that the intent of this
Section 5.1.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 Trustee’s Class A Units (on a per-Unit basis, other than differences
resulting from the allocation of Net Income and Net Loss allocated to such LTIP
Units prior to the Distribution Participation Date with respect to such LTIP
Units in excess of the amount of Special LTIP Unit Distributions paid with
respect to such LTIP Units), 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
Company, or upon an adjustment to the Unitholders’ 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.

 

Section 5.2                                   Revisions to Allocations to
Reflect Issuance of Units

 

If the Company issues Units to the Trustee or any Additional Unitholder pursuant
to Article III hereof, the Trustee shall make such revisions to this Article V
and the Unitholder Registry in the books and records of the Company as it deems
necessary to reflect the terms of the issuance of such Units, including making
preferential allocations to classes of Units that are entitled thereto.  Such
revisions shall not require the consent or approval of any other Unitholder.

 

ARTICLE VI
MANAGEMENT AND OPERATIONS OF BUSINESS

 

Section 6.1                                   Management

 

A.                                    Powers of Trustee.  Except as otherwise
expressly provided in this Agreement, all management powers over the business
and affairs of the Company are and shall be exclusively

 

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vested in the Trustee, and no Unitholder shall have any right to participate in
or exercise control or management power over the business and affairs of the
Company.  The Trustee may not be removed by the Unitholders with or without
cause.  In addition to the powers now or hereafter granted a Trustee of a real
estate investment trust under applicable law or which are granted to the Trustee
under any other provision of this Agreement, the Trustee shall have full power
and authority to do all things deemed necessary or desirable by it to conduct
the business of the Company, to exercise all powers set forth in Section 2.3 and
to effectuate the purposes set forth in Section 2.2, 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 Company to make distributions to its
Unitholders in such amounts as are required under Section 5.1.A or will permit
the Trustee (so long as the Trustee chooses to attempt to qualify 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 shareholders sufficient to permit the Trustee 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 Trustee, its Subsidiaries or the Company’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 Company’s assets)
and the incurring of any obligations the Trustee deems necessary for the conduct
of the activities of the Company;

 

(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 Company;

 

(3)                                 the acquisition, disposition, mortgage,
pledge, encumbrance, hypothecation or exchange of any or all of the assets of
the Company (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 Company) or the merger,
consolidation, reorganization or other combination of the Company or any
Subsidiary of the Company with or into another entity on such terms as the
Trustee deems proper;

 

(4)                                 the use of the assets of the Company
(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 Trustee, the
Company or any of the Company’s Subsidiaries, the lending of funds to other
Persons (including, without limitation, the Trustee, its Subsidiaries, the
Company’s Subsidiaries and any of their Affiliates) and the repayment of
obligations of the Company and its Subsidiaries and any other Person in which
the Company has an equity investment and the making of capital contributions to,
and equity investments in, its Subsidiaries;

 

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

 

(6)                                 the negotiation, execution, and performance
of any contracts, conveyances or other instruments that the Trustee considers
useful or necessary to the conduct of the Company’s operations or the
implementation of the Trustee’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 Company’s assets;

 

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

 

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

 

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

 

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

 

(11)                          the selection, designation of powers, authority
and duties and the dismissal of employees of the Company (including, without
limitation, employees having titles such as “president,” “vice president,”
“secretary” and “treasurer”) and agents, outside attorneys, accountants,
consultants and contractors of the Company and the determination of their
compensation and other terms of employment or hiring, including waivers of
conflicts of interest and the payment of their expenses and compensation out of
the Company’s assets;

 

(12)                          the maintenance of such insurance (including,
without limitation, directors, trustees and officers insurance) for the benefit
of the Company and the Unitholders (including, without limitation, the Trustee)
and the directors, trustees and officers thereof as the Trustee deems necessary
or appropriate;

 

(13)                          the formation of, or acquisition of an interest
(including non-voting interests in entities controlled by Affiliates of the
Company or the Trustee or third parties) in, and the contribution of property
to, any further limited or general partnerships, joint ventures, limited
liability companies, corporations 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 Trustee has
determined to attempt to continue to qualify as a REIT, the Company may not
engage in any such formation, acquisition or contribution that would cause the
Trustee to fail to qualify as a REIT;

 

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(14)                          the control of any matters affecting the rights
and obligations of the Company or any Subsidiary of the Company, 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 Company or any Subsidiary of the Company,
the commencement or defense of suits, legal proceedings, administrative
proceedings, arbitrations or other forms of dispute resolution, the
representation of the Company or any Subsidiary of the Company 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
Company property distributed in kind, using such reasonable method of valuation
as the Trustee 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 Company or any Subsidiary of the Company;

 

(17)                          the exercise of any of the powers of the Trustee
enumerated in this Agreement on behalf of or in connection with any Subsidiary
of the Company or any other Person in which the Company 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 Trustee
enumerated in this Agreement on behalf of any Person in which the Company 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 Trustee for the
accomplishment of any of the powers of the Trustee enumerated in this Agreement;

 

(20)                          the distribution of cash to acquire Units held by
a Unitholder in connection with a Unitholder’s exercise of its Redemption Right
under Section 7.6;

 

(21)                          the determination regarding whether a payment to a
Unitholder who exercises its Redemption Right under Section 7.6 that is assumed
by the Trustee will be paid in the form of the Cash Amount or the Shares Amount,
except as such determination may be limited by Section 7.6.

 

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

 

(23)                          the maintenance of the Unitholder Registry in the
books and records of the Company to reflect the Capital Contributions and
Percentage Interests of the

 

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Unitholders as the same are adjusted from time to time to the extent necessary
to reflect redemptions, Capital Contributions, the issuance and transfer of
Units, the admission of any Additional Unitholder or any Substituted Unitholder
or otherwise;

 

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

 

(25)                          the issuance of additional Units, as appropriate
and in the Trustee’s sole and absolute discretion;

 

(26)                          the taking of any and all acts and things
necessary or prudent to ensure that the Company will not be classified as an
association taxable as a corporation for U.S.  federal income tax purposes or a
“publicly traded partnership” for purposes of Section 7704 of the Code,
including but not limited to imposing restrictions on transfers, restrictions on
the number of Unitholders and restrictions on redemptions;

 

(27)                          the filing of applications, communicating and
otherwise dealing with any and all governmental agencies having jurisdiction
over, or in any way affecting, the Company’s assets or any other aspect of the
Company business;

 

(28)                          taking of any action necessary or appropriate to
comply with all regulatory requirements applicable to the Company in respect of
its business, including preparing or causing to be prepared all financial
statements required under applicable regulations and contractual undertakings
and all reports, filings and documents, if any, required under the Exchange Act,
the Securities Act, or by any national securities exchange requirements;

 

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

 

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

 

B.                                    No Approval by Unitholders.  Each of the
Unitholders agrees that the Trustee is authorized to execute, deliver and
perform the above-mentioned agreements and transactions on behalf of the Company
without any further act, approval or vote of the Unitholders, notwithstanding
any other provision of this Agreement, the Maryland REIT Law or any applicable
law, rule or regulation, to the fullest extent permitted under the Maryland REIT
Law or other applicable law, rule or regulation.  The execution, delivery or
performance by the

 

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Trustee or the Company of any agreement authorized or permitted under this
Agreement shall be in the sole and absolute discretion of the Trustee without
consideration of any other obligation or duty, fiduciary or otherwise, of the
Company or the Unitholders and shall not constitute a breach by the Trustee of
any duty that the Trustee may owe the Company or the Unitholders or any other
Persons under this Agreement or of any duty stated or implied by law or equity. 
The Unitholders acknowledge that the Trustee is acting for the collective
benefit of the Company, the Unitholders and the shareholders of the Trustee.

 

C.                                    Insurance.  At all times from and after
the date hereof, the Trustee may cause the Company to obtain and maintain (i)
casualty, liability and other insurance on the properties of the Company and its
Subsidiaries and (ii) liability insurance for the Indemnitees hereunder, and
(iii) such other insurance as the Trustee, 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 Trustee may cause the Company to
establish and maintain working capital reserves in such amounts as the Trustee,
in its sole and absolute discretion, deems appropriate and reasonable from time
to time, including upon liquidation of the Company under Article XII.

 

Section 6.2                                   Title to Company Assets

 

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

 

Section 6.3                                   Reimbursement of the Trustee

 

A.                                    No Compensation.  Except as provided in
this Section 6.3 and elsewhere in this Agreement (including Section 9.3.C and
the provisions of Articles IV and V regarding distributions, payments and
allocations to which it may be entitled), the Trustee shall not be compensated
for its services as the Trustee of the Company.

 

B.                                    Responsibility for Trustee Expenses.  The
Company shall be responsible for and shall pay all expenses relating to the
Company’s organization, the ownership of its assets and its operations.  The
Trustee shall be reimbursed on a monthly basis, or such other basis as the
Trustee may determine in its sole and absolute discretion, for all expenses it
incurs relating to or resulting from the ownership and operation of, or for the
benefit of, the Company (including, without limitation, (i) expenses relating to
the ownership of interests in and operation of the Company, (ii) compensation of
the officers and employees including, without limitation,

 

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payments under any stock option or incentive plan that provides for stock units,
or other phantom stock, pursuant to which employees will receive payments based
upon dividends on or the value of Shares, (iii) auditing expenses, (iv) director
fees and expenses of the Trustee, (v) all costs and expenses of the Trustee
being a public company, including costs of filings with the Securities and
Exchange Commission, reports and other distributions to its shareholders, and
(vi) all costs and expenses associated with litigation involving the Trustee and
the Trustee, the Company or any Subsidiary); provided, however, that (i) the
amount of any such reimbursement shall be reduced by (x) any interest earned by
the Trustee with respect to bank accounts or other instruments or accounts held
by it on behalf of the Company as permitted in Section 6.4.A (which interest is
considered to belong to the Company and shall be paid over to the Company to the
extent not applied to reimburse the Trustee for expenses hereunder); and (y) any
amount derived by the Trustee from any investments permitted in Section 6.4.A;
(ii) if the Trustee qualifies as a REIT, the Company shall not be responsible
for any taxes that the Trustee would not have been required to pay if that
entity qualified as a REIT for federal income tax purposes or any taxes imposed
on the Trustee by reason of that entity’s failure to distribute to its
shareholders an amount equal to its taxable income; (iii) the Company shall not
be responsible for expenses or liabilities incurred by the Trustee in connection
with any business or assets of the Trustee other than its ownership of Units or
operation of the business of the Company or ownership of interests in other
Qualified Assets; and (iv) the Company shall not be responsible for any expenses
or liabilities of the Trustee that are the subject of an indemnification claim
by the Trustee if the Trustee is not entitled to indemnification because it
fails to meet the required statutory standard of conduct.  The Trustee shall
determine in good faith the amount of expenses incurred by it related to the
ownership of Units or operation of, or for the benefit of, the Company.  If
certain expenses are incurred that are related both to the ownership of Units or
operation of, or for the benefit of, the Company and to the ownership of other
assets (other than Qualified Assets) or the operation of other businesses, such
expenses will be allocated to the Company and such other entities (including the
Trustee) owning such other assets or businesses in such a manner as the Trustee
in its sole and absolute discretion deems fair and reasonable.  Such
reimbursements shall be in addition to any reimbursement to the Trustee pursuant
to Section 9.3.C and as a result of indemnification pursuant to the
Declaration.  All payments and reimbursements hereunder shall be characterized
for U.S.  federal income tax purposes as expenses of the Company incurred on its
behalf, and not as expenses of the Trustee.

 

C.                                    Unit Issuance Expenses.  The Trustee shall
also be reimbursed for all expenses it incurs relating to any issuance of Units,
Shares, Debt of the Company, Funding Debt of the Trustee or rights, options,
warrants or convertible or exchangeable securities pursuant to Article III
(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 Unitholders to
constitute expenses of, and for the benefit of, the Company.

 

D.                                    Repurchases of Shares.  If the Trustee
exercises its rights under its organizational documents to purchase Shares or
otherwise elects or is required to purchase from its shareholders 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 Trustee, any employee
equity purchase plan adopted by the Trustee or any similar obligation or
arrangement undertaken by the Trustee in the future, the

 

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purchase price paid by the Trustee for those Shares and any other expenses
incurred by the Trustee in connection with such purchase shall be considered
expenses of the Company and shall be reimbursable to the Trustee, subject to the
conditions that: (i) if those Shares subsequently are to be sold by the Trustee
shall pay to the Company any proceeds received by the Trustee for those Shares
(provided, however, that a transfer of Shares for Units pursuant to Section 7.6
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 Trustee within thirty (30) days after the purchase thereof, the Trustee
shall cause the Company to cancel a number of Units (rounded to the nearest
whole Unit) held by the Trustee 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 6.3 is determined for U.S.  federal income tax
purposes not to constitute a payment of expenses of the Company, 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 Company and all Unitholders and shall not be treated as a
distribution for purposes of computing the Unitholders’ Capital Accounts.
 Amounts deemed paid by the Company to the Trustee in connection with redemption
of Units pursuant to Section 6.4.B shall be treated as a distribution for
purposes of computing the Unitholder’s Capital Accounts.

 

F.                                      Funding for Certain Capital
Transactions.  In the event that the Trustee 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
Trustee (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), (a) the Company shall advance to the Trustee the cash
required to consummate such acquisition if, and to the extent that, such cash is
not to be obtained by the Trustee through an issuance of Shares described in
Section 3.2 or pursuant to a transaction described in Section 6.4.B, (b) the
Trustee shall, upon consummation of such acquisition, transfer to the Company
(or cause to be transferred to the Company), in full and complete satisfaction
of such advance and as required by Section 6.4, the assets or equity interests
of such Person acquired by the Trustee in such acquisition (or equity interests
in Persons owning all of such assets or equity interests), and (c) pursuant to
and in accordance with Section 3.2 and Section 6.4.B, the Company shall issue to
the Trustee, Units and/or rights, options, warrants or convertible or
exchangeable securities of the Company 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 Trustee 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 Trustee engages in a
transaction in which (x) the Trustee (or a wholly owned direct or indirect
Subsidiary of the Trustee) merges with another entity (referred to as the
“Parent Entity”) that is organized in the UPREIT form (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”)) (“UPREIT”) and the Trustee survives such
merger, (y) such Operating Entity merges with or is otherwise

 

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acquired by the Company in exchange in whole or in part for Units, and (z) the
Trustee 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 Company shall distribute to the Trustee
with respect to its existing Units an amount of cash sufficient to complete such
transaction and the Trustee shall cause the Company to cancel a number of Units
(rounded to the nearest whole number) held by the Trustee equal to the product
attained by multiplying the number of additional Shares of the Trustee that the
Trustee 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 6.4                                   Outside Activities of the Trustee;
Relationship of Shares to Units; Funding Debt

 

A.                                    General.  Without the Consent of the
Non-Trustee Unitholders, the Trustee shall not, directly or indirectly, enter
into or conduct any business other than in connection with the ownership,
acquisition and disposition of Units as Trustee or Unitholder and the management
of the business of the Company and such activities as are incidental thereto. 
Without Consent of the Non-Trustee Unitholders, the assets of the Trustee shall
be limited to the following:

 

(1)                                 Units and other interests, rights, options,
warrants or convertible or exchangeable securities of the Company;

 

(2)                                 such bank accounts or similar instruments or
accounts in the Trustee’s name as the Trustee deems necessary to carry out its
responsibilities and purposes as contemplated under this Agreement and its
organizational documents (provided that accounts held on behalf of the Company
to permit the Trustee to carry out its responsibilities under this Agreement
shall be considered to belong to the Company and the interest earned thereon
shall, subject to Section 6.3.B, be applied for the benefit of the Company);

 

(3)                                 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 Company;

 

(4)                                 debt issued by the Company or any Subsidiary
thereof in connection with the incurrence of Funding Debt;

 

(5)                                 real estate assets (and related assets and
liabilities) owned by the Trustee on the date of this Agreement with an
aggregate book value not to exceed $50,000,000, as reasonably determined by the
Trustee;

 

(6)                                 cash or other assets (x) of nominal value
incidental to the Trustee’s ownership of Units or other securities in the
Company, and (y) held for payment of administrative expenses or other payments,
or pending distribution to security holders of the Trustee or any wholly owned
Subsidiary thereof, or pending contribution to the Company or any Subsidiary of
the Trustee or the Company;

 

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(7)                                 other tangible and intangible assets that,
taken as a whole, are de minimis in relation to the net assets of the Company
and its Subsidiaries; and

 

(8)                                 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 the assets described in clauses
(1) through (7) above; provided that if such entity’s assets consist of assets
described in clause (5) above, the Trustee shall have entered into an agreement
with such entity that provides the Company with the full economic benefit, and
requires the Company to assume the full economic burden, of the assets and
business activities of such entity such that the economic effect of such
agreement would be equivalent to ownership of such entity by the Company rather
than by the Trustee (the assets described in clauses (1) through (8) of this
Section 6.4.A, the “Qualified Assets”).

 

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

 

C.                                    Equity Incentive Plan.  If, at any time or
from time to time, the Trustee sells or otherwise issues Shares pursuant to any
Equity Incentive Plan, the Trustee shall transfer or cause to be transferred the
proceeds of the sale of such Shares, if any, to the Company as an additional
Capital Contribution and the Company shall issue to the Trustee an amount of
additional Units equal to the number of Shares so sold or issued divided by the
Conversion Factor.  If the Company or the Trustee acquires Shares as a result of
the forfeiture of such Shares under any Equity Incentive Plan, then the Trustee
shall cause the Company to cancel, without payment of any consideration to the
Trustee, that number of Units of the appropriate class equal to the number of
Shares so acquired, and, if the Company acquired such Shares, it shall transfer
such Shares to the Trustee for cancellation.

 

D.                                    Issuances of Shares and Other Securities. 
So long as the common shares of the Trustee are Publicly Traded, the Trustee
shall not grant, award or issue any additional Shares (other than Shares issued
pursuant to Section 7.6 hereof or pursuant to a dividend or distribution
(including any share split) of Shares to all of its shareholders that results in
an adjustment to the Conversion Factor pursuant to clause (i), (ii) or (iii) of
the definition thereof), other equity securities of the Trustee, New Securities
or Convertible Funding Debt unless (i) the Trustee shall cause, pursuant to
Section 3.2.A hereof, the Company to issue to the Trustee, Units or rights,
options, warrants or convertible or exchangeable securities of the Company
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 Trustee transfers or otherwise causes

 

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to be transferred to the Company, as an additional Capital Contribution, the
proceeds from the grant, award, or issuance of such additional Shares, other
equity securities, New Securities or Convertible Funding Debt, as the case may
be, or from the exercise of rights contained in such additional Shares, other
equity securities, New Securities or Convertible Funding Debt, as the case may
be (or, in the case of an acquisition described in Section 6.3.F in which all or
a portion of the cash required to consummate such acquisition is to be obtained
by the Trustee through an issuance of Shares described in Section 3.2, the
Trustee complies with such Section 6.3.F).  Without limiting the foregoing, the
Trustee 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 Trustee is expressly authorized, pursuant
to Section 3.2.A hereof, to cause the Company to issue to the Trustee
corresponding Units (for example, and not by way of limitation, the issuance of
Shares and corresponding Units pursuant to a share purchase plan providing for
purchases of Shares, either by employees or shareholders, at a discount from
fair market value or pursuant to employee share options that have an exercise
price that is less than the fair market value of the Shares, either at the time
of issuance or at the time of exercise), as long as (a) the Trustee concludes in
good faith that such issuance is in the interests of the Trustee and the Company
and (b) the Trustee transfers all proceeds from any such issuance or exercise to
the Company as an additional Capital Contribution.

 

E.                                     Funding Debt.  The Trustee or any wholly
owned Subsidiary of the Trustee may incur a Funding Debt, including, without
limitation, a Funding Debt that is convertible into Shares or otherwise
constitutes a class of New Securities (“Convertible Funding Debt”), subject to
the condition that the Trustee or such Subsidiary, as the case may be, lend to
the Company the net proceeds of such Funding Debt; provided, however, that
Convertible Funding Debt shall be issued in accordance with the provisions of
Section 6.4.D above; and, provided further that, if the Trustee attempts to
qualify as a REIT, the Trustee or such Subsidiary shall not be obligated to lend
the net proceeds of any Funding Debt to the Company in a manner that would be
inconsistent with the Trustee’s ability to remain qualified as a REIT.  If the
Trustee or such Subsidiary enters into any Funding Debt, the loan to the Company
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.

 

F.                                      Capital Contributions of the Trustee.
 The Capital Contributions by the Trustee pursuant to Sections 6.4.C and 6.4.D
will be deemed to equal the cash contributed by the Trustee plus, (i) in the
case of cash contributions funded by an offering of any equity interests in or
other securities of the Trustee, the offering costs attributable to the cash
contributed to the Company to the extent not reimbursed pursuant to Section
6.3.C and (ii) in the case of Units issued pursuant to Section 6.4.C, an amount
equal to the difference between the Value of the Shares sold pursuant to the
Equity Incentive Plan and the net proceeds of such sale.

 

G.                                    Tax Loans.  The Trustee may in its sole
and absolute discretion, cause the Company to make an interest free loan to the
Trustee, provided that the proceeds of such loans are used to satisfy any tax
liabilities of the Trustee.

 

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Section 6.5                                   Transactions with Affiliates

 

A.                                    Transactions with Certain Affiliates. 
Except as expressly permitted by this Agreement with respect to any non-arms’
length transaction with an Affiliate, the Company 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 Unitholder or any Affiliate of
the Company that is not also a Subsidiary of the Company, except pursuant to
transactions that are determined in good faith by the Trustee to be on terms
that are fair and reasonable.

 

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

 

C.                                    Benefit Plans Sponsored by the Company. 
The Trustee in its sole and absolute discretion and without the approval of the
Unitholders, may propose and adopt on behalf of the Company employee benefit
plans funded by the Company for the benefit of employees of the Trustee, the
Company, Subsidiaries of the Company or any Affiliate of any of them.

 

Section 6.6                                   Liability of the Trustee

 

A.                                    Tax Consequences of Trustee and
Unitholders.  The Unitholders expressly acknowledge that the Trustee, in
considering whether to dispose of any of the Company assets, shall take into
account the tax consequences to the Trustee of any such disposition and shall
have no liability whatsoever to the Company or any Unitholder for decisions that
are based upon or influenced by such tax consequences.  In addition, in
exercising its authority under this Agreement with respect to other matters, the
Trustee may, but shall be under no obligation to, take into account the tax
consequences to any Unitholder (including the Trustee) of any action taken (or
not taken) by the Trustee.  No decision or action (or failure to act)
contemplated by the preceding sentence shall constitute a breach of any duty
owed to the Company or the Unitholders by law or equity, fiduciary or
otherwise.  The Trustee and the Company shall not have liability to any
Unitholder for monetary or other damages or otherwise for losses sustained,
liabilities incurred or benefits not derived by such Unitholder in connection
with any taking or omission to take any such actions by the Trustee, except as
set forth in Section 9.3 of the Declaration.

 

B.                                    No Obligation to Consider Separate
Interests of Unitholders or Shareholders.  The Unitholders expressly acknowledge
that the Trustee is acting on behalf of the Company, its equityholders (and, to
the extent separate, the equityholders of the Trustee), and the equityholders of
the Unitholders, collectively, and that, except as otherwise set forth herein,
the Trustee is under no obligation to consider or give priority to the separate
interests of the Unitholders (including, without limitation, the tax
consequences to Unitholders or Assignees) in deciding whether to cause the
Company to take (or decline to take) any actions.  Any decisions or actions
taken or not taken in accordance with the terms of this Agreement shall not
constitute a breach of any duty owed to the Company or the Unitholders by law or
equity, fiduciary or otherwise.  The Trustee and the Company shall not have
liability to any Unitholder for monetary or other damages or otherwise for
losses sustained, liabilities incurred or benefits not derived by

 

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such Unitholder in connection with any taking or omission to take any such
actions by the Trustee, except as set forth in Section 9.3 of the Declaration.

 

C.                                    Actions of Agents.  Subject to its
obligations and duties as Trustee set forth in Section 6.1.A, the Trustee 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 Trustee shall not be liable to the Company or any Unitholder for
any misconduct or negligence on the part of any such agent appointed by the
Trustee in good faith.

 

D.                                    Effect of Amendment.  Notwithstanding any
other provision contained herein, any amendment, modification or repeal of this
Section 6.6 or any provision hereof shall be prospective only and shall not in
any way affect the limitations on the Trustee’s liability to the Company and the
Unitholders or any other Person bound by this Agreement under this Section 6.6
as in effect immediately prior to such amendment, modification or repeal with
respect to claims arising from or relating to matters occurring, in whole or in
part, prior to such amendment, modification or repeal, regardless of when such
claims may arise or be asserted.

 

E.                                     Limitations of Fiduciary Duty.  Sections
6.1.B and Section 6.6 and any other Section of this Agreement limiting the
liability of the Trustee and/or its trustees, directors and officers shall
constitute an express limitation of any duties, fiduciary or otherwise, that
they would owe the Company or the Unitholders if such duty would be imposed by
any law, in equity or otherwise.

 

F.                                      Reliance on this Agreement.  To the
extent that, at law or in equity, the Trustee in its capacity as a Unitholder,
has duties (including fiduciary duties) and liabilities relating thereto to the
Company or the Unitholders, the Trustee shall not be liable to the Company or to
any other Unitholder for its good faith reliance on the provisions of this
Agreement.  The provisions of this Agreement, to the extent that they restrict
or eliminate the duties and liabilities of the Trustee or any other Person under
Maryland REIT Law or otherwise existing at law or in equity, are agreed by the
Unitholders to replace such other duties and liabilities of the Trustee.

 

Section 6.7                                   Other Matters Concerning the
Trustee

 

A.                                    Reliance on Documents.  The Trustee 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 Trustee 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 Trustee reasonably believes to be within such Person’s
professional or expert competence shall be conclusively presumed to have been
done or omitted in good faith and in accordance with such opinion.

 

C.                                    Action Through Agents.  The Trustee 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

 

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Trustee 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 Trustee hereunder.

 

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

 

Section 6.8                                   Reliance by Third Parties

 

Notwithstanding anything to the contrary in this Agreement, any Person dealing
with the Company shall be entitled to assume that the Trustee has full power and
authority, without consent or approval of any other Unitholder or Person, to
encumber, sell or otherwise use in any manner any and all assets of the Company,
to enter into any contracts on behalf of the Company and to take any and all
actions on behalf of the Company, and such Person shall be entitled to deal with
the Trustee as if the Trustee were the Company’s sole party in interest, both
legally and beneficially.  Each Unitholder 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 Trustee in connection with any such dealing, in each
case except to the extent that such action imposes, or purports to impose,
liability on the Unitholder.  In no event shall any Person dealing with the
Trustee 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 Trustee or its representatives.  Each and every
certificate, document or other instrument executed on behalf of the Company by
the Trustee 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 Company, 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 Company.

 

Section 6.9                                   Loans by Third Parties

 

The Company 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 Trustee or any of its Affiliates) with any Person upon
such terms as the Trustee determines appropriate.

 

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ARTICLE VII
RIGHTS AND OBLIGATIONS OF UNITHOLDERS

 

Section 7.1                                   Limitation of Liability

 

The Unitholders, including the Trustee, in its capacity as a Unitholder, shall
have no liability under this Agreement except as expressly provided in this
Agreement, including Section 9.5, or under the Act.

 

Section 7.2                                   Management of Business

 

No Unitholder or Assignee (other than the Trustee, any of its Affiliates, or any
officer, director, employee, partner, agent or trustee of the Trustee, the
Company 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
Company’s business, transact any business in the Company’s name or have the
power to sign documents for or otherwise bind the Company.  The transaction of
any such business by the Trustee, any of its Affiliates or any officer,
director, employee, partner, agent or trustee of the Trustee, the Company or any
of their Affiliates, in their capacity as such, shall not affect, impair or
eliminate the limitations on the liability of the Unitholders or Assignees under
this Agreement.

 

Section 7.3                                   Outside Activities of Unitholders

 

Subject to Section 6.4 hereof, and subject to any agreements entered into
pursuant to Section 6.5.B hereof and to any other agreements entered into by a
Unitholder or its Affiliates with the Trustee, the Company or a Subsidiary, any
Unitholder (other than the Trustee) and any officer, director, manager,
employee, agent, trustee, Affiliate, Unitholder or shareholder of any Unitholder
shall be entitled to and may have business interests and engage in business
activities in addition to those relating to the Company, including business
interests and activities in direct or indirect competition with the Company. 
Neither the Company nor any Unitholders shall have any rights by virtue of this
Agreement in any business ventures of any Unitholder, officer, director,
manager, employee, agent, trustee, Affiliate, Unitholder, shareholder or
Assignee of any Unitholder.  None of the Unitholders (other than the Trustee) or
any other Person shall have any rights by virtue of this Agreement or the
limited liability relationship established hereby in any business ventures of
any other Person (other than the Trustee to the extent expressly provided
herein), and no Person (other than the Trustee) shall have any obligation
pursuant to this Agreement to offer any interest in any such business venture to
the Company, any Unitholder or any such other Person, even if such opportunity
is of a character which, if presented to the Company, any Unitholder or such
other Person, could be taken by such Person.

 

Section 7.4                                   Return of Capital

 

Except pursuant to the right of redemption set forth in Section 7.6, no
Unitholder 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 Company as provided herein.  No Unitholder
or Assignee shall have priority over any other Unitholder or Assignee either as
to the return of Capital Contributions (except as permitted by Section 3.2.A)
or, except

 

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to the extent provided by Exhibit C or as permitted by Sections 3.2.A, 4.1.B(i),
5.1.A and 5.1.B, or otherwise expressly provided in this Agreement, as to
profits, losses, distributions or credits.

 

Section 7.5                                   Rights of Unitholders Relating to
the Company

 

A.                                    General.  In addition to other rights
provided by this Agreement or by the Act, and except as limited by Section
7.5.C, each Unitholder shall have the right, for a business purpose reasonably
related to such Unitholder’s interest as a Unitholder in the Company, upon
written demand with a statement of the purpose of such demand and at such
Unitholder’s own expense (including such administrative charges as the Trustee
may establish from time to time):

 

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

 

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

 

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

 

(4)                                 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 Unitholder and which each
Unitholder has agreed to contribute in the future, and the date on which each
Unitholder became a Unitholder; and

 

(5)                                 other information regarding the affairs of
the Company as is just and reasonable.

 

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

 

C.                                    Confidentiality.  Notwithstanding any
other provision of this Section 7.5.C, the Trustee may keep confidential from
the Unitholders, for such period of time as the Trustee determines in its sole
and absolute discretion, any information that (i) the Trustee reasonably
believes to be in the nature of trade secrets or other information the
disclosure of which the Trustee in good faith believes is not in the best
interests of the Company or could damage the Company or its business or (ii) the
Company or its business is required by law or by agreements with unaffiliated
third parties to keep confidential, provided, however, that this Section 7.5.C
shall not affect the notice requirements set forth in Section 7.5.B.

 

Section 7.6                                   Redemption Right

 

A.                                    General.

 

(i)                                     Subject to Section 7.6.C and Section
10.6.E, at any time on or after six months following the date on which a Class A
Unit was issued (which, in the event of the transfer shall be deemed to be the
date that the Class A Unit was issued to the original recipient

 

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thereof for purposes of this Section 7.6), the holder of such Class A Unit (if
other than the Trustee or any Subsidiary of the Trustee) shall have the right
(the “Redemption Right”) to require the Company to redeem such 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 Company.  Any such
Redemption Right shall be exercised pursuant to a Notice of Redemption delivered
to the Company (with a copy to the Trustee) by the holder of the Units who is
exercising the Redemption Right (the “Redeeming Unitholder”).  A Unitholder may
exercise the Redemption Right from time to time, without limitation as to
frequency, with respect to part or all of the Units that it owns, as selected by
the Unitholder, provided, however, that a Unitholder may not exercise the
Redemption Right for fewer than one thousand (1,000) Units of a particular class
unless such Redeeming Unitholder then holds fewer than one thousand (1,000)
Units in that class, in which event the Redeeming Unitholder must exercise the
Redemption Right for all of the Units held by such Redeeming Unitholder in that
class, and provided further that, with respect to a Unitholder which is an
entity, such Unitholder may exercise the Redemption Right for fewer than one
thousand (1,000) Units without regard to whether or not such Unitholder is
exercising the Redemption Right for all of the Units held by such Unitholder as
long as such Unitholder 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 Unitholder.

 

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

 

(iii)                               The Assignee of any Unitholder may exercise
the rights of such Unitholder pursuant to this Section 7.6, and such Unitholder
shall be deemed to have assigned such rights to such Assignee and shall be bound
by the exercise of such rights by such Unitholder’s Assignee.  In connection
with any exercise of such rights by such Assignee on behalf of such Unitholder,
the Cash Amount shall be paid by the Company directly to such Assignee and not
to such Unitholder.

 

(iv)                              Notwithstanding the foregoing, if the Trustee
provides notice to the Unitholders pursuant to Section 7.5.B hereof, the
Redemption Right shall be exercisable, without regard to whether the Units have
been outstanding for any specified period, during the period commencing on the
date on which the Trustee provides such notice and ending on the record date to
determine shareholders eligible to receive such distribution or participate in
such Extraordinary Transaction (or if none, ending on the date of consummation
of such distribution or Extraordinary Transaction).  If this subparagraph (iv)
applies, the Specified Redemption Date is the date on which the Company and the
Trustee receive notice of exercise of the Redemption Right, rather than ten (10)
Business Days after receipt of the Notice of Redemption.

 

B.                                    Trustee Assumption of Redemption Right.

 

(i)                                     If a Unitholder has delivered a Notice
of Redemption, the Trustee may, in its sole and absolute discretion (subject to
the limitations on ownership and transfer of Shares set forth in the
organizational documents of the Trustee), elect to assume directly and satisfy a
Redemption Right.  If such election is made by the Trustee, the Company shall
determine

 

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whether the Trustee shall pay the Redemption Amount in the form of the Cash
Amount or the Shares Amount.  The Company’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 Trustee, in its capacity as the Trustee of the Company and in its
sole and absolute discretion.  Payment of the Redemption Amount in the form of
Shares shall be in Shares duly authorized, validly issued, fully paid and
nonassessable and if applicable, free and clear of any pledge, lien, encumbrance
or restriction, other than those provided in the organizational documents of the
Trustee, the Securities Act, relevant state securities or blue sky laws and any
applicable registration rights agreement with respect to such Shares entered
into by the Redeeming Unitholder, and shall bear a legend in form and substance
determined by the Trustee.  Upon such payment by the Trustee shall acquire the
Units offered for redemption by the Redeeming Unitholder and shall be treated
for all purposes of this Agreement as the owner of such Units.  Unless the
Trustee, in its sole and absolute discretion, shall exercise its right to assume
directly and satisfy the Redemption Right, the Trustee shall not have any
obligation to the Redeeming Unitholder or to the Company with respect to the
Redeeming Unitholder’s exercise of the Redemption Right.  If the Trustee shall
exercise its right to assume directly and satisfy the Redemption Right in the
manner described in the first sentence of this Section 7.6B and shall fully
perform its obligations in connection therewith, the Company shall have no right
or obligation to pay any amount to the Redeeming Unitholder with respect to such
Redeeming Unitholder’s exercise of the Redemption Right, and each of the
Redeeming Unitholder, the Company and the Trustee shall, for U.S.  federal
income tax purposes, treat the transaction between the Trustee and the Redeeming
Unitholder as a sale of the Redeeming Unitholder’s Units to the Trustee.

 

(ii)                                  If the Trustee determines that the Trustee
shall pay the Redeeming Unitholder the Redemption Amount in the form of Shares,
the total number of Shares to be paid to the Redeeming Unitholder in exchange
for the Redeeming Unitholder’s Units shall be the applicable Shares Amount.  If
this amount is not a whole number of Shares, the Redeeming Unitholder 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 Trustee determines, in its
reasonable discretion, to represent the fair value of the remaining fractional
Share which would otherwise be payable to the Redeeming Unitholder.

 

(iii)                               Each Redeeming Unitholder agrees to execute
such documents or provide such information or materials as the Trustee 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 7.6.A and 7.6.B, a Unitholder
shall not be entitled to exercise the Redemption Right pursuant to Section 7.6.A
if (but only as long as) the delivery of Shares to such Unitholder on the
Specified Redemption Date would (i) be prohibited under the restrictions on the
ownership or transfer of Shares in the organizational documents of the Trustee,
(ii) be prohibited under applicable federal or state securities laws or
regulations (in each case regardless of whether the Trustee would in fact assume
and satisfy the Redemption Right), (iii) without limiting the foregoing, result
in the Trustee’s Shares being owned by fewer than 100 persons (determined
without reference to rules of attribution), (iv) without limiting the foregoing,
result in the Trustee being “closely held” within the meaning of Section 856(h)
of the Code or cause the Trustee to own, actually or constructively, ten percent
(10%) or more of the ownership interests in a tenant

 

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of the Trustee, the Company or a subsidiary of the Company 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 Unitholder 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 Trustee may, in its sole and absolute discretion, waive such
prohibition set forth in this Section 7.6.C.

 

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

 

E.                                     Additional Units; Modification of Holding
Period.  If the Company issues Units to any Additional Unitholder pursuant to
Article III, the Trustee may make such revisions to this Section 7.6 as it
determines are necessary to reflect the issuance of such Units (including
setting forth any restrictions on the exercise of the Redemption Right with
respect to such Units which differ from those set forth in this Agreement);
provided, however, that no such revisions shall materially adversely affect the
rights of any other Unitholder to exercise its Redemption Right without that
Unitholder’s prior written consent.  In addition, the Trustee may, with respect
to any holder or holders of Units, at any time and from time to time, as it
shall determine in its sole and absolute discretion, (i) reduce or waive the
length of the period prior to which such holder or holders may not exercise the
Redemption Right or (ii) reduce or waive the length of the period between the
exercise of the Redemption Right and the Specified Redemption Date.

 

ARTICLE VIII
BOOKS, RECORDS, ACCOUNTING AND REPORTS

 

Section 8.1                                   Records and Accounting

 

The Trustee shall keep or cause to be kept at the principal office of the
Company appropriate books and records with respect to the Company’s business,
including, without limitation, all books and records necessary to provide to the
Unitholders any information, lists and copies of documents required to be
provided pursuant to Section 8.3.  Any records maintained by or on behalf of the
Company 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 Company shall be maintained, for financial and tax
reporting purposes, on an accrual basis in accordance with generally accepted
accounting principles.

 

Section 8.2                                   Fiscal Year

 

The Fiscal Year shall be the calendar year.

 

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Section 8.3                                   Reports

 

A.                                    Annual Reports.  If and to the extent that
the Trustee mails its annual report to its shareholders, as soon as practicable,
but in no event later than the date on which such reports are mailed, the
Trustee shall cause to be mailed to each Unitholder an annual report, as of the
close of the most recently ended Fiscal Year, containing financial statements of
the Company, or of the Trustee (and, if different, the Trustee) if such
statements are prepared on a consolidated basis with the Company, for such
Fiscal Year, presented in accordance with generally accepted accounting
principles, such statements to be audited by a nationally recognized “Big Four”
firm of independent public accountants selected by the Trustee.

 

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

 

C.                                    The Trustee shall have satisfied its
obligations under Sections 8.3.A and 8.3.B by (i) to the extent the Trustee or
the Company is subject to periodic reporting requirements under the Exchange
Act, filing the quarterly and annual reports required thereunder within the time
periods provided for the filing of such reports, including any permitted
extensions, or (ii) posting or making available the reports required by this
Section 8.3 on the website maintained from time to time by the Company or the
Trustee.

 

ARTICLE IX
TAX MATTERS

 

Section 9.1                                   Preparation of Tax Returns

 

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

 

Section 9.2                                   Tax Elections

 

A.                                    Except as otherwise provided herein, the
Trustee 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 Trustee shall have the right to seek to revoke
any such election upon the Trustee’s determination in its sole and absolute
discretion that such revocation is in the best interests of the Unitholders.

 

B.                                    To the extent provided for in Treasury
Regulations, revenue rulings, revenue procedures and/or other IRS guidance
issued after the date hereof, the Company is hereby authorized to, and at the
direction of the Trustee shall, elect a safe harbor under which the fair

 

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market value of any Units issued in connection with the performance of services
after the effective date of such Treasury Regulations (or other guidance) will
be treated as equal to the liquidation value of such Units (i.e., a value equal
to the total amount that would be distributed with respect to such interests if
the Company sold all of its assets for their fair market value immediately after
the issuance of such Units, satisfied its liabilities (excluding any
non-recourse liabilities to the extent the balance of such liabilities exceeds
the fair market value of the assets that secure them) and distributed the net
proceeds to the Unitholders under the terms of this Agreement).  In the event
that the Company makes a safe harbor election as described in the preceding
sentence, each Unitholder hereby agrees to comply with all safe harbor
requirements with respect to transfers of such Units while the safe harbor
election remains effective.

 

Section 9.3                                   Tax Unitholder and Company Tax
Audit Matters

 

A.                                    General.  The Trustee shall be the “Tax
Unitholder” of the Company for federal, state and local income tax
administrative or judicial proceedings (such administrative proceedings being
referred to as a “tax audit” and such judicial proceedings being referred to as
a “judicial review”) and is treated as the “tax matters partner” pursuant to
Section 6231(a)(7) of the Code as in effect on November 1, 2015 (Subchapter C of
Chapter 63 of the Code as in effect on November 1, 2015 referred to as the
“Current Partnership Audit Rules”) and the “partnership representative” pursuant
to Section 6223(a) of the Code as included in the Bipartisan Budget Act of 2015
(with the changes to Subchapter C of Chapter 63 of the Code as made by the
Bipartisan Budget Act of 2015 referred to as the “2015 Budget Act Partnership
Audit Rules”).  The Trustee is authorized to conduct all tax audits and judicial
reviews for the Company.  So long as Section 6223(c)(3) of the Current
Partnership Audit Rules is in effect, upon receipt of notice from the IRS of the
beginning of an administrative proceeding with respect to the Company, the Tax
Unitholder shall furnish the IRS with the name, address, taxpayer identification
number and profit interest of each of the Unitholders and any Assignees;
provided, however, that such information is provided to the Company by the
Unitholders.

 

B.                                    Powers.  The Tax Unitholder is authorized,
but not required (and the Unitholders hereby consent to the Tax Unitholder
taking the following actions):

 

(1)                                 to elect out of the 2015 Budget Act
Partnership Audit Rules, if available;

 

(2)                                 to enter into any settlement with the IRS
with respect to any tax audit or judicial review for the adjustment of Company
items required to be taken into account by a Unitholder or the Company for
income tax purposes, and in the settlement agreement the Tax Unitholder may
expressly state that such agreement shall bind the Company and all Unitholders,
except that so long as the Current Partnership Audit Rules are in effect, such
settlement agreement shall not bind any Unitholder (i) who (within the time
prescribed pursuant to the Code and Regulations under the Current Partnership
Audit Rules) files a statement with the IRS providing that the Tax Unitholder
shall not have the authority to enter into a settlement agreement on behalf of
such Unitholder or (ii) who is a “notice partner” (as defined in Section
6231(a)(8) of the Current Partnership Audit Rules) or a Unitholder of a “notice
group” (as defined in Section 6223(b)(2) of the Current Partnership Audit
Rules);

 

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(3)                                 to seek judicial review of any adjustment
assessed by the IRS or any other tax authority, 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 Company’s principal place of business is
located;

 

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

 

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

 

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

 

(7)                                 to take any other action on behalf of the
Unitholders of the Company in connection with any tax audit or judicial review
proceeding, to the extent permitted by applicable law or regulations including,
without limitation, the following actions to the extent that the 2015 Budget Act
Partnership Audit Rules apply to the Company and its current and former
Unitholders:

 

(a)              electing to have the alternative method for the underpayment of
taxes set forth in Section 6226 of the Code as included in the 2015 Budget Act
Partnership Audit Rules apply to the Company and its current and former
Unitholders; and

 

(b)              for Company level assessments under Section 6225 of the Code,
as included in the 2015 Budget Act Partnership Audit Rules, determining
apportionment of responsibility for payment among the current or former
Unitholders, setting aside reserves from Available Cash of the Company,
withholding of distributions of Available Cash to the Unitholders, and requiring
current or former Unitholders to make cash payments to the Company for their
share of the Company level assessments; and

 

(8)                                 to take any other action required or
permitted by the Code and Regulations in connection with its role as Tax
Unitholder.

 

The taking of any action and the incurring of any expense by the Tax Unitholder
in connection with any such audit or proceeding referred to in clause (7) above,
except to the extent required by law, is a matter in the sole and absolute
discretion of the Tax Unitholder and the provisions relating to indemnification
of the Trustee set forth in Section 7.8 shall be fully applicable to the Tax
Unitholder in its capacity as such. In addition, the Trustee shall be entitled

 

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to indemnification set forth in Section 7.8 for any liability for tax imposed on
the Company under the 2015 Budget Act Partnership Audit Rules that is collected
from the Trustee.

 

C.                                    Agreement to Provide Information.  The
current and former Unitholders agree to provide the following information and
documentation to the Company and the Tax Unitholder to the extent that the 2015
Budget Act Partnership Audit Rules apply to the Company and its current or
former Unitholders:

 

(1)                                 information and documentation to determine
and prove eligibility of the Company to elect out of the 2015 Budget Act
Partnership Audit Rules;

 

(2)                                 information and documentation to reduce the
Company level assessment consistent with Section 6225(c) of the Code, as
included in the 2015 Budget Act Partnership Audit Rules; and

 

(3)                                 information and documentation to prove
payment of the attributable liability under Section 6226 of the Code, as
included in the 2015 Budget Act Partnership Audit Rules.

 

D.                                    Authorization for Amendment.  In addition
to the foregoing, and notwithstanding any other provision of this Agreement,
including, without limitation, Section 13.1 of this Agreement, the Trustee is
authorized (without any requirement of the consent or approval of any other
Unitholders) to make all such amendments to this Section 9.3 as it shall
determine, in its sole judgment, to be necessary, desirable or appropriate to
implement the 2015 Budget Act Partnership Audit Rules and any regulations,
procedures, rulings, notices, or other administrative interpretations thereof
promulgated by the U.S.  Treasury Department.

 

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

 

F.                                      Survival.  The obligations of each
Unitholder under this Section 9.3 shall survive such Unitholder’s withdrawal
from the Company, and each Unitholder agrees to execute such documentation
requested by the Company at the time of such Unitholder’s withdrawal from the
Company to acknowledge and confirm such Unitholder’s continuing obligations
under this Section 9.3.

 

Section 9.4                                   Organizational Expenses

 

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

 

Section 9.5                                   Withholding

 

Each Unitholder hereby authorizes the Company to withhold from or pay on behalf
of or with respect to such Unitholder any amount of U.S.  federal, state, local,
or foreign taxes that the

 

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Trustee determines that the Company is required to withhold or pay with respect
to any cash or property distributable, allocable or otherwise transferred to
such Unitholder pursuant to this Agreement, including, without limitation, any
taxes required to be withheld or paid by the Company pursuant to Section 1441,
1442, 1445, or 1446 of the Code.  Any amount withheld with respect to a
Unitholder pursuant to this Section 9.5 shall be treated as paid or distributed,
as applicable, to such Unitholder for all purposes under this Agreement to the
extent that the Company is contemporaneously making distributions against which
such amount can be offset.  Any amount paid on behalf of or with respect to a
Unitholder, in excess of any such amount of contemporaneous distributions
against which such amount paid can be offset, shall constitute a loan by the
Company to such Unitholder, which loan shall be repaid by such Unitholder within
fifteen (15) days after notice from the Trustee that such payment must be made
unless (i) the Company withholds such payment from a distribution which would
otherwise be made to the Unitholder or (ii) the Trustee determines, in its sole
and absolute discretion, that such payment may be satisfied out of the available
funds of the Company which would, but for such payment, be distributed to the
Unitholder.  Any amounts withheld pursuant to the foregoing clauses (i) or (ii)
shall be treated as having been distributed or otherwise paid to such
Unitholder.  Each Unitholder hereby unconditionally and irrevocably grants to
the Company a security interest in such Unitholder’s Units to secure such
Unitholder’s obligation to pay to the Company any amounts required to be paid
pursuant to this Section 9.5.  Any amounts payable by a Unitholder 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 applicable law) from the date such amount is due
(i.e., fifteen (15) days after demand) until such amount is paid in full.  Each
Unitholder shall take such actions as the Company or the Trustee shall request
to perfect or enforce the security interest created hereunder.

 

ARTICLE X
TRANSFERS AND WITHDRAWALS

 

Section 10.1                            Transfer

 

A.                                    Definition.  The term “transfer,” when
used in this Article X with respect to a Units or a Unit, shall be deemed to
refer to a transaction by which the Trustee purports to assign all or any part
of its Trustee Interest to another Person or by which a Unitholder purports to
assign all or any part of its Unitholder Interest to another Person, and
includes a transfer, sale, merger, consolidation, combination, assignment,
bequest, conveyance, devise, gift, pledge, encumbrance, hypothecation, mortgage,
exchange or any other disposition, whether voluntary or involuntary, by
operation of law or otherwise.  The term “transfer” when used in this Article X
does not include any redemption or repurchase of Units by the Company from a
Unitholder or acquisition of Units from a Unitholder by the Trustee pursuant to
Section 7.6 or otherwise.  When used in this Article X, the verb “transfer”
shall have correlative meaning.  No Units shall be subject to the claims of any
creditor, any spouse (for alimony, support or otherwise), or to legal process,
and may not be voluntarily or involuntarily alienated or encumbered except as
may be specifically provided for in this Agreement or consented to in writing by
the Trustee, in its sole and absolute discretion.

 

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

 

Section 10.2                            Transfers and Withdrawals by Trustee

 

A.                                    General.  The Trustee shall not transfer
any of its Units or withdraw from the Company except (i) in connection with a
transaction permitted under Section 10.2.B, (ii) in connection with any merger
(including a triangular merger), consolidation or other combination with or into
another Person following the consummation of which the equity holders of the
surviving entity are substantially identical to the shareholders of the Trustee,
(iii) with the Consent of the Non-Trustees; (iv) to any Person that is, at the
time of such transfer, an Affiliate of the Trustee that is controlled by the
Trustee, including any Qualified REIT Subsidiary.

 

B.                                    Extraordinary Transactions. 
Notwithstanding the restrictions set forth in Section 10.2.A or any other
provision of this Agreement, the Trustee shall not engage in any merger
(including, without limitation, a triangular merger), consolidation or other
combination with or into another Person, sale of all or substantially all of its
assets or any reclassification, recapitalization or other change in 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) (each, a “Extraordinary Transaction”), unless, in connection
with such Extraordinary Transaction all Unitholders either will receive, or will
have the right to receive, for each Unit cash, securities or other property in
the same form as, and equal in amount to the product of the Conversion Factor
and the greatest amount of, the 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
Extraordinary Transaction is consummated; provided, however, that if in
connection with the Extraordinary Transaction, a purchase, tender or exchange
offer (a “Tender 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 Trustee, each holder of Units shall receive, or shall have the
right to receive, 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 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 Trustee.  The Trustee
shall not enter into an agreement or other arrangement providing for or
facilitating the creation of a Trustee of the Company other than the Trustee,
unless the successor Trustee (i) is a direct or indirect controlled Affiliate of
the Trustee, and (ii) executes and delivers a counterpart to this Agreement in
which such successor Trustee agrees to be fully bound by all of the terms and
conditions contained herein that are applicable to the Trustee.

 

Section 10.3                            Transfers by Unitholders

 

A.                                    General.  Except to the extent expressly
permitted in Sections 10.3.B and 10.3.C or in connection with the exercise of a
Redemption Right pursuant to Section 7.6, a Unitholder (other than the Trustee
and the Trustee, in their capacities as Unitholders) may not transfer any

 

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portion of its Units, or any of such Unitholder’s rights as a Unitholder,
without the prior written consent of the Trustee, which consent may be withheld
in the Trustee’s sole and absolute discretion.  Any transfer otherwise permitted
under Sections 10.3.B and 10.3.C shall be subject to the conditions set forth in
Sections 10.3.D and 10.3.E, and all permitted transfers shall be subject to
Sections 10.4, 10.5 and 10.6.

 

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

 

C.                                    Permitted Transfers.  Subject to Sections
10.3.D, 10.3.E, 10.4, 10.5 and 10.6, a Unitholder may transfer, with or without
the consent of the Trustee, all or a portion of its Units (i) in the case of a
Unitholder who is an individual, to a Unitholder of his Immediate Family, any
trust formed for the benefit of himself and/or Unitholders of his Immediate
Family, or any partnership, limited liability company, joint venture,
corporation or other business entity comprised only of himself and/or
Unitholders of his Immediate Family and entities the ownership interests in
which are owned by or for the benefit of himself and/or Unitholders of his
Immediate Family, (ii) in the case of a Unitholder which is a trust, to the
beneficiaries of such trust, (iii) in the case of a Unitholder 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 shareholders, as the case may be, who are Unitholders of
the Immediate Family of or are actually the Person(s) who transferred Units to
it pursuant to clause (i) above, (iv) in the case of a Unitholder which acquired
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, shareholders or Affiliates thereof, as the case may be, or the Persons
owning the beneficial interests in any of its partners, owners or shareholders
or Affiliates thereof (it being understood that this clause (iv) will apply to
all of each Person’s Units whether the Units relating thereto were acquired on
the date hereof or hereafter), (v) in the case of a Unitholder 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 Unitholder and
the Company pursuant to which such Units was issued, (vi) pursuant to a gift or
other transfer without consideration, (vii) pursuant to applicable laws of
descent or distribution, (viii) to another Unitholder, and (ix) pursuant to a
grant of security interest or other encumbrance thereof effectuated in a bona
fide pledge transaction with a bona fide financial institution as a result of
the exercise of remedies related thereto, subject to the provisions of Section
10.3.E hereof.  A trust or other entity will be considered formed “for the
benefit” of a Unitholder’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 Trustee may prohibit any transfer of Units by a Unitholder unless it
receives a written opinion of legal counsel (which opinion and counsel shall be
reasonably satisfactory to the Company) to such Unitholder or, at the option of
the Company, an opinion of legal counsel to the Company, to the effect that such
transfer would

 

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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 Company or the Unit; provided that the Trustee may waive the
receipt of any such opinion as a condition to permitting any such transfer.

 

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

 

Section 10.4                            Substituted Unitholders

 

A.                                    Consent of Trustee.  No Unitholders shall
have the right to substitute a transferee as a Unitholder in its place
(including any transferees permitted by Section 10.3).  The Trustee shall,
however, have the right to consent to the admission of a transferee of the
interest of a Unitholder pursuant to this Section 10.4 as a Substituted
Unitholder, which consent may be given or withheld by the Trustee in its sole
and absolute discretion.  The Trustee’s failure or refusal to permit a
transferee of any such interests to become a Substituted Unitholder shall not
give rise to any cause of action against the Company, the Trustee or any
Unitholder.  The Trustee hereby grants its consent to the admission as a
Substituted Unitholder to any bona fide financial institution that loans money
or otherwise extends credit to a holder of Units and thereafter becomes the
owner of such Units pursuant to the exercise by such financial institution of
its rights under a pledge of such Units granted in connection with such loan or
extension of credit.

 

B.                                    Rights of Substituted Unitholder.  A
transferee who has been admitted as a Substituted Unitholder in accordance with
this Article X shall have all the rights and powers and be subject to all the
restrictions and liabilities of a Unitholder under this Agreement.  The
admission of any transferee as a Substituted Unitholder shall be conditioned
upon the transferee executing and delivering to the Company an acceptance of all
the terms and conditions of this Agreement (including, without limitation, the
provisions of Section 14.11) and such other documents or instruments as may be
required or advisable, in the sole and absolute discretion of the Trustee, to
effect the admission, each in form and substance reasonably satisfactory to the
Trustee.

 

C.                                    Unitholder Registry.  Upon the admission
of a Substituted Unitholder, the Trustee shall update the Unitholder Registry in
the books and records of the Company as it deems necessary to reflect such
admission in the Unitholder Registry.

 

Section 10.5                            Assignees

 

If the Trustee, in its sole and absolute discretion, does not consent to the
admission of any permitted transferee under Section 10.3 as a Substituted
Unitholder, as described in Section 10.4, such transferee shall be considered an
Assignee for purposes of this Agreement.  An Assignee

 

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shall be entitled to all the rights of an assignee of an interest in a real
estate investment trust under the Act, including the right to receive
distributions from the Company and the share of Net Income, Net Loss, gain, loss
and Recapture Income attributable to the Units assigned to such transferee, and
shall have the rights granted to the Unitholders under Section 7.6, but shall
not be deemed to be a holder of Units for any other purpose under this
Agreement, and shall not be entitled to vote such Units in any matter presented
to the Unitholders for a vote (such Units being deemed to have been voted on
such matter in the same proportion as all other Units held by Unitholders are
voted).  If any such transferee desires to make a further assignment of any such
Units, such transferee shall be subject to all the provisions of this Article X
to the same extent and in the same manner as any Unitholder desiring to make an
assignment of Units.

 

Section 10.6                            General Provisions

 

A.                                    Withdrawal of Unitholder.  No Unitholder
may withdraw from the Company other than as a result of a permitted transfer of
all of such Unitholder’s Units in accordance with this Article X and the
transferee of such Units being admitted to the Company as a Substituted
Unitholder, or pursuant to redemption of all of its Units under Section 7.6.

 

B.                                    Termination of Status as Unitholder.  Any
Unitholder who shall transfer all of its Units in a transfer permitted pursuant
to this Article X where such transferee was admitted as a Substituted Unitholder
or pursuant to redemption of all of its Units under Section 7.6 shall cease to
be a Unitholder.

 

C.                                    Timing of Transfers.  Transfers pursuant
to this Article X may only be made upon ten (10) Business Days prior notice to
the Trustee, unless the Trustee otherwise agrees.

 

D.                                    Allocations.  If any Units is transferred
during any the Fiscal Year in compliance with the provisions of this Article X
or redeemed or transferred pursuant to Section 7.6, Net Income, Net Loss, each
item thereof and all other items attributable to such interest for such Fiscal
Year shall be divided and allocated between the transferor Unitholder and the
transferee Unitholder 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 Trustee,
in its sole and absolute discretion, elects to adopt a daily, weekly, or a
monthly proration period, in which event Net Income, Net Loss, 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 Trustee).  Solely for
purposes of making such allocations, at the discretion of the Trustee, each of
such items for the calendar month in which the transfer or redemption occurs
shall be allocated to the Person who is a Unitholder as of midnight on the last
day of said month.  All distributions of Available Cash attributable to any Unit
with respect to which the Company Record Date is before the date of such
transfer, assignment or redemption shall be made to the transferor Unitholder or
the Redeeming Unitholder, 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 Unit shall be made to the transferee Unitholder.

 

E.                                     Additional Restrictions.  Notwithstanding
anything to the contrary herein, and in addition to any other restrictions on
transfer contained herein or in any Equity Incentive Plan, including, without
limitation, the provisions of Article VI and this Article X, in no event may

 

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any transfer or assignment of a Units by any Unitholder (including pursuant to
Section 7.6) be made without the express consent of the Trustee, in its sole and
absolute discretion, (i) to any person or entity who lacks the legal right,
power or capacity to own a Units; (ii) in violation of applicable law; (iii) of
any component portion of a Units, such as the Capital Account, or rights to
distributions, separate and apart from all other components of a Units; (iv) if
in the opinion of legal counsel to the Company there is a significant risk that
such transfer would cause a termination of the Company for U.S.  federal or
state income tax purposes (except as a result of the redemption or exchange for
Shares of all Units held by all Unitholders other than the Trustee, or any
Subsidiary of either, or pursuant to a transaction expressly permitted under
Section 10.2); (v) if in the opinion of counsel to the Company, there is a
significant risk that such transfer would cause the Company to cease to be
classified as a partnership for U.S.  federal income tax purposes (except as a
result of the redemption or exchange for Shares of all units held by all
Unitholders other than the Trustee, or any Subsidiary of either, or pursuant to
a transaction expressly permitted under Section 10.2); (vi) if such transfer
requires the registration of such Units pursuant to any applicable federal or
state securities laws; (vii) if such transfer is effectuated through an
“established securities market” or a “secondary market (or the substantial
equivalent thereof)” within the meaning of Section 7704 of the Code or such
transfer causes the Company to become a “publicly traded partnership,” as such
term is defined in Section 469(k)(2) or Section 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 7.6
unless, and only to the extent that, outside tax counsel provides to the Trustee
an opinion to the effect that, in the absence of such limitation or restriction,
there is a significant risk that the Company will be treated as a “publicly
traded partnership” and, by reason thereof, taxable as a corporation); (viii) if
such transfer subjects the Company or the activities of the Company to
regulation under the Investment Company Act of 1940, the Investment Advisors Act
of 1940 or ERISA, each as amended; (ix) if the Trustee attempts to qualify as a
REIT and, in the opinion of legal counsel for the Company, there is a risk that
such transfer would adversely affect the ability of the Trustee to continue to
qualify as a REIT or subject the Trustee to any additional taxes under Section
857 and Section 4981 of the Code.

 

F.                                      Avoidance of “Publicly Traded
Partnership” Status.  The Trustee shall monitor the transfers of interests in
the Company 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 Company 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
Trustee shall take all steps reasonably necessary or appropriate to prevent any
trading of interests or any recognition by the Company of transfers made on such
markets and, except as otherwise provided herein, to ensure that at least one of
the Safe Harbors is met; provided, however, that the foregoing shall not
authorize the Trustee to limit or restrict in any manner the right of any holder
of a Unit to exercise the Redemption Right in accordance with the terms of
Section 7.6 unless, and only to the extent that, outside tax counsel provides to
the Trustee an opinion to the effect that, in the absence of such limitation or
restriction, there is a significant risk that the Company will be treated as a
“publicly traded partnership” and, by reason thereof, taxable as a corporation.

 

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ARTICLE XI
ADMISSION OF UNITHOLDERS

 

Section 11.1                            Admission of a Successor Trustee

 

A successor to all of the Trustee’s Trustee Interest pursuant to Section 10.2
who is proposed to be admitted as a successor Trustee shall be admitted to the
Company as the Trustee, effective upon such transfer.  Any such successor shall
carry on the business of the Company without dissolution.  In such case, the
admission shall be subject to such successor Trustee executing and delivering to
the Company an acceptance of all of the terms and conditions of this Agreement
and such other documents or instruments as may be required to effect the
admission.

 

Section 11.2                            Admission of Additional Unitholders

 

A.                                    General.  No Person shall be admitted as
an Additional Unitholder without the consent of the Trustee, which consent shall
be given or withheld in the Trustee’s sole and absolute discretion.  A Person
who makes a Capital Contribution to the Company in accordance with this
Agreement shall be admitted to the Company as an Additional Unitholder only with
the consent of the Trustee and only upon furnishing to the Trustee (i) evidence
of acceptance in form satisfactory to the Trustee of all of the terms and
conditions of this Agreement, including, without limitation, the power of
attorney granted in Section 14.11 and (ii) such other documents or instruments
as may be required in the discretion of the Trustee to effect such Person’s
admission as an Additional Unitholder.  The admission of any Person as an
Additional Unitholder shall become effective on the date upon which the name of
such Person is recorded on the books and records of the Company, following the
consent of the Trustee to such admission.

 

B.                                    Allocations to Additional Unitholders.  If
any Additional Unitholder is admitted to the Company on any day other than the
first day of a Fiscal Year, then Net Income, Net Loss, each item thereof and all
other items allocable among Unitholders and Assignees for such Fiscal Year shall
be allocated among such Additional Unitholder and all other Unitholders and
Assignees 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 Trustee, in its sole
and absolute discretion, elects to adopt a daily, weekly or monthly proration
method, in which event Net Income, Net Loss, and each item thereof would be
prorated based upon the applicable period selected by the Trustee).  Solely for
purposes of making such allocations, at the discretion of the Trustee, each of
such items for the calendar month in which an admission of any Additional
Unitholder occurs shall be allocated among all the Unitholders and Assignees
including such Additional Unitholder.  All distributions of Available Cash with
respect to which the Company Record Date is before the date of such admission
shall be made solely to Unitholders and Assignees other than the Additional
Unitholder, and all distributions of Available Cash thereafter shall be made to
all the Unitholders and Assignees including such Additional Unitholder.

 

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Section 11.3                            Amendment of Agreement and Declaration

 

For the admission to the Company of any Unitholder, the Trustee shall take all
steps necessary and appropriate to amend the records of the Company and, if
necessary, to prepare as soon as practical an amendment of this Agreement
(including an amendment to the Unitholder Registry) and, if required by law,
shall prepare and file an amendment to the Declaration and may for this purpose
exercise the power of attorney granted pursuant to Section 14.11 hereof.

 

ARTICLE XII
DISSOLUTION AND LIQUIDATION

 

Section 12.1                            Dissolution

 

The Company shall not be dissolved by the admission of Substituted Unitholders
or Additional Unitholders or by the admission of a successor Trustee in
accordance with the terms of this Agreement.  Upon the withdrawal of the
Trustee, any successor Trustee shall continue the business of the Company.  The
Company 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 Trustee
(other than an event of bankruptcy), unless within ninety (90) days after the
withdrawal, the Consent of the Non-Trustee Unitholders to continue the business
of the Company and to the appointment, effective as of the date of withdrawal,
of a substitute Trustee is obtained;

 

(ii)                                  an election to dissolve the Company made
by the Trustee in its sole and absolute discretion;

 

(iii)                               entry of a decree of judicial dissolution of
the Company 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 Company for cash or for
marketable securities; or

 

(v)                                 a final and non-appealable judgment is
entered by a court of competent jurisdiction ruling that the Trustee is bankrupt
or insolvent, or a final and non-appealable order for relief is entered by a
court with appropriate jurisdiction against the Trustee, 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
Consent of the Non-Trustee Unitholders holding more than 50% of the Percentage
Interests represented by the Class A Units is obtained to continue the business
of the Company and to the appointment, effective as of a date prior to the date
of such order or judgment, of a substitute Trustee.

 

Section 12.2                            Winding Up

 

A.                                    General.  Upon the occurrence of a
Liquidating Event, the Company 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 Unitholders.  No Unitholder shall take any action
that is inconsistent with, or not necessary to or appropriate for, the winding
up of the

 

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Company’s business and affairs.  The Trustee (or, if there is no remaining
Trustee, any Person elected by a majority in interest of the Unitholders (the
“Liquidator”)) shall be responsible for overseeing the winding up and
dissolution of the Company and shall take full account of the Company’s
liabilities and property and the Company 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 Trustee, include
equity or other securities of the Trustee or any other entity) shall be applied
and distributed in the following order:

 

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

 

(2)                                 Second, to the payment and discharge of all
of the Company’s debts and liabilities to the Trustee;

 

(3)                                 Third, to the payment and discharge of all
of the Company’s debts and liabilities to the Unitholders;

 

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

 

(5)                                 Fifth, the balance, if any, to the
Unitholders, including, without limitation, the holders of the Vested LTIP
Units, in proportion to their respective positive Capital Account balances,
determined after giving effect to all contributions, distributions, and
allocations for all periods.

 

The Trustee shall not receive any additional compensation for any services
performed pursuant to this Article XII, other than reimbursement of its expenses
as provided in Section 6.3.

 

B.                                    Deferred Liquidation.  Notwithstanding the
provisions of Section 12.2.A which require liquidation of the assets of the
Company, but subject to the order of priorities set forth therein, if prior to
or upon dissolution of the Company the Liquidator determines that an immediate
sale of part or all of the Company’s assets would be impractical or would cause
undue loss to the Unitholders, 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 Company (including to those
Unitholders as creditors) or distribute to the Unitholders, in lieu of cash, in
accordance with the provisions of Section 12.2.A, undivided interests in such
Company 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
Unitholders, 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 12.3                            Compliance with Timing Requirements of
Regulations; Restoration of Deficit Capital Accounts

 

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

 

B.                                    Restoration of Deficit Capital Accounts
Upon Liquidation of the Company.  If any Unitholder 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 Unitholder shall have no obligation to make any
contribution to the capital of the Company with respect to such deficit, and
such deficit shall not be considered a debt owed to the Company or to any other
Person for any purpose whatsoever, except as otherwise set forth in this Section
12.3.B, or as otherwise expressly agreed in writing by the affected Unitholder
and the Company after the date hereof.  Notwithstanding the foregoing, (i) if a
DRO Unitholder has a deficit balance in its Capital Account (after giving effect
to all contributions, distributions, and allocations for all Fiscal Years or
portions thereof, including the year during which such liquidation occurs), such
DRO Unitholder shall be obligated to make a contribution to the Company with
respect to any such deficit balance in such DRO Unitholder’s Capital Account
upon a liquidation of the Company in an amount equal to the lesser of such
deficit balance or such DRO Unitholder’s DRO Amount; and (ii) the first sentence
of this Section 12.3.B shall not apply with respect to any other Unitholder to
the extent, but only to such extent, that such Unitholder previously has agreed
in writing, with the consent of the Trustee, 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 Company.  No Unitholder shall have any right to become
a DRO Unitholder, 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 Trustee, in its sole and absolute discretion.  Any
contribution required of a Unitholder under this Section 12.3.B shall be made on
or before the later of (i) the end of the Fiscal 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 Company made by a DRO
Unitholder with respect to a deficit in such DRO Unitholder’s Capital Account
balance shall be treated as a Capital Contribution by such DRO Unitholder and
the proceeds thereof shall be treated as assets of the Company to be applied as
set forth in Section 12.2.A.

 

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C.                                    Restoration of Deficit Capital Accounts
Upon a Liquidation of a Unitholder’s Interest by Transfer.  If a DRO
Unitholder’s interest in the Company is “liquidated” within the meaning of
Regulations Section 1.704-1(b)(2)(ii)(g) (other than in connection with a
liquidation of the Company) which term shall include a redemption by the Company
of such DRO Unitholder’s interest upon exercise of the Redemption Right, and
such DRO Unitholder is designated on Exhibit E as Part II DRO Unitholder, such
DRO Unitholder shall be required to contribute cash to the Company 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 Unitholder’s DRO Amount.  For this purpose,
(i) the DRO Unitholder’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 Unitholder’s Capital
Account balance, the Trustee shall re-determine the Carrying Value of the
Company’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
Unitholder’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 12.3.B.

 

D.                                    Effect of the Death of a DRO Unitholder. 
After the death of a DRO Unitholder who is an individual, the executor of the
estate of such DRO Unitholder may elect to reduce (or eliminate) the DRO Amount
of such DRO Unitholder.  Such elections may be made by such executor by
delivering to the Trustee within two hundred and seventy (270) days of the death
of such Unitholder, a written notice setting forth the maximum deficit balance
in its Capital Account that such executor agrees to restore under this Section
12.3, if any.  If such executor does not make a timely election pursuant to this
Section 12.3 (whether or not the balance in the applicable Capital Account is
negative at such time), then the DRO Unitholder’s estate (and the beneficiaries
thereof who receive distributions of Units therefrom) shall be deemed a DRO
Unitholder with a DRO Amount in the same amount as the deceased DRO Unitholder. 
Any DRO Unitholder 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 Trustee within
the time period specified above, and in the absence of any such notice the DRO
Amount of such DRO Unitholder shall not be reduced to reflect the death of any
of its partners.

 

Section 12.4                            Rights of Unitholders

 

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

 

Section 12.5                            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 Unitholders pursuant to Section 12.1,
result in a dissolution

 

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of the Company, the Trustee shall, within thirty (30) days thereafter, provide
written notice thereof to each of the Unitholders and to all other parties with
whom the Company regularly conducts business (as determined in the discretion of
the Trustee).

 

Section 12.6                            Cancellation of Declaration

 

Upon the completion of the liquidation of the Company cash and property as
provided in Section 12.2, the Company shall be terminated and the Declaration
and all qualifications of the Company as a foreign entity in jurisdictions other
than the State of Maryland shall be canceled and such other actions as may be
necessary to terminate the Company shall be taken.

 

Section 12.7                            Reasonable Time for Winding Up

 

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

 

Section 12.8                            Waiver of Partition

 

Each Unitholder hereby waives any right to partition of the Company property.

 

Section 12.9                            Liability of Liquidator

 

The Liquidator shall be indemnified and held harmless by the Company in the same
manner and to the same degree as an Indemnitee may be indemnified pursuant to
Section 6.6.

 

ARTICLE XIII
AMENDMENT OF DECLARATION; MEETINGS

 

Section 13.1                            Amendments

 

A.                                    General.  The Trustee’s prior written
consent shall be required to amend or waive any provisions of this Agreement. 
The Trustee, without consent of the Unitholders, may amend this Agreement in any
respect; provided, however, that the following amendments shall require Consent
of the Non-Trustee Unitholders:

 

(i)                                     any amendment to Section 7.6, its
related defined terms or otherwise affecting the operation of the Conversion
Factor or the Redemption Right, except as permitted pursuant to Section 7.6.E,
in each case in a manner that adversely affects the Unitholders in any material
respects;

 

(ii)                                  any amendment to Article IV, its related
defined terms or otherwise affecting the rights of the Unitholders to receive
the distributions payable to them hereunder, other than in connection with the
creation or issuance of new or additional Units pursuant to Section 3.2 and
except as permitted pursuant to Section 3.2 and Section 4.5, in each case in a
manner that adversely affects the Unitholders in any material respects;

 

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(iii)                               any amendment to Article V, its related
defined terms or otherwise that would materially alter the Company’s allocation
of Profit and Loss to the Unitholders, other than in connection with the
creation or issuance of new or additional Units pursuant to Section 3.2 and
except as permitted pursuant to Section 5.2;

 

(iv)                              any amendment that would (x) convert a
Unitholder’s interest in the Company into a Trustee’s interest, (y) modify the
limited liability of a Unitholder, or (z) impose on the Unitholders any
obligation to make additional Capital Contributions to the Company, or

 

(v)                                 any amendment to Section 3.2.A (proviso
only), Section 6.4, Section 10.2, Section 10.3 and this Section 13.1.A, in each
case together with their related defined terms.

 

B.                                    The Trustee shall notify the Unitholders
in writing of any amendment or waiver not requiring the Consent of the
Non-Trustee Unitholders made pursuant to Section 13.1.A in the next regular
communication to the Unitholders or within ninety (90) days of such amendment,
whichever is earlier.  For any amendment or waiver requiring the Consent of the
Non-Trustee Unitholders pursuant to Section 13.1.A, the Trustee shall seek the
written Consent of the Non-Trustee Unitholders as set forth in Section 13.2 on
such proposed amendments or waivers or shall call a meeting to vote thereon and
to transact any other business that it may deem appropriate.  For purposes of
obtaining a written Consent, the Trustee may require a response within a
reasonable specified time, but not less than seven (7) days, and failure to
respond in such time period shall constitute a vote in favor of the
recommendation of the Trustee.  Any such proposed amendment or waiver shall be
adopted and be effective as an amendment or waiver hereto if it is approved by
the Trustee and receives the Consent of the Non-Trustee Unitholders, as
applicable, in accordance with Section 13.1.A.

 

C.                                    Amendment and Restatement of Unitholder
Registry Not an Amendment.  Notwithstanding anything in this Article XIII or
elsewhere in this Agreement to the contrary, any amendment and restatement of
the Unitholder Registry by the Trustee 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 Trustee without the Consent of the Non-Trustee Unitholders and without
any notice requirement.

 

Section 13.2                            Meetings of the Unitholders

 

A.                                    General.  Neither the Company nor the
Trustee shall be required to call or hold any meeting of the Unitholders,
whether periodic or otherwise.  Meetings of the Unitholders may be called by the
Trustee.  The call shall state the nature of the business to be transacted. 
Notice of any such meeting shall be given to all Unitholders not less than seven
(7) days nor more than thirty (30) days prior to the date of such meeting.
Unitholders may vote in person or by proxy at such meeting.  Whenever the vote
or Consent of Unitholders is permitted or required under this Agreement, such
vote or Consent may be given at a meeting of Unitholders or may be given in
accordance with the procedure prescribed in Section 13.1.B.  Except as otherwise
expressly provided in this Agreement, the Consent of holders of Units
representing a majority of the Percentage Interests of the Class A Units shall
control (including Class A Units held by the Trustee).

 

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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 Unitholders may be taken without a meeting if a
written consent setting forth the action so taken is signed by Unitholders
holding Units 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 Trustee). 
Such consent may be in one instrument or in several instruments, and shall have
the same force and effect as a vote of Unitholders.  Such consent shall be
delivered to the Trustee.  An action so taken shall be deemed to have been taken
at a meeting held on the date on which written consents from the Unitholders
holding the required Percentage Interest of the Class A Units have been filed
with the Trustee.

 

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

 

D.                                    Votes.  On matters on which Unitholders
are entitled to vote, each Unitholder shall have the number of votes equal to
the number of Class A Units held.

 

E.                                     Conduct of Meeting.  Each meeting of
Unitholders shall be conducted by the Trustee or such other Person as the
Trustee may appoint pursuant to such rules for the conduct of the meeting as the
Trustee or such other Person deem appropriate.

 

F.                                      Record Date.  The Trustee may set, in
advance, the Company Record Date for the purpose of determining the Unitholders
(i) entitled to Consent to any action, (ii) entitled to receive notice of or
vote at any meeting of the Unitholders or (iii) in order to make a determination
of Unitholders for any other proper purpose.  Such date, in any case, (x) shall
not be prior to the close of business on the day the Company Record Date is
determined and shall be not more than ninety (90) days and, in the case of a
meeting of the Unitholders, not less than ten (10) days, before the date on
which the meeting is to be held or Consent is to be given and (y) shall be, with
respect to the determination of the existence of Company Approval, the record
date established by the Trustee for the approval of its shareholders for the
event constituting an Extraordinary Transaction.  If no record date is fixed,
the record date for the determination of Unitholders entitled to notice of or to
vote at a meeting of the Unitholders shall be at the close of business on the
day on which the notice of the meeting is sent, and the record date for any
other determination of Unitholders shall be the effective date of such
Unitholder action, distribution or other event.  When a determination of the
Unitholders entitled to vote at any meeting of the Unitholders has been made as
provided in this section, such determination shall apply to any adjournment
thereof.

 

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ARTICLE XIV
GENERAL PROVISIONS

 

Section 14.1                            Addresses and Notice

 

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

 

Section 14.2                            Titles and Captions

 

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

 

Section 14.3                            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 14.4                            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 14.5                            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 14.6                            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 Company.

 

Section 14.7                            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.

 

A-66

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Section 14.8                            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 14.9                            Applicable Law

 

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

 

Section 14.10                     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 14.11                     Power of Attorney

 

A.                                    General.  Each Unitholder and each
Assignee who accepts Units (or any rights, benefits or privileges associated
therewith) is deemed to irrevocably constitute and appoint the Trustee, 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 Declaration and all amendments or restatements thereof) that the Trustee
or any Liquidator deems appropriate or necessary to form, qualify or continue
the existence or qualification of the Company as a real estate investment trust
in the State of Maryland and in all other jurisdictions in which the Company may
conduct business or own property, (b) all instruments that the Trustee 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 Trustee or any
Liquidator deems appropriate or necessary to reflect the dissolution and
liquidation of the Company 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 Unitholder pursuant
to, or other events described in, Article X, XI or XII hereof or the Capital
Contribution of any Unitholder and (e) all certificates, documents and other
instruments relating to the determination of the rights, preferences and
privileges of Units; 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 Trustee or
any Liquidator, to make, evidence, give,

 

A-67

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confirm or ratify any vote, consent, approval, agreement or other action which
is made or given by the Unitholders hereunder or is consistent with the terms of
this Agreement or appropriate or necessary, in the sole and absolute discretion
of the Trustee or any Liquidator, to effectuate the terms or intent of this
Agreement.

 

Nothing contained in this Section 14.11 shall be construed as authorizing the
Trustee or any Liquidator to amend this Agreement except in accordance with
Article XIII hereof or as may be otherwise expressly provided for in this
Agreement.

 

B.                                    Irrevocable Nature.  The foregoing power
of attorney is hereby declared to be irrevocable and a power coupled with an
interest, in recognition of the fact that each of the Unitholders will be
relying upon the power of the Trustee or any Liquidator to act as contemplated
by this Agreement in any filing or other action by it on behalf of the Company,
and it shall survive and not be affected by the subsequent Incapacity of any
Unitholder or Assignee and the transfer of all or any portion of such
Unitholder’s or Assignee’s Units and shall extend to such Unitholder’s or
Assignee’s heirs, successors, assigns and personal representatives.  Each such
Unitholder or Assignee hereby agrees to be bound by any representation made by
the Trustee or any Liquidator, acting in good faith pursuant to such power of
attorney; and each such Unitholder or Assignee hereby waives any and all
defenses which may be available to contest, negate or disaffirm the action of
the Trustee or any Liquidator, taken in good faith under such power of
attorney.  Each Unitholder or Assignee shall execute and deliver to the Trustee
or the Liquidator, within fifteen (15) days after receipt of the Trustee’s or
Liquidator’s request therefor, such further designation, powers of attorney and
other instruments as the Trustee or the Liquidator, as the case may be, deems
necessary to effectuate this Agreement and the purposes of the Company.

 

Section 14.12                     Entire Agreement

 

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

 

Section 14.13                     No Rights as Shareholders

 

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

 

Section 14.14                     Limitation to Preserve REIT Status

 

If the Trustee attempts to qualify as a REIT, to the extent that any amount paid
or credited to the Trustee or any of its officers, trustees, employees or agents
pursuant to Section 6.3 would constitute gross income to the Trustee for
purposes of Section 856(c)(2) or 856(c)(3) of the Code (a “Trustee Payment”)
then, notwithstanding any other provision of this

 

A-68

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

 

Agreement, the amount of such Trustee 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 Trustee’s total gross income (within the meaning of
Section 856(c)(3) of the Code but not including the amount of any Trustee
Payments) for the Fiscal Year which is described in subsections (A) though
(I) 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 Trustee 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 Trustee
Payments); or

 

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

 

provided, however, that Trustee Payments in excess of the amounts set forth in
subparagraphs (i) and (ii) above may be made if the Trustee, as a condition
precedent, obtains an opinion of tax counsel that the receipt of such excess
amounts would not adversely affect the Trustee’s ability to qualify as a REIT. 
To the extent Trustee Payments may not be made in a given Fiscal Year due to the
foregoing limitations, such Trustee 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 Fiscal Years, and if not paid within such five
Fiscal Year period, shall expire; and provided further that (i) as Trustee
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]

 

A-69

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EXHIBIT A

 

FORM OF UNITHOLDER REGISTRY

 

Effective as of [       ], 2016

 

 

 

CLASS A UNITS / LTIP UNITS

 

Name and Address of Unitholder

 

Class A
Units

 

LTIP
Units

 

Capital
Account Balance

 

Percentage
Interest

 

TRUSTEE:

 

 

 

 

 

 

 

 

 

EQUITY COMMONWEALTH
Two North Riverside Plaza
Suite 2100
Chicago, IL 60606
Attn: General Counsel

Facsimile: (312) 464-2999

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

UNITHOLDER:

 

 

 

 

 

 

 

 

 

[·]

Attn:

Facsimile:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

[NAME]

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

[NAME]

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

TOTAL UNITS

 

Class A Units

 

LTIP Units

 

 

 

100.000

%

 

 

 

PREFERRED UNITS

 

Name and Address of Unitholder

 

Preferred
Units (Series D) /
Percentage Interest

 

Preferred Units
(Series [  ]) /
Percentage Interest

 

Preferred Units
(Series [  ]) /
Percentage Interest

 

Preferred Units
(Series [  ]) /
Percentage Interest

 

TRUSTEE:

 

 

 

 

 

 

 

 

 

EQUITY COMMONWEALTH

Two North Riverside Plaza Suite 2100

Chicago, IL 60606

Attn: General Counsel

Facsimile: (312) 464-2999

 

[  ] / 100%

 

 

 

 

 

 

 

 

Exhibit A-1

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

 

EXHIBIT B

 

CAPITAL ACCOUNT MAINTENANCE

 

1.                                      Capital Accounts of the Unitholders

 

A.                                    The Company shall maintain for each
Unitholder 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 Unitholder to the Company pursuant to this Agreement
and (ii) all items of Company income and gain (including income and gain exempt
from tax) computed in accordance with Section 1.B hereof and allocated to such
Unitholder pursuant to Section 5.1 of the Agreement and this Exhibit B, and
decreased by (x) the amount of cash or Agreed Value of property actually
distributed or deemed to be distributed to such Unitholder pursuant to this
Agreement and (y) all items of Company deduction and loss computed in accordance
with Section 1.B hereof and allocated to such Unitholder pursuant to Section 5.1
of the Agreement and this Exhibit B.

 

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

 

(1)                                 Except as otherwise provided in Regulations
Section 1.704-1(b)(2)(iv)(m), the computation of Net Income, Net Loss and 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 Company pursuant to
Sections 754 of the Code, provided, however, that the amounts of any adjustments
to the adjusted bases of the assets of the Company made pursuant to Section 734
of the Code as a result of the distribution of property by the Company to a
Unitholder (to the extent that such adjustments have not previously been
reflected in the Unitholders’ Capital Accounts) shall be reflected in the
Capital Accounts of the Unitholders in the manner and subject to the limitations
prescribed in Regulations Section l.704-1(b)(2)(iv)(m)(4).

 

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

 

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

 

Exhibit B-1

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

 

(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 or shorter period.

 

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

 

(6)                                 Any items specially allocated under
Section 1 of Exhibit C to the Agreement hereof shall not be taken into account.

 

C.                                    A transferee (including any Assignee) of a
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 Company assets shall be adjusted upward or downward to
reflect any Unrealized Gain or Unrealized Loss attributable to such Company
property, as of the times of the adjustments provided in Section 1.D(2) hereof,
as if such Unrealized Gain or Unrealized Loss had been recognized on an actual
sale of each such property and allocated pursuant to Section 5.1 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 Company by any new or existing Unitholder in exchange for more
than a de minimis Capital Contribution; (b) immediately prior to the
distribution by the Company to a Unitholder of more than a de minimis amount of
property as consideration for an interest in the Company (including, for the
avoidance of doubt, a special distribution); (c) immediately prior to the
liquidation of the Company within the meaning of Regulations
Section 1.704-l(b)(2)(ii)(g); (d) immediately prior to the grant of an interest
in the Company (other than a de minimis interest) as consideration for the
provision of services to or for the benefit of the Company by an existing
Unitholder acting in a Unitholder capacity or by a new Unitholder acting in a
Unitholder capacity or in anticipation of becoming a Unitholder (including the
issuance of any LTIP Units); and (e) at such other times as permitted or
required under Regulations; provided, however, that adjustments pursuant to
clauses (a), (b), (d) and (e) (to the extent not required by Regulations) above
shall be made only if the Trustee determines that such adjustments are necessary
or appropriate to reflect the relative economic interests of the Unitholders in
the Company.

 

(3)                                 In accordance with Regulations
Section 1.704- l(b)(2)(iv)(e), the Carrying Value of Company assets distributed
in kind shall be adjusted upward or downward to reflect any Unrealized Gain or
Unrealized Loss attributable to such Company 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 Company assets (including cash or cash equivalents) shall be
determined by the Trustee using such reasonable method of

 

Exhibit B-2

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

 

valuation as it may adopt, or in the case of a liquidating distribution pursuant
to Article XII of the Agreement, shall be determined and allocated by the
Liquidator using such reasonable methods of valuation as it may adopt.  The
Trustee, or the Liquidator, as the case may be, shall allocate such aggregate
fair market value among the assets of the Company 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 Trustee 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 Company, the Trustee, or the Unitholders) are computed in
order to comply with such Regulations, the Trustee may make such modification
without regard to Article XIII of the Agreement, provided that it is not likely
to have a material effect on the amounts distributable to any Person pursuant to
Article XII of the Agreement upon the dissolution of the Company.  The Trustee
also shall (i) make any adjustments that are necessary or appropriate to
maintain equality between the Capital Accounts of the Unitholders and the amount
of Company capital reflected on the Company’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 Company on Capital Contributions or on balances
in Unitholders’ Capital Accounts.

 

3.                                      No Withdrawal

 

No Unitholder shall be entitled to withdraw any part of its Capital Contribution
or Capital Account or to receive any distribution from the Company, except as
provided in Articles III, IV, VI and XII of the Agreement.

 

Exhibit B-3

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

 

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 5.1 of the Agreement or any other provisions of this
Exhibit C, if there is a net decrease in Company Minimum Gain during any Fiscal
Year, each Unitholder shall be specially allocated items of Company income and
gain for such year (and, if necessary, subsequent years) in an amount equal to
such Unitholder’s share of the net decrease in Company 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 Unitholder 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 Unitholder’s Adjusted Capital Account Deficit
shall be determined prior to any other allocations pursuant to Section 5.1 of
the Agreement or this Exhibit C with respect to such Fiscal Year and without
regard to any decrease in Unitholder Minimum Gain during such Fiscal Year.

 

B.                                    Unitholder Minimum Gain Chargeback. 
Notwithstanding any other provision of Section 5.1 of this Agreement or any
other provisions of this Exhibit C (except Section 1.A hereof), if there is a
net decrease in Unitholder Minimum Gain attributable to Unitholder Nonrecourse
Debt during any Fiscal Year, each Unitholder who has a share of the Unitholder
Minimum Gain attributable to such Unitholder Nonrecourse Debt, determined in
accordance with Regulations Section 1.704-2(i)(5), shall be specially allocated
items of Company income and gain for such year (and, if necessary, subsequent
years) in an amount equal to such Unitholder’s share of the net decrease in
Unitholder Minimum Gain attributable to such Unitholder Nonrecourse Debt,
determined in accordance with Regulations Section 1.704-2(i)(4).  Allocations
pursuant to the previous sentence shall be made in proportion to the respective
amounts required to be allocated to each Trustee and Unitholder 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 Unitholder’s Adjusted Capital Account Deficit shall be
determined prior to any other allocations pursuant to Section 5.1 of the
Agreement or this Exhibit C with respect to such Fiscal Year, other than
allocations pursuant to Section 1.A hereof.

 

C.                                    Qualified Income Offset.  In the event any
Unitholder unexpectedly receives any adjustments, allocations or distributions
described in Regulations Sections 1.704-l(b)(2)(ii)(d)(4),
l.704-1(b)(2)(ii)(d)(5), or 1.704-l(b)(2)(ii)(d)(6), and after giving effect to
the allocations required under Sections 1.A and 1.B hereof with respect to such
Fiscal Year, such Unitholder has

 

Exhibit C-1

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

 

an Adjusted Capital Account Deficit, items of Company income and gain
(consisting of a pro rata portion of each item of Company income, including
gross income and gain for the Fiscal Year) shall be specifically allocated to
such Unitholder 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 Unitholder 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
Unitholder shall be specially allocated items of Company income and gain
(consisting of a pro rata portion of each item of Company 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 Trustee pursuant to Section 3.2 of the
Agreement with respect to other classes of Units, Nonrecourse Deductions for any
Fiscal Year shall be allocated only to the Unitholders holding Class A Units in
accordance with their respective Percentage Interests.  If the Trustee
determines in its good faith discretion that the Company’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 Trustee is authorized, upon notice to the Unitholders, to revise the
prescribed ratio for such Fiscal Year to the numerically closest ratio which
would satisfy such requirements.

 

F.                                      Unitholder Nonrecourse Deductions.  Any
Unitholder Nonrecourse Deductions for any Fiscal Year shall be specially
allocated to the Unitholder who bears the economic risk of loss with respect to
the Unitholder Nonrecourse Debt to which such Unitholder 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
Company 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 Unitholders in a manner
consistent with the manner in which their Capital Accounts are required to be
adjusted pursuant to such Section of the Regulations.

 

H.                                   Forfeiture Allocations.  Upon a forfeiture
of any unvested Units by any Unitholder, gross items of income, gain, loss or
deduction shall be allocated to such Unitholder if and to the extent required by
final Treasury Regulations promulgated after the date hereof (or, if final
Treasury Regulations have not yet been promulgated, to the extent determined by
the Trustee, in its sole discretion, as necessary) to ensure that allocations
made with respect to all unvested Units are recognized under Code
Section 704(b).

 

Exhibit C-2

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

 

I.                                        The allocations set forth in clauses
(A) through (F) of this Section 1 (“Regulatory Allocations”) are intended to
comply with certain regulatory requirements, including the requirements of
Regulations Section 1.704-1(b) and 1.704-2.  Notwithstanding the provisions of
Section 5.1 of the Agreement, the Regulatory Allocations shall be taken into
account in allocating other items of income, gain, loss and deduction among the
Unitholders so that, to the extent possible without violating the requirements
giving rise to the Regulatory Allocations, the net amount of such allocations of
other items and the Regulatory Allocations to each Unitholder shall be equal to
the net amount that would have been allocated to each such Unitholder if the
Regulatory Allocations had not been made.

 

2.                                      Allocations for Tax Purposes

 

A.                                    Except as otherwise provided in this
Section 2, for federal income tax purposes, each item of income, gain, loss and
deduction shall be allocated among the Unitholders in the same manner as its
correlative item of “book” income, gain, loss or deduction is allocated pursuant
to Section 5.1 of the Agreement and Section 1 of this Exhibit C.

 

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

 

(1)                                 (a)                                 In the
case of a Contributed Property, such items attributable thereto shall be
allocated among the Unitholders 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 Unitholders
in the same manner as its correlative item of “book” gain or loss is allocated
pursuant to Section 5.1 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
Unitholders 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 Unitholders 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 Unitholders in
the same manner its correlative item of “book” gain or loss is allocated
pursuant to Section 5.1 of the Agreement and Section 1 of this Exhibit C.

 

Exhibit C-3

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

 

(3)                                 all other items of income, gain, loss and
deduction shall be allocated among the Unitholders the same manner as their
correlative item of “book” gain or loss is allocated pursuant to Section 5.1 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 Company to utilize alternative
methods to eliminate the disparities between the Carrying Value of property and
its adjusted basis, the Trustee shall, subject to any agreements between the
Company and a Unitholder, have the authority to elect the method to be used by
the Company and such election shall be binding on all Unitholders.

 

Exhibit C-4

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EXHIBIT D

 

NOTICE OF REDEMPTION

 

The undersigned hereby irrevocably (i) redeems                    Units in EQC
Operating Trust in accordance with the terms of the Declaration of Trust of EQC
Operating Trust, as amended, and the Redemption Right referred to therein,
(ii) surrenders such Units and all right, title and interest therein and
(iii) directs that the Cash Amount or Shares Amount (as determined by the
Trustee) 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 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 Units as provided herein and
(c) has obtained the consent or approval of all persons or entities, if any,
having the right to consult or approve such redemption and surrender.

 

 

Dated:

 

 

Name of Unitholder:

 

 

 

 

 

 

 

(Signature of Unitholder)

 

 

 

 

 

 

 

(Street Address)

 

 

 

 

 

 

 

(City) (State) (Zip Code)

 

 

 

 

 

Signature Guaranteed by:

 

 

 

 

 

 

 

Exhibit D-1

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IF SHARES ARE TO BE ISSUED, ISSUE TO:

 

 

 

 

 

Name:

 

 

 

 

 

 

 

Social Security or tax identifying number:

 

 

Exhibit D-2

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EXHIBIT E

 

FORM OF DRO REGISTRY

 

PART I DRO UNITHOLDERS

DRO AMOUNT

 

 

 

 

PART II DRO UNITHOLDERS

 

 

Exhibit E-1

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EXHIBIT F

 

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

 

The undersigned holder of LTIP Units hereby irrevocably (i) elects to convert
              LTIP Units in EQC Operating Trust (the “Company”) into Class A
Units in accordance with the terms of the Declaration of Trust of the Company,
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 Company; (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.

 

Dated:

 

 

Name of Holder:

 

 

 

 

 

 

 

(Signature of Holder)

 

 

 

 

 

 

 

(Street Address)

 

 

 

(City)

(State)

(Zip Code)

 

 

 

Signature Guaranteed by:

 

 

 

 

 

Exhibit F-1

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ATTACHMENT A

 

SERIES D PREFERRED UNITS

 

A.                                    Defined Terms.  Capitalized terms used but
not defined herein shall have the meanings set forth for such terms in Annex A
to the Trustee’s Declaration of Trust, to which this Attachment A is attached.

 

B.                                    Designation and Number. A series of Units,
designated as Series D Cumulative Convertible Preferred Units (“Series D
Preferred Units”), is hereby established. The number of Series D Preferred Units
shall be 4,915,196.  The Series D Preferred Units shall be issued to the Trustee
and are intended to correspond to the outstanding 6-1/2% Series D Cumulative
Convertible Preferred Shares, $0.01 par value per share, of the Trustee (the
“Series D Shares”), with such preferences, rights, voting powers, restrictions,
limitations as to distributions, qualifications and terms and conditions of
redemption as described in the Articles Supplementary dated October 10, 2006
(the “Series D Articles Supplementary”) with respect to the Series D Preferred
Shares.

 

C.                                    Rank. The Series D Preferred Units will,
with respect to rights to receive distributions and to participate in
distributions or payments upon liquidation, dissolution or winding up of the
Trust, rank (a) senior to the Class A Units and any other Units of the Trust,
now or hereafter issued and outstanding, the terms of which provide that such
Units rank, as to distributions and upon liquidation, dissolution or winding up
of the Trust, junior to such Series D Preferred Units (“Junior Units”), (b) on a
parity with any Units of the Trust, now or hereafter issued and outstanding, the
terms of which specifically provide that such Units rank on a parity with the
Series D Preferred Units (“Parity Units”); and (c) junior to all Units of the
Trust, now or hereafter issued and outstanding, the terms of which specifically
provide that such Units rank senior to the Series D Preferred Units.

 

D.                                    Distributions.

 

(i)                                     Subject to the rights of holders of any
Units ranking senior to the Series D Preferred Units as to the payment of
distributions, the holder(s) of the outstanding Series D Preferred Units, shall
be entitled to receive, when, as and if authorized by the Trust, out of funds
legally available for payment of distributions, cumulative cash distributions at
the rate of 6.50% per annum of the $25 liquidation preference of each Series D
Preferred Unit (equivalent to $1.625 per annum per Series D Preferred Unit).

 

(ii)                                  Distributions on each outstanding Series D
Preferred Unit shall be cumulative from and including the date of original
issuance and shall be payable quarterly in equal amounts in arrears on the 15th
of each February, May, August and November, commencing on [November 15,
2016](1) (each such day being hereinafter called a “Series D Distribution
Payment Date”) at the then applicable annual rate; provided, however, that if
any Series D Distribution Payment Date falls on any day other

 

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(1)  To correspond to the first payment day following closing of the UPREIT
Conversion.

 

Attachment A-1

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than a Business Day (as defined in the Series D Articles Supplementary), the
distribution which would otherwise have been payable on such Series D
Distribution Payment Date may be paid on the next succeeding Business Day with
the same force and effect as if paid on such Series D Distribution Payment Date,
and no interest or other sums shall accrue on the amount so payable from such
Series D Distribution Payment Date to such next succeeding Business Day. Each
distribution is payable to holders of record as they appear on the books and
records of the Trust at the close of business on the record date, which shall be
a date designated by the Trust for the payment of distributions that is not more
than 60 days nor less than 10 days prior to the applicable distribution payment
date. Distributions shall accrue from and including the date of original issue
or the most recent Series D Distribution Payment Date to and excluding the next
following Series D Dividend Payment Date, whether or not there shall be funds
legally available for the payment of such distributions, whether the Trust has
earnings or whether such distributions are authorized. No interest, or sum of
money in lieu of interest, shall be payable in respect of any distribution
payment or payments on the Series D Preferred Units that may be in arrears.
Holders of the Series D Preferred Units shall not be entitled to any
distributions, whether payable in cash, property or stock, in excess of full
cumulative distributions, as herein provided, on the Series D Preferred Units.
Distributions payable on the Series D Preferred Units for any period greater or
less than a full distribution period will be computed on the basis of a 360-day
year consisting of twelve 30-day months. After full cumulative distributions on
the Series D Preferred Units have been paid or declared and funds therefor set
aside for payment with respect to a distribution period, the holders of Series D
Preferred Units will not be entitled to any further distributions with respect
to that distribution period.

 

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

 

(iv)                              So long as any Series D Preferred Units are
outstanding, no distributions, except as described in the immediately following
sentence, shall be authorized and declared or paid or set apart for payment on
any series or class or classes of Parity Units for any period unless full
cumulative distributions have been declared and paid or are contemporaneously
declared and paid or declared and a sum sufficient for the payment thereof set
apart for such payment on the Series D Preferred Units for all prior
distribution periods. When distributions are not paid in full or a sum
sufficient for such payment is not set apart, as aforesaid, all distributions
authorized and declared upon the Series D Preferred Units and all distributions
authorized and declared upon any other series or class or classes of Parity
Units shall be authorized and declared ratably in proportion to the respective
amounts of distributions accrued and unpaid on the Series D Preferred Units and
such Parity Units.

 

Attachment A-2

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(v)                                 So long as any Series D Preferred Units are
outstanding, no distributions (other than distributions paid solely in Junior
Units of, or in options, warrants or rights to subscribe for or purchase, Junior
Units) shall be authorized and declared or paid or set apart for payment or
other distribution authorized and declared or made upon Junior Units, nor shall
any Junior Units be redeemed, purchased or otherwise acquired (other than (i) a
redemption, purchase or other acquisition of Units made for purposes of and in
compliance with requirements of an employee incentive or benefit plan of the
Trustee or any subsidiary, (ii) a conversion into or exchange for Junior Units,
(iii) redemptions for the purpose of preserving the Trustee’s qualification as a
REIT (as defined in the Agreement), or (iv) redemptions or exchanges of Units
pursuant to the terms of the Agreement), for any consideration (or any monies to
be paid to or made available for a sinking fund for the redemption of any such
units) by the Trust, directly or indirectly (except by conversion into or
exchange for Junior Units), unless in each case full cumulative distributions on
all outstanding shares of Series D Preferred Units and any Parity Units at the
time such distributions are payable shall have been paid or set apart for
payment for all past distribution periods with respect to the Series D Preferred
Units and all past distribution periods with respect to such Parity Units.

 

(vi)                              Any distribution payment made on the Series D
Preferred Units shall first be credited against the earliest accrued but unpaid
distribution due with respect to such Units which remains payable.

 

(vii)                           Except as provided herein, the Series D
Preferred Units shall not be entitled to participate in the earnings or assets
of the Trust.

 

(viii)                        As used herein, the term “distribution” does not
include distributions payable solely in Junior Units on Junior Units, or in
options, warrants or rights to holders of Junior Units to subscribe for or
purchase any Junior Units.

 

E.                                     Liquidation Preference.

 

(i)                                     In the event of any liquidation,
dissolution or winding up of the Trust, whether voluntary or involuntary, before
any payment or distribution of the assets of the Trust shall be made to or set
apart for the holders of Junior Units, the holders of the Series D Preferred
Units shall be entitled to receive $25 per Unit (the “Liquidation Preference”)
plus an amount per Unit equal to all distributions (whether or not earned or
declared) accrued and unpaid thereon to, but not including, the date of final
distribution to such holders; but such holders of the Series D Preferred Units
shall not be entitled to any further payment. If, upon any such liquidation,
dissolution or winding up of the Trust, the assets of the Trust, or proceeds
thereof, distributable among the holders of the Series D Preferred Units shall
be insufficient to pay in full the preferential amount aforesaid and liquidating
payments on any other Parity Units, then such assets, or the proceeds thereof,
shall be distributed among the holders of such Series D Preferred Units and any
such other Parity Units ratably in accordance with the respective amounts that
would be payable on such Series D Preferred Units and any such other Parity
Units if all amounts payable thereon were paid in full. For the purposes of this
Section E, none of

 

Attachment A-3

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(i) a consolidation or merger of the Trust with one or more entities, (ii) a
statutory Unit exchange or (iii) a sale, lease, conveyance or transfer of all or
substantially all of the Trust’s assets shall be deemed to be a liquidation,
dissolution or winding up, voluntary or involuntary, of the Trust.

 

(ii)                                  Subject to the rights of the holders of
Parity Units, upon any liquidation, dissolution or winding up of the Trust,
after payment shall have been made in full to the holders of the Series D
Preferred Units, as provided in this Section E, any series or class or classes
of Junior Units shall, subject to any respective terms and provisions applying
thereto, be entitled to receive any and all assets remaining to be paid or
distributed, and the holders of the Series D Preferred Units shall not be
entitled to share therein.

 

F.                                      Redemption. In connection with the
redemption by the Trustee of any Series D Preferred Shares, the Trust shall
provide cash to the Trustee for such purpose which shall be equal to the
redemption price (as set forth in the Series D Articles Supplementary), plus any
accrued and unpaid dividends on the Series D Preferred Shares (whether or not
declared), to, but not including, the redemption date, and one Series D
Preferred Unit shall be concurrently redeemed with respect to each share of
Series D Preferred Shares so redeemed by the Trustee. From and after the
applicable redemption date, the Series D Preferred Units so redeemed shall no
longer be outstanding and all rights hereunder, to distributions or otherwise,
with respect to such Series D Preferred Units shall cease. Any Series D
Preferred Units so redeemed may be reissued to the Trustee at such time as the
Trustee reissues a corresponding number of shares of Series D Preferred Shares
so redeemed or repurchased, in exchange for the contribution by the Trustee to
the Trust of the proceeds from such reissuance.

 

G.                                    Voting Rights. Except as required by
applicable law or the Agreement, the holder of the Series D Preferred Units, as
such, shall have no voting rights.

 

H.                                   Conversion. The Series D Preferred Units
are not convertible into or exchangeable for any other property or securities of
the Trust, except as provided herein.

 

(i)                                     In the event of a conversion of any
Series D Preferred Shares into common shares of beneficial interest of the
Trustee, par value $0.01 per share (“Shares”), whether by the Trustee or by the
holder of such Series D Preferred Shares, in accordance with the Series D
Articles Supplementary, immediately upon conversion of such Series D Preferred
Shares, a number of the Series D Preferred Units equal to the number of such
Series D Preferred Shares being converted shall convert into a number of Class A
Units equal to the number of Shares into which such Series D Preferred Shares
were converted. In the event of a conversion of any Series D Preferred Shares
into consideration other than Shares in accordance with the Series D Articles
Supplementary, the Trust shall retire a number of Series D Preferred Units equal
to the number of shares of Series D Preferred Shares converted into such other
form of consideration. In the event of a conversion of the Series D Preferred
Shares into Shares, to the extent the Trustee is required to pay cash in lieu of
fractional shares of Shares pursuant to the Series D Articles Supplementary in
connection with such conversion, the Trust shall distribute an equal amount of
cash to the Trustee in lieu of fractional Class A Units.

 

Attachment A-4

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(ii)                                  Following any such conversion retirement
by the Trust pursuant to this Section H, the Trustee shall make such revisions
to the Agreement as it determines are necessary to reflect such conversion.

 

I.                                        Restriction on Ownership. The Series D
Preferred Units shall be owned and held solely by the Trustee.

 

J.                                        Allocations. Allocations of the
Trust’s items of income, gain, loss and deduction shall be allocated pro rata
among holders of Series D Preferred Units in accordance with Article V of the
Agreement.

 

Attachment A-5

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