Exhibit 10.2

 

 

 

SECOND AMENDED AND RESTATED AGREEMENT

OF LIMITED PARTNERSHIP

OF

CBRE OPERATING PARTNERSHIP, L.P.

 

 

Dated as of January 30, 2009

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TABLE OF CONTENTS

 

     Page

ARTICLE I DEFINED TERMS

   1

ARTICLE II ORGANIZATIONAL MATTERS

   12

Section 2.01.

   Organization    12

Section 2.02.

   Name    12

Section 2.03.

   Registered Office and Agent; Principal Office    12

Section 2.04.

   Term    12

ARTICLE III PURPOSE

   13

Section 3.01.

   Purpose and Business    13

Section 3.02.

   Powers    13

Section 3.03.

   Partnership Only for Purposes Specified    13

ARTICLE IV CAPITAL CONTRIBUTIONS AND ISSUANCES OF PARTNERSHIP INTERESTS

   13

Section 4.01.

   Capital Contributions of the Partners    13

Section 4.02.

   Issuances of Partnership Interests    14

Section 4.03.

   No Preemptive Rights    15

Section 4.04.

   Other Contribution Provisions    15

Section 4.05.

   No Interest on Capital    16

ARTICLE V DISTRIBUTIONS

   16

Section 5.01.

   Requirement and Characterization of Distributions    16

Section 5.02.

   Amounts Withheld    17

Section 5.03.

   Distributions Upon Liquidation    17

Section 5.04.

   Revisions to Reflect Issuance of Additional Partnership Interests    17

ARTICLE VI ALLOCATIONS

   17

Section 6.01.

   Allocations For Capital Account Purposes    17

Section 6.02.

   Revisions to Allocations to Reflect Issuance of Additional Partnership
Interests    19

ARTICLE VII MANAGEMENT AND OPERATIONS OF BUSINESS

   20

Section 7.01.

   Management    20

Section 7.02.

   Certificate of Limited Partnership    23

Section 7.03.

   Title to Partnership Assets    23

Section 7.04.

   Reimbursement of the General Partner    23

Section 7.05.

   Outside Activities of the General Partner    24

Section 7.06.

   Transactions with Affiliates    26

Section 7.07.

   Indemnification    26

 

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TABLE OF CONTENTS

(continued)

 

          Page

Section 7.08.

   Liability of the General Partner    28

Section 7.09.

   Other Matters Concerning the General Partner    29

Section 7.10.

   Reliance by Third Parties    29

Section 7.11.

   Restrictions on General Partner’s Authority    30

Section 7.12.

   Loans by Third Parties    30

ARTICLE VIII RIGHTS AND OBLIGATIONS OF LIMITED PARTNERS

   30

Section 8.01.

   Limitation of Liability    30

Section 8.02.

   Management of Business    30

Section 8.03.

   Outside Activities of Limited Partners    31

Section 8.04.

   Return of Capital    31

Section 8.05.

   Rights of Limited Partners Relating to the Partnership    31

Section 8.06.

   Class A Redemption Right    32

Section 8.07.

   Redemption of Class B Interest; Advisor Redemption Interest    33

Section 8.08.

   Voting Rights Of the Class B Interest    34

ARTICLE IX BOOKS, RECORDS, ACCOUNTING AND REPORTS

   34

Section 9.01.

   Records and Accounting    34

Section 9.02.

   Fiscal Year    35

Section 9.03.

   Reports    35

ARTICLE X TAX MATTERS

   35

Section 10.01.

   Preparation of Tax Returns    35

Section 10.02.

   Tax Elections    35

Section 10.03.

   Tax Matters Partner    35

Section 10.04.

   Organizational Expenses    37

Section 10.05.

   Withholding    37

ARTICLE XI TRANSFERS AND WITHDRAWALS

   37

Section 11.01.

   Transfer    37

Section 11.02.

   Transfers of Partnership Interests of General Partner    38

Section 11.03.

   Limited Partners’ Rights to Transfer    38

Section 11.04.

   Substituted Limited Partners    39

Section 11.05.

   Assignees    40

Section 11.06.

   General Provisions    40

ARTICLE XII ADMISSION OF PARTNERS

   42

Section 12.01.

   Admission of Successor General Partner    42

Section 12.02.

   Admission of Additional Limited Partners    42

 

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TABLE OF CONTENTS

(continued)

 

          Page

Section 12.03.

   Amendment of Agreement and Certificate of Limited Partnership    42

ARTICLE XIII DISSOLUTION AND LIQUIDATION

   43

Section 13.01.

   Dissolution    43

Section 13.02.

   Winding Up    43

Section 13.03.

   Deemed Distribution and Recontribution    45

Section 13.04.

   Rights of Limited Partners    45

Section 13.05.

   Notice of Dissolution    46

Section 13.06.

   Cancellation of Certificate of Limited Partnership    46

Section 13.07.

   Reasonable Time for Winding Up    46

Section 13.08.

   Waiver of Partition    46

Section 13.09.

   Liability of Liquidator    46

ARTICLE XIV AMENDMENT OF PARTNERSHIP AGREEMENT; MEETINGS

   46

Section 14.01.

   Amendments    46

Section 14.02.

   Meetings of the Partners    48

ARTICLE XV GENERAL PROVISIONS

   49

Section 15.01.

   Addresses and Notice    49

Section 15.02.

   Titles and Captions    49

Section 15.03.

   Pronouns and Plurals    49

Section 15.04.

   Further Action    49

Section 15.05.

   Binding Effect    49

Section 15.06.

   Creditors    49

Section 15.07.

   Waiver    49

Section 15.08.

   Counterparts    49

Section 15.09.

   Applicable Law    50

Section 15.10.

   Invalidity of Provisions    50

Section 15.11.

   Power of Attorney    50

Section 15.12.

   Entire Agreement    51

Section 15.13.

   No Rights as Stockholders    51

Section 15.14.

   Limitation to Preserve REIT Status    51

 

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SECOND AMENDED AND RESTATED

AGREEMENT OF LIMITED PARTNERSHIP

OF

CBRE OPERATING PARTNERSHIP, L.P.

THIS SECOND AMENDED AND RESTATED AGREEMENT OF LIMITED PARTNERSHIP, dated as of
January 30, 2009, is entered into by and among CB Richard Ellis Realty Trust, a
Maryland real estate investment trust, as the General Partner of and a Limited
Partner in CBRE Operating Partnership, L.P., and the Persons (as defined below)
whose names are set forth on Exhibit A, as attached hereto (as it may be amended
from time to time).

AGREEMENT

WHEREAS, the parties hereto are party to an Amended and Restated Agreement of
Limited Partnership, dated October 24, 2006 (the “Amended and Restated Agreement
of Limited Partnership”), which amended and restated the Agreement of Limited
Partnership, dated July 1, 2004 (the “Original Agreement of Limited
Partnership”);

WHEREAS, the parties hereto wish to amend and restate the Amended and Restated
Agreement of Limited Partnership to make certain other changes as agreed to
among the parties; and

NOW, THEREFORE, in consideration of the mutual covenants set forth herein, and
for other good and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, the parties hereto hereby enter into this Second
Amended and Restated Agreement of Limited Partnership (the “Agreement”) in its
entirety and agree to continue the Partnership as a limited partnership under
the Delaware Revised Uniform Limited Partnership Act, as amended from time to
time, as follows:

ARTICLE I

DEFINED TERMS

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

“Act” means the Delaware Revised Uniform Limited Partnership Act,
6 Del. C. § 17-101, et seq., as it may be amended from time to time, and any
successor to such statute.

“Additional Limited Partner” means a Person admitted to the Partnership as a
Limited Partner pursuant to Section 12.02 hereof and who is shown as such on the
books and records of the Partnership.

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

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

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

“Adjustment Date” has the meaning set forth in Section 4.02.B hereof.

“Advisor” means CBRE Advisors LLC, a Delaware limited liability company.

“Advisor Redemption Interest” has the meaning set forth in Section 8.07.A
hereof.

“Advisor Redemption Interest Amount” has the meaning set forth in Section 8.07.A
hereof.

“Advisory Agreement” means the second amended and restated agreement entered
into among the General Partner, the Partnership and the Advisor, dated as of
January 30, 2009.

“Affiliate” means, with respect to any Person, (i) any Person directly or
indirectly owning, controlling or holding, with the power to vote, ten percent
or more of the outstanding voting securities of such other Person; (ii) any
Person ten percent or more of whose outstanding voting securities are directly
or indirectly owned, controlled or held, with the power to vote, by such other
Person; (iii) any Person directly or indirectly controlling, controlled by or
under common control with such other Person; (iv) any executive officer,
director, trustee or general partner of such other Person; and (v) any legal
entity for which such Person acts as an executive officer, director, trustee or
general partner.

“Aggregate Class A Unit Purchase Price” means an amount equal to the sum of the
amount of cash paid for the Class A Units, plus the Agreed Value of Contributed
Property contributed for Class A Units.

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

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

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

“Amended and Restated Agreement of Limited Partnership” has the meaning set
forth in the preamble of this Agreement.

“Assignee” means a Person to whom one or more Partnership Units have been
transferred in a manner permitted under this Agreement, but who has not become a
Substituted Limited Partner, and who has the rights set forth in Section 11.05
hereof.

“Bankruptcy” means, with respect to any Person, (a) the filing by such Person of
a voluntary petition seeking liquidation, reorganization, arrangement or
readjustment, in any form, of its debts under Title 11 of the United States Code
or any other federal, state or foreign insolvency law, or such Person’s filing
an answer consenting to or acquiescing in any such petition, (b) the making by
such Person of any

 

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assignment for the benefit of its creditors, (c) the expiration of sixty
(60) days after the filing of an involuntary petition under Title 11 of the
Unites States Code, an application for the appointment of a receiver for a
material portion of the assets of such Person, or an involuntary petition
seeking liquidation, reorganization, arrangement or readjustment of its debts
under any other federal, state or foreign insolvency law, provided that the same
shall not have been vacated, set aside or stayed within such 60-day period,
(d) the entry against it of a final and non-appealable order for relief under
any bankruptcy, insolvency or similar law now or hereinafter in effect, (e) the
attachment or other judicial seizure of all or substantially all of its assets,
which remains pending, (f) its acknowledgement in writing of its inability to
pay its debts as they come due, (g) its entry into an offer of settlement,
extension or composition to its creditors generally, (h) its taking any action
for the purpose of effecting any of the foregoing, or (i) a determination by the
Board, in its reasonable discretion, that such Person is bankrupt, insolvent or
otherwise unable to pay its debts as they come due.

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

“Business Day” means any day, other than a Saturday or Sunday, that is neither a
legal holiday nor a day on which banking institutions in New York City are
authorized or required by law, regulation or executive order to close.

“Capital Account” means the Capital Account maintained for a Partner pursuant to
Exhibit B hereto.

“Capital Contribution” means, with respect to any Partner, any cash, cash
equivalents or the Agreed Value of Contributed Property which such Partner
contributes or is deemed to contribute to the Partnership pursuant to
Section 4.01 or 4.02 hereof.

“Capital Proceeds” means the net cash proceeds received by the Partnership from
any Capital Transaction, after taking into account (i) all expenditures to be
made out of such proceeds, (ii) payment of or provision for all debts and
obligations to be satisfied as the result of or in connection with such Capital
Transaction, (iii) payment of all costs and expenses incurred in connection with
the receipt or collection of such proceeds and the setting aside of any reserves
from such proceeds. Upon the occurrence of a transaction described in (vii) and
(viii) of the definition of “Capital Transaction” below, Capital Proceeds shall
be deemed to mean the notional net proceeds which would be available had the
Partnership’s assets been liquidated at an amount sufficient to yield the price
inherent in the subject transaction.

“Capital Transaction” means (i) any sale, exchange, transfer, assignment or
other disposition of all or a portion of the Partnership’s assets or of any real
estate interest in which the Partnership holds a direct or indirect interest,
(ii) any financing or refinancing of any indebtedness of the Partnership or any
financing or refinancing in respect of assets in which the Partnership holds a
direct or indirect real estate interest, (iii) the taking of all or a portion of
the assets of the Partnership (or of assets in which the Partnership holds a
direct or indirect real estate interest) by any governmental authority through
the exercise of the power of eminent domain or condemnation or the delivery of a
deed or transfer in lieu of such taking, (iv) the receipt of the proceeds of
hazard or casualty insurance (other than rental or business interruption
insurance), (v) the repayment of principal on any loans made by the Partnership
or any entity

 

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through which the Partnership holds a direct or indirect real estate interest,
(vi) releases of Partnership reserves funded from previous transactions of a
nature described above, (vii) any transaction in which the Partnership acquires
an interest in the Advisor or (viii) any merger, sale or other transaction in
which shareholders of the General Partner receive consideration for their shares
in the General Partner (other than a dividend from the General Partner).

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

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

“Cause” means, with respect to termination of the Advisory Agreement, (i) fraud,
criminal conduct, willful misconduct or willful or negligent breach of fiduciary
duty by the Advisor, (ii) a material breach of the Advisory Agreement by the
Advisor which remains uncured after 30 days’ written notice, (iii) the
Bankruptcy or insolvency of the Advisor, CB Richard Ellis Investors L.L.C.
and/or CB Richard Ellis Group, Inc. (collectively the “Sponsor Entities”), or
(iv) there is a dissolution of any of the Sponsor Entities.

“Certificate” means the Certificate of Limited Partnership relating to the
Partnership filed in the office of the Delaware Secretary of State on March 30,
2004, as amended from time to time in accordance with the terms hereof and the
Act.

“Class A Interest” means the Partnership Interest represented by Class A Units
issued pursuant to Section 4.02.B.

“Class A Unit” means Class A Units of the Partnership representing a portion of
the Class A Interest.

“Class B Interest” means the profits interest issued pursuant to Section 4.02.D.

“Class B Partner” means the Partner that holds the Class B Interest.

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

“Consent” means the consent or approval of a proposed action by a Partner given
in accordance with Section 14.02 hereof.

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

 

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“Conversion Factor” means 1.0; provided that in the event that the General
Partner (i) declares or pays a dividend on its outstanding Shares in Shares or
makes a distribution to all holders of its outstanding Shares in Shares,
(ii) subdivides its outstanding Shares or (iii) combines its outstanding Shares
into a smaller number of Shares, the Conversion Factor shall be adjusted by
multiplying the Conversion Factor by a fraction, the numerator of which shall be
the number of Shares issued and outstanding on the record date for such
dividend, distribution, subdivision or combination (assuming for such purposes
that such dividend, distribution, subdivision or combination has occurred as of
such time) and the denominator of which shall be the actual number of Shares
(determined without the above assumption) issued and outstanding on the record
date for such dividend, distribution, subdivision or combination; and provided,
further, that in the event that an entity shall cease to be the General Partner
(the “Predecessor Entity”) and another entity shall become the General Partner
(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 time immediately prior to
when the Successor Entity becomes the General Partner, 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, in the
event that any stockholders of the Predecessor Entity will receive consideration
in connection with the transaction in which the Successor Entity becomes the
General Partner, 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 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 such 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 in order to avoid unintended dilution or
anti-dilution as a result of transactions in which Shares are issued, redeemed
or exchanged without a corresponding issuance, redemption or exchange of
Partnership Units and (y) if a Specified Redemption Date shall fall between the
record date and the effective date of any event of the type described above,
that the Conversion Factor applicable to such redemption shall be adjusted to
take into account such event.

“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.

“Declaration of Trust” means the second amended and restated declaration of
trust or other organizational document governing the General Partner, as amended
or restated from time to time.

“Deemed Partnership Interest Value” means, as of any date with respect to any
class of Partnership Interests, the Deemed Value of the Partnership Interest of
such class multiplied by the applicable Partner’s Percentage Interest of such
class.

“Deemed Value of the Partnership Interest” means, as of any date with respect to
any class of Partnership Interest other than the Class B Interest, (a) if the
shares of common beneficial interest (or other comparable equity interests) of
the General Partner are Publicly Traded (i) the total number of

 

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shares of common beneficial interest (or other comparable equity interest) of
the General Partner corresponding to Class A Units (as provided for in
Section 4.02.B hereof) issued and outstanding as of the close of business on
such date (excluding any treasury shares) multiplied by the Value of a share of
such common beneficial interest (or other comparable equity interest) on such
date divided by (ii) the Percentage Interest of the General Partner of the
Class A Units on such date, and (b) otherwise, the aggregate Value of such class
of Partnership Interests determined as set forth in the fourth and fifth
sentences of the definition of Value.

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

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

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

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

“General Partner” means CB Richard Ellis Realty Trust, a Maryland real estate
investment trust, or its successors as general partner of the Partnership.

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

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

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

 

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(f) any proceeding seeking liquidation, reorganization or other relief under any
bankruptcy, insolvency or other similar law now or hereafter in effect has not
been dismissed within one hundred twenty (120) days after the commencement
thereof, (g) the appointment without the Partner’s consent or acquiescence of a
trustee, receiver or liquidator has not been vacated or stayed within ninety
(90) days of such appointment or (h) an appointment referred to in clause (g) is
not vacated within ninety (90) days after the expiration of any such stay.

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

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

“Limited Partner” means any Person named as a Limited Partner in Exhibit A
attached hereto, as such Exhibit may be amended and restated from time to time,
or any Substituted Limited Partner or Additional Limited Partner, in such
Person’s capacity as a Limited Partner in the Partnership.

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

“Liquidating Event” has the meaning set forth in Section 13.01 hereof.

“Liquidator” has the meaning set forth in Section 13.02.A hereof.

“Listing Distribution” has the meaning set forth in Section 5.01.B(iii) hereof.

“Net Income” means, for any taxable period, the excess, if any, of the
Partnership’s items of income and gain for such taxable period over the
Partnership’s items of loss and deduction for such taxable period. The items
included in the calculation of Net Income shall be determined in accordance with
Exhibit B hereto. 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 hereto, Net Income or the resulting Net Loss,
whichever the case may be, shall be recomputed without regard to such item.

“Net Loss” means, for any taxable period, the excess, if any, of the
Partnership’s items of loss and deduction for such taxable period over the
Partnership’s items of income and gain for such taxable period. The items
included in the calculation of Net Loss shall be determined in accordance with
Exhibit B. If an item of income, gain, loss or deduction that has been included
in the initial computation of Net Loss is subjected to the special allocation
rules in Exhibit C hereto, 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 of
common beneficial interest (or other comparable equity interest) of the General
Partner, excluding grants under any Stock Option Plan, or (ii) any Debt issued
by the General Partner that provides any of the rights described in clause (i).

 

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

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

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

“Obligated Partner” means a Partner who has agreed in writing to be an Obligated
Partner and has agreed and is obligated to make certain contributions, not in
excess of such Obligated Partner’s Protected Amount, to the Partnership with
respect to such Partner’s Capital Account Deficit upon the occurrence of certain
events.

“Operating Cash Flow” means, with respect to any applicable period, the gross
receipts of the Partnership during such period plus any reductions in reserves
(other than reserves funded from proceeds of a Capital Transaction) occurring
during such period, less (i) operating expenses actually paid during such period
including without limitation taxes, insurance premiums, repair and maintenance
costs and management fees, (ii) interest and principal paid during such period
of indebtedness of the Partnership, (iii) additions to reserves made during such
periods and (iv) expenditures for capital improvements and other capital items
paid during such periods; provided, however, that Operating Cash Flow shall not
include any receipts expenses or other charges that are taken into account in
determining Capital Proceeds.

“Original Limited Partnership Agreement” has the meaning set forth in the
preamble of this Agreement.

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

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

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

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

“Partnership” means CBRE Operating Partnership, L.P., the limited partnership
formed under the Act and continued upon the terms and conditions set forth in
this Agreement, and any successor thereto.

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

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

 

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“Partnership Record Date” means the record date established by the General
Partner either (i) for distributions pursuant to Section 5.01 hereof, or (ii) if
applicable, for determining the Partners entitled to vote on or consent to any
proposed action for which the consent or approval of the Partners is sought
pursuant to Section 14.02 hereof.

“Partnership Unit” means a fractional, undivided share of any Partnership
Interests expressed as Units and issued pursuant to Sections 4.01 and 4.02
hereof, and includes Class A Units and any other classes or series of
Partnership Units established after the date hereof. The number of Partnership
Units outstanding and the Percentage Interests represented by such Partnership
Units are set forth in Exhibit A hereto, as such Exhibit may be amended and
restated from time to time. The ownership of Partnership Units may be evidenced
by a certificate in a form approved by the General Partner.

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

“Percentage Interest” means, as to a Partner holding a class of Partnership
Interests, its interest in such class, determined by dividing the Partnership
Units of such class owned by such Partner by the total number of Partnership
Units of such class then outstanding as specified in Exhibit A attached hereto,
as such Exhibit may be amended and restated from time to time, multiplied by the
aggregate Percentage Interest allocable to such class of Partnership Interests.

“Person” means an individual, corporation, partnership, limited liability
company, estate, trust (including a trust qualified under Sections 401(a) or
501(c)(17) of the Code), a portion of a trust permanently set aside for or to be
used exclusively for the purposes described in Section 642(c) of the Code,
association, private foundation within the meaning of Section 509(a) of the
Code, joint stock company or other entity and also includes a group as that term
is used for purposes of Section 13(d)(3) of the Securities Exchange Act of 1934,
as amended.

“Protected Amount” means the amount, if any, specified on Exhibit B, with
respect to any Obligated Partner, as such Exhibit may be amended from time to
time.

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

“Recapture Income” means any gain recognized by the Partnership (computed
without regard to any adjustment required by Section 743 of the Code) upon the
disposition of any property or asset of the Partnership, which gain is
characterized as ordinary income because it represents the recapture of
deductions previously taken with respect to such property or asset.

“Redeeming Partner” has the meaning set forth in Section 8.06.A hereof.

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

 

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“Redemption Right” has the meaning set forth in Section 8.06.A hereof.

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

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

“REIT Requirements” has the meaning set forth in Section 5.01.A hereof.

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

“Safe Harbors” has the meaning set forth in Section 11.06.F hereof.

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

“Share” means a share of common beneficial interest (or other comparable equity
interest) of the General Partner. Shares may be issued in one or more classes or
series in accordance with the terms of the Declaration of Trust. In the event
that 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 correspond to the class or series of Partnership Interests for which the
reference to Shares is made. When used with reference to Class A Units, the term
“Shares” refers to shares of common beneficial interest (or other comparable
equity interest) of the General Partner.

“Shares Amount” means a number of Shares equal to the product of the number of
Class A Units offered for redemption by a Redeeming Partner times the Conversion
Factor; provided that, in the event the General Partner issues to all holders of
Shares 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 for
any Class A Units outstanding prior to the issuance of such rights shall also
include such rights that a holder of that number of Shares would be entitled to
receive; and provided, further that, the Shares Amount shall be adjusted
pursuant to Section 7.05 hereof in the event that the General Partner acquires
Specially Distributed Assets.

“Specially Distributed Assets” has the meaning set forth in Section 7.05.A
hereof.

“Specified Redemption Date” means the tenth Business Day after receipt by the
General Partner of a Notice of Redemption; provided that, if the Shares are not
Publicly Traded, the Specified Redemption Date means the thirtieth Business Day
after receipt by the General Partner of a Notice of Redemption.

“Stock Option Plan” means any stock incentive plan of the General Partner, the
Partnership or any Affiliate of the Partnership or the General Partner.

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

“Substituted Limited Partner” means a Person who is admitted as a Limited
Partner to the Partnership pursuant to Section 11.04 hereof.

 

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

“Terminating Capital Transaction” means any sale or other disposition of all or
substantially all of the assets of the Partnership for cash or a related series
of transactions that, taken together, result in the sale or other disposition of
all or substantially all of the assets of the Partnership for cash.

“Termination Date” means the date of termination of the Advisory Agreement.

“Termination Transaction” has the meaning set forth in Section 11.02.B hereof.

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

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

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

“Value” means, with respect to any outstanding Shares of the General Partner
that are Publicly Traded, the average of the daily market price for the ten
(10) consecutive trading days immediately preceding the date with respect to
which value must be determined or, if such date is not a Business Day, the
immediately preceding Business Day. 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.
In the event that the outstanding Shares of the General Partner are Publicly
Traded and the Shares Amount includes rights that a holder of Shares would be
entitled to receive, then the Value of such rights shall be determined by the
General Partner acting in good faith on the basis of such quotations and other
information as it considers, in its reasonable judgment, appropriate. In the
event that the Shares of the General Partner are not Publicly Traded, the Value
of the Shares Amount per Partnership Unit offered for redemption (which will be
the Cash Amount per Partnership Unit offered for redemption payable pursuant to
Section 8.06 hereof) means the amount that a holder of one Partnership Unit
would receive if each of the assets of the Partnership were to be sold for its
fair market value on the Specified Redemption Date, the Partnership were to pay
all of its outstanding liabilities, and the remaining proceeds were to be
distributed to the Partners in accordance with the terms of this Agreement. Such
Value shall be determined by the General Partner, acting in good faith and based
upon a commercially reasonable estimate of the amount that would be realized by
the Partnership if each asset of the Partnership (and each asset of each
Partnership, limited liability company, joint venture or other entity in which
the Partnership owns a direct or indirect interest) were sold to an unrelated
purchaser in an arms’ length transaction where neither the purchaser nor the
seller were under economic compulsion to enter into the transaction (without
regard to any discount in value as a result of the Partnership’s minority
interest in any property or any illiquidity of the Partnership’s interest in any
property). In connection with determining the Deemed Value of the Partnership
Interest for purposes of determining the number of additional Partnership Units
issuable upon a Capital Contribution funded by an underwritten public offering
of shares of common beneficial interest (or other comparable equity interest) of
the General Partner, the Value of such shares shall be the public offering price
per share of such class of the common beneficial interest (or other comparable
equity interest) sold.

 

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

ARTICLE II

ORGANIZATIONAL MATTERS

Section 2.01. Organization

The Partnership is a limited partnership organized pursuant to the provisions of
the Act and upon the terms and conditions set forth in the Agreement. Except as
expressly provided herein to the contrary, the rights and obligations of the
Partners and the administration and termination of the Partnership shall be
governed by the Act. The Partnership Interest of each Partner shall be personal
property for all purposes.

Section 2.02. Name

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

Section 2.03. Registered Office and Agent; Principal Office

The address of the registered office of the Partnership in the State of Delaware
shall be located at 2711 Centerville Road, Suite 400, Wilmington, Delaware 19808
and the registered agent for service of process on the Partnership in the State
of Delaware at such registered office shall be Corporation Service Company. The
principal office of the Partnership shall be 515 South Flower Street,
Suite 3100, Los Angeles, California 90071 or such other place as the General
Partner may from time to time designate by notice to the Limited Partners. The
Partnership may maintain offices at such other place or places within or outside
the State of Delaware as the General Partner deems advisable.

Section 2.04. Term

The term of the Partnership commenced on March 30, 2004, the date on which the
Certificate was filed in the office of the Secretary of State of the State of
Delaware in accordance with the Act, and shall continue until it is dissolved
sooner pursuant to the provisions of Article XIII hereof or as otherwise
provided by law.

 

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ARTICLE III

PURPOSE

Section 3.01. Purpose and Business

The purpose and nature of the business to be conducted by the Partnership is
(i) to conduct any business that may be lawfully conducted by a limited
partnership organized pursuant to the Act; provided, however, that such business
shall be limited to and conducted in such a manner as to permit the General
Partner at all times to be classified as a REIT, unless the General Partner
ceases to qualify or is not qualified as a REIT for any reason or reasons not
related to the business conducted by the Partnership; (ii) to enter into any
partnership, joint venture, 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. In connection
with the foregoing, the Partners acknowledge that the status of the General
Partner as a REIT inures to the benefit of all the Partners and not solely the
General Partner or its Affiliates.

Section 3.02. Powers

The Partnership is empowered to do any and all acts and things necessary,
appropriate, proper, advisable, incidental to or convenient for the furtherance
and accomplishment of the purposes and business described herein and for the
protection and benefit of the Partnership, including, without limitation, full
power and authority, directly or through its ownership interest in other
entities, to enter into, perform and carry out contracts of any kind, borrow
money and issue evidences of indebtedness whether or not secured by mortgage,
deed of trust, pledge or other lien, acquire, own, manage, improve and develop
real property, and lease, sell, transfer and dispose of real property; provided,
however, that the Partnership shall not take, or refrain from taking, any action
which, in the judgment of the General Partner, in its sole and absolute
discretion, (i) could adversely affect the ability of the General Partner to
continue to qualify as a REIT, (ii) could subject the General Partner to any
additional 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 General Partner or its securities, unless such action (or
inaction) shall have been specifically consented to by the General Partner in
writing.

Section 3.03. Partnership Only for Purposes Specified

The Partnership shall be a partnership only for the purposes specified in
Section 3.01 above, and this Agreement shall not be deemed to create a
partnership among the Partners with respect to any activities whatsoever other
than the activities within the purposes of the Partnership as specified in
Section 3.01 above.

ARTICLE IV

CAPITAL CONTRIBUTIONS AND ISSUANCES

OF PARTNERSHIP INTERESTS

Section 4.01. Capital Contributions of the Partners

A. Capital Contributions. On July 1, 2004, certain Partners made Capital
Contributions to the Partnership. In connection with the General Partner’s
initial public offering of common shares and as reflected in the Amended and
Restated Agreement of Limited Partnership, CBRE REIT Holdings LLC exchanged the
Class C Interest (as defined in the Original Agreement of Limited Partnership)
for a number of Class A Units set forth on Exhibit A hereto. Exhibit A hereto
reflects the Capital Contributions made by each Partner, the Class A Units
assigned to each Partner and the Percentage Interest in the Partnership
represented by such Class A Units. The Capital Accounts of the Partners and the
Carrying Values of the Partnership’s Assets have been and will continue to be
determined pursuant to Section I.D. of Exhibit B hereto to reflect the Capital
Contributions made.

 

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B. General Partnership Interest. A number of Partnership Units held by the
General Partner equal to one percent (1%) of all outstanding Class A Units shall
be deemed to be the General Partnership Interest. All other Partnership Units
held by the General Partner shall be deemed to be Limited Partnership Interests
and shall be held by the General Partner in its capacity as a Limited Partner in
the Partnership.

C. Capital Contributions By Merger. To the extent the Partnership acquires any
property by the merger of any other Person into the Partnership, Persons who
receive Partnership Interests in exchange for their interests in the Person
merging into the Partnership shall become Partners and shall be deemed to have
made Capital Contributions as provided in the applicable merger agreement and as
set forth in Exhibit A hereto.

D. No Obligation to Make Additional Capital Contributions. Except as provided in
Sections 7.05 and 10.05 hereof, the Partners shall have no obligation to make
any additional Capital Contributions or provide any additional funding to the
Partnership (whether in the form of loans, repayments of loans or otherwise). No
Partner shall have any obligation to restore any deficit that may exist in its
Capital Account, either upon a liquidation of the Partnership or otherwise,
except as provided in Section 13.02 hereof.

Section 4.02. Issuances of Partnership Interests

A. General. The General Partner is hereby authorized to cause the Partnership
from time to time to issue to Partners (including the General Partner and its
Affiliates) or other Persons (including, without limitation, in connection with
the contribution of property to the Partnership) Partnership Units or other
Partnership Interests in one or more classes, or in one or more series of any of
such classes, with such designations, preferences and relative, participating,
optional or other special rights, powers and duties, all as shall be determined,
subject to applicable Delaware law, by the General Partner in its sole and
absolute discretion, including, without limitation, (i) the allocations of items
of Partnership income, gain, loss, deduction and credit to each such class or
series of Partnership Interests, (ii) the right of each such class or series of
Partnership Interests to share in Partnership distributions and (iii) the rights
of each such class or series of Partnership Interests upon dissolution and
liquidation of the Partnership; provided, that no such Partnership Units or
other Partnership Interests shall be issued to the General Partner unless either
(a) the Partnership Interests are issued in connection with the grant, award or
issuance of Shares or other equity interests in the General Partner having
designations, preferences and other rights such that the economic interests
attributable to such Shares or other equity interests are substantially similar
to the designations, preferences and other rights (except voting rights) of the
additional Partnership Interests issued to the General Partner in accordance
with this Section 4.02.A or (b) the Partnership Interests are issued to all
Partners holding Partnership Interests in the same class in proportion to their
respective Percentage Interests in such class. In the event that the Partnership
issues Partnership Interests pursuant to this Section 4.02.A, the General
Partner shall make such revisions to this Agreement (including but not limited
to the revisions described in Section 5.04, Section 6.02 and Section 8.06
hereof) as it deems necessary to reflect the issuance of such additional
Partnership Interests.

B. Percentage Interest Adjustments in the Case of Capital Contributions for
Class A Units. Upon the acceptance of additional Capital Contributions in
exchange for Class A Units, the Percentage Interest related thereto shall be
equal to the product of (1) a fraction, the numerator of which is equal to the
amount of cash, if any, plus the Agreed Value of Contributed Property, if any,
contributed with respect to such additional Partnership Units and the
denominator of which is equal to the sum of (i) the Deemed Value of the
Partnership Interests for all outstanding Class A Units (computed as of the
Business Day immediately preceding the date on which the additional Capital
Contributions are made (an “Adjustment Date”)) plus (ii) the aggregate amount of
additional Capital Contributions contributed to the

 

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Partnership on such Adjustment Date in respect of such additional Class A Units
and (2) the Percentage Interest attributable to the Class A Interest as provided
in Exhibit A hereto. The Percentage Interest of each other Partner holding
Class A Units not making a full pro rata Capital Contribution shall be adjusted
to the product of (1) a fraction the numerator of which is equal to the sum of
(i) the Deemed Partnership Interest Value of such Limited Partner (computed as
of the Business Day immediately preceding the Adjustment Date) plus (ii) the
amount of additional Capital Contributions (such amount being equal to the
amount of cash, if any, plus the Agreed Value of Contributed Property, if any,
so contributed), if any, made by such Partner to the Partnership in respect of
such Class A Units as of such Adjustment Date and the denominator of which is
equal to the sum of (i) the Deemed Value of the outstanding Class A Units
(computed as of the Business Day immediately preceding such Adjustment Date)
plus (ii) the aggregate amount of the additional Capital Contributions
contributed to the Partnership on such Adjustment Date in respect of such
additional Class A Units and (2) the Percentage Interest attributable to the
Class A Interest as provided in Exhibit A hereto. For purposes of calculating a
Partner’s Percentage Interest of Class A Units pursuant to this Section 4.02.B,
(a) cash Capital Contributions by the General Partner will be deemed to equal
the cash contributed by the General Partner plus (1) in the case of cash
contributions funded by an offering of any equity interests in or other
securities of the General Partner, the offering costs attributable to the cash
contributed to the Partnership, and (2) in the case of Class A Units issued
pursuant to Section 7.05.E hereof, an amount equal to the difference between the
Value of the Shares sold pursuant to any Stock Option Plan and the net proceeds
of such sale.

C. Classes of Partnership Interests. From and after the date hereof, subject to
Section 4.02.A above, the Partnership shall have two classes of Partnership
Interests, entitled the “Class A Interest,” (represented by Class A Units) and
the “Class B Interest.” Class A Units or new classes of Partnership Interests
may be issued to newly admitted Partners in exchange for the contribution by
such Partners of cash, real estate partnership interests, stock, notes or other
assets or consideration.

D. The Class B Interest. On July 1, 2004, the General Partner issued the Class B
Interest to an Affiliate of the Advisor in exchange for services performed or to
be performed for the Partnership and its Subsidiaries, and admitted such Person
as a Limited Partner. The Class B Partner is entitled to certain distributions
as provided in Section 5.01.B and certain preferential allocations of items of
income and gain under Section 6.01.D. The Class B Interest is subject to the
transfer restrictions set forth in Article XI and is subject to redemption
pursuant to Section 8.07.

Section 4.03. No Preemptive Rights

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

Section 4.04. Other Contribution Provisions

In the event that any Partner other than the Class B Partner is admitted to the
Partnership and is given a Capital Account in exchange for services rendered to
the Partnership, such transaction shall be treated by the Partnership and the
affected Partner as if the Partnership had compensated such Partner in cash, and
the Partner had contributed such cash to the capital of the Partnership. In
addition, with the consent of the General Partner, one or more Limited Partners
may enter into contribution agreements with the Partnership which have the
effect of providing a guarantee of certain obligations of the Partnership.

 

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Section 4.05. No Interest on Capital

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

ARTICLE V

DISTRIBUTIONS

Section 5.01. Requirement and Characterization of Distributions

A. General. Except as otherwise provided herein, the General Partner shall make
distributions at such times and in such amounts as it may determine. Such
distributions shall be made to the Partners who are Partners on the Partnership
Record Date for such distribution. Notwithstanding anything to the contrary
contained herein, in no event may a Partner receive a distribution with respect
to a Class A Unit for a quarter or shorter period if such Partner is entitled to
receive a distribution relating to such period with respect to a Share for which
such Class A Unit has been redeemed or exchanged. Unless otherwise expressly
provided for herein or in an agreement at the time a new class of Partnership
Interests is created in accordance with Article IV hereof, no Partnership
Interest shall be entitled to a distribution in preference to any other
Partnership Interest. The General Partner shall make such reasonable efforts, as
determined by it in its sole and absolute discretion and consistent with the
qualification of the General Partner as a REIT, to make distributions (a) to
Limited Partners so as to preclude any such distribution or portion thereof from
being treated as part of a sale of property by a Limited Partner under
Section 707 Code or the Regulations thereunder; provided that, the General
Partner and the Partnership shall not have liability to a Limited Partner under
any circumstances as a result of any distribution to a Limited Partner being so
treated, and (b) to the General Partner in an amount sufficient to enable the
General Partner to pay stockholder dividends that will (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
for the General Partner.

B. Method.

(i) Each holder of Partnership Interests shall be entitled to a distribution in
accordance with the rights of any such class of Partnership Interests, including
any preference in distribution. All distributions within a class of Partnership
Interests shall be pro rata in proportion to the respective Percentage Interests
of the holders of such Partnership Interests on such Partnership Record Date.
All distributions of Operating Cash Flow will be made pro rata among the holders
of the Class A Interest in accordance with their respective Percentage
Interests.

(ii) All distributions of Capital Proceeds, and distributions upon a winding up
or liquidation of the Partnership pursuant to Section 13.02 hereto or a
Terminating Capital Transaction, shall be made: (A) first, 100% to the holders
of the Class A Interest in accordance with their respective Percentage Interests
on the Partnership Record Date until the General Partner has received cumulative
distributions under Section 5.01.B(i) and this Section 5.01.B(ii) equal to the
aggregate Capital Contributions made by the holders of the Class A Interest to
the Partnership plus a cumulative, uncompounded return thereon of 7% per annum,
determined by taking into account the dates on which all such Capital
Contributions and distributions were made and (B) second, (1) 85% to the holders
of the Class A Interest, in accordance with their respective Percentage
Interests on the Partnership Record Date, and (2) 15% to the Class B Partner on
the Partnership Record Date. No distributions shall be made pursuant to this
Section 5.01.B(ii) to the Class B Partner if the Shares become Publicly Traded.

 

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(iii) In the event that the Shares become Publicly Traded, the Class B Partner
will be entitled to receive the amount that would have been distributed to the
Class B Partner as described in Section 5.01.B(ii) if the Partnership had
distributed to the Partners upon liquidation an amount (the “Listing
Distribution”) equal to the market value of the General Partner’s listed Shares
based upon the average closing price, or the average of the bid and asked
prices, as the case may be, during a period of thirty (30) days during which
such Shares are traded beginning 150 days after the Shares become Publicly
Traded. The Listing Distribution shall be reduced by any previous distributions
made to the Class B Partner by the Partnership pursuant to Section 5.01.B(ii).
The Listing Distribution shall be paid within 10 Business Days of the
determination of the market value of the General Partner’s listed Shares as
described above. The Listing Distribution shall be paid, as determined by the
General Partner’s board of trustees, including a majority of the independent
trustees, either in the form of cash or Shares or through a promissory note. In
the event that the Listing Distribution is satisfied through a promissory note,
the terms and conditions of any such promissory note shall be determined by the
General Partner’s board of trustees, including a majority of the independent
trustees. The Class B Interest shall be redeemed upon the payment to the Class B
Partner of the Listing Distribution.

Section 5.02. Amounts Withheld

All amounts withheld pursuant to the Code or any provisions of any state or
local tax law and Section 10.05 hereof with respect to any allocation, payment
or distribution to the General Partner, the Limited Partners or Assignees shall
be treated as amounts distributed to the General Partner, Limited Partners or
Assignees pursuant to Section 5.01 above for all purposes under this Agreement.

Section 5.03. Distributions Upon Liquidation

Proceeds from a Terminating Capital Transaction shall be distributed to the
Partners in accordance with Section 13.02 hereof.

Section 5.04. Revisions to Reflect Issuance of Additional Partnership Interests

In the event that the Partnership issues additional Partnership Interests to the
General Partner or any Additional Limited Partner pursuant to Article IV hereof,
the General Partner shall make such revisions to this Article V as it deems
necessary to reflect the issuance of such additional Partnership Interests.
Subject to Section 8.08, such revisions shall not require the consent or
approval of any other Partner.

ARTICLE VI

ALLOCATIONS

Section 6.01. Allocations For Capital Account Purposes

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

A. Allocations of Net Income. Except as otherwise provided herein, Net Income
for any Partnership Year or other applicable period shall be allocated in the
following order and priority:

(i) First, to the General Partner to the extent the cumulative Net Loss
allocated to the General Partner pursuant to subparagraph (B)(v) below exceeds
the cumulative Net Income allocated to the General Partner pursuant to this
subparagraph (A)(i);

 

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(ii) Second, to each Obligated Partner until the cumulative Net Income allocated
to such Obligated Partner pursuant to this subparagraph (A)(ii) equals the
cumulative Net Loss allocated to such Obligated Partner under
subparagraph (B)(iv) below (and, among the Obligated Partners, pro rata in
proportion to their respective percentages of the cumulative Net Loss allocated
to all Obligated Partners pursuant to subparagraph (B)(iv) below);

(iii) Third, to the General Partner until the cumulative Net Income allocated to
the General Partner pursuant to this subparagraph (A)(iii) equals the cumulative
Net Loss allocated to the General Partner pursuant to subparagraph (B)(iii)
below;

(iv) Fourth, to the holders of any Partnership Interests that are entitled to
any preference upon liquidation until the cumulative Net Income allocated under
this subparagraph (iv) equals the cumulative Net Loss allocated to such Partners
under subparagraph (B)(ii);

(v) Fifth, to the holders of any Partnership Interest that is entitled to any
preference in distribution in accordance with the rights of any other class of
Partnership Interests until each such Partnership Interest has been allocated,
on a cumulative basis pursuant to this subparagraph (A)(v), Net Income equal to
the amount of distributions received which are attributable to such preference
with respect to such class of Partnership Interest (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 made);

(vi) Thereafter, with respect to Partnership Interests (other than the Class B
Interest) 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 their Percentage
Interests (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. Allocations of Net Loss. Except as otherwise provided herein, Net Loss for
any Partnership Year or other applicable period shall be allocated in the
following order and priority:

(i) First, with respect to classes of Partnership Interests that are not
entitled to any preference in distribution or with respect to which
distributions are not limited to any preference in distribution (other than the
Class B Interest), pro rata to each such class in accordance with their
Percentage Interests (and within such class, pro rata in proportion to the
respective Percentage Interests as of the last day of the period for which such
allocation is being made); provided that Net Loss shall not be allocated to any
Partner pursuant to this subparagraph (B)(i) to the extent that such allocation
would cause such Partner to have an Adjusted Capital Account Deficit (or
increase any existing Adjusted Capital Account Deficit) (determined in each case
(i) by not including in the Partners’ Adjusted Capital Accounts any amount that
a Partner is obligated to contribute to the Partnership with respect to any
deficit in its Capital Account pursuant to Section 13.02, and (ii) in the case
of a Partner who also holds classes of Partnership Units that are entitled to
any preferences upon liquidation, by subtracting from such Partners’ Adjusted
Capital Account the amount of such preferred distribution to be made upon
liquidation) at the end of such Partnership Year or other applicable period;

(ii) Second, with respect to the classes of Partnership Interests that are
entitled to any preference 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

 

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which such allocation is being made; provided that Net Loss shall not be
allocated to any Partner pursuant to this subparagraph (B)(ii) to the extent
that such allocation would cause such Partner to have an Adjusted Capital
Account Deficit (or increase any existing Adjusted Capital Account Deficit)
(determined in each case by not including in the Partners’ Adjusted Capital
Accounts any amount that a Partner is obligated to contribute to the Partnership
with respect to any deficit in its Capital Account pursuant to Section 13.02) at
the end of such Partnership Year or other applicable period;

(iii) Third, to the General Partner in an amount equal to the excess of (a) the
amount of the Partnership Recourse Liabilities over (b) the aggregate Protected
Amounts of all Obligated Partners;

(iv) Fourth, to and among the Obligated Partners, in proportion to their
respective Protected Amounts, until such time as the Obligated Partners as a
group have been allocated cumulative Net Loss pursuant to this
subparagraph (B)(iv) equal to the Aggregate Protected Amount of all Obligated
Partners; and

(v) Thereafter, to the General Partner.

C. Priority Allocations to the Class B Partner. (i) Notwithstanding the
provisions of Sections 6.01.A and 6.01.B above, the Class B Partner shall be
allocated on a priority basis Net Income (or items thereof), including, without
limitation, items of Net Income from a Capital Transaction (including but not
limited to net capital gain realized in connection with the adjustment to the
Carrying Value of Partnership assets under Section 704(b) of the Code, including
upon the redemption of the Class B Interest for the Advisor Redemption Interest)
on a cumulative basis pursuant to this Section 6.01.C in an amount equal to the
amount of distributions made (or in connection with a Capital Transaction or
winding up or liquidation of the Partnership pursuant to Section 13.02, to be
made) to such Partner.

(ii) Any Net Loss pursuant to a Capital Transaction that is associated with an
actual sale of an asset in respect of which there is attributable an Advisor
Redemption Interest shall be allocated to the holder of the Advisor Redemption
Interest to the extent that such Net Loss would reduce the aggregate amount
otherwise distributable to the holder of the Advisor Redemption Interest
compared to the amount which would have been distributable to such holder at the
time the Class B Interest was redeemed pursuant to Section 8.07.

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

Section 6.02. Revisions to Allocations to Reflect Issuance of Additional
Partnership Interests

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

 

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ARTICLE VII

MANAGEMENT AND OPERATIONS OF BUSINESS

Section 7.01. Management

A. Powers of General Partner. Except as otherwise expressly provided in this
Agreement, all management powers over the business and affairs of the
Partnership are and shall be exclusively vested in the General Partner, and no
Limited Partner shall have any right to participate in or exercise control or
management power over the business and affairs of the Partnership. The General
Partner may not be removed by the Limited Partners. In addition to the powers
now or hereafter granted a general partner of a limited partnership under
applicable law or which are granted to the General Partner under any other
provision of this Agreement, the General Partner, subject to Sections 7.06 and
7.11 below, shall have full power and authority to do all things deemed
necessary or desirable by it to conduct the business of the Partnership, to
exercise all powers set forth in Section 3.02 hereof and to effectuate the
purposes set forth in Section 3.01 hereof, including, without limitation:

(1) the making of any expenditures, the lending or borrowing of money or will
permit the General Partner (as long as the General Partner qualifies as a REIT)
to avoid the payment of any federal income tax (including, for this purpose, any
excise tax pursuant to Section 4981 of the Code) and to make distributions to
its stockholders sufficient to permit the General Partner to maintain REIT
status, the assumption or guarantee of, or other contracting for, indebtedness
and other liabilities, the issuance of evidences of indebtedness (including the
securing of same by mortgage, deed of trust or other lien or encumbrance on the
Partnership’s assets) and the incurring of any obligations the General Partner
deems necessary for the conduct of the activities of the Partnership;

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

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

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

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

 

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(6) the mortgage, pledge, encumbrance or hypothecation of any assets of the
Partnership, and the use of the assets of the Partnership (including, without
limitation, cash on hand) for any purpose consistent with the terms of this
Agreement and on any terms it sees fit, including, without limitation, the
financing of the conduct or the operations of the General Partners or the
Partnership, the lending of funds to other Persons (including, without
limitation, any Subsidiaries of the Partnership) and the repayment of
obligations of the Partnership, any of its Subsidiaries and any other Person in
which it has an equity investment;

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

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

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

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

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

(12) the formation of, or acquisition of an interest (including non-voting
interests in entities controlled by Affiliates of the Partnership or third
parties) in, and the contribution of property to, any further limited or general
partnerships, joint ventures, limited liability companies or other relationships
that it deems desirable (including, without limitation, the acquisition of
interests in, and the contributions of funds or property, or the 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 obligations of such Persons); provided that, as long
as the General Partner has determined to qualify as a REIT, the Partnership may
not engage in any such formation, acquisition or contribution that would cause
the General Partner to fail to qualify as a REIT);

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

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

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

 

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

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

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

(19) the distribution of cash to acquire Partnership Units held by a Limited
Partner in connection with a Limited Partner’s exercise of its Redemption Right
under Section 8.06 hereof; and

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

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

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

D. Working Capital and Other Reserves. At all times from and after the date
hereof, the General Partner may cause the Partnership to establish and maintain
working capital reserves in such amounts as the General Partner, in its sole and
absolute discretion, deems appropriate and reasonable from time to time,
including upon liquidation of the Partnership pursuant to Section 13.02 hereof.

E. No Obligations to Consider Tax Consequences of Limited Partners.

In exercising its authority under this Agreement, the General Partner may, but
shall be under no obligation to, take into account the tax consequences to any
Partner (including the General Partner) of any

 

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action taken (or not taken) by it. The General Partner and the Partnership shall
not have liability to a Limited Partner for monetary damages or otherwise for
losses sustained, liabilities incurred or benefits not derived by such Limited
Partner in connection with such decisions, provided that the General Partner has
acted in good faith and pursuant to its authority under this Agreement.

Section 7.02. Certificate of Limited Partnership

The General Partner has previously filed the Certificate with the Secretary of
State of Delaware. To the extent that such action is determined by the General
Partner to be reasonable and necessary or appropriate, the General Partner shall
file amendments to and restatements of the Certificate and do all the things to
maintain the Partnership as a limited partnership (or a partnership in which the
limited partners have limited liability) under the laws of the State of Delaware
and each other state, the District of Columbia or other jurisdiction in which
the Partnership may elect to do business or own property. Subject to the terms
of Section 8.05.A(4) hereof, the General Partner shall not be required, before
or after filing, to deliver or mail a copy of the Certificate or any amendment
thereto to any Limited Partner. The General Partner shall use all reasonable
efforts to cause to be filed such other certificates or documents as may be
reasonable and necessary or appropriate for the formation, continuation,
qualification and operation of a limited partnership (or a partnership in which
the limited partners have limited liability) in the State of Delaware and any
other state, the District of Columbia or other jurisdiction in which the
Partnership may elect to do business or own property.

Section 7.03. Title to Partnership Assets

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

Section 7.04. Reimbursement of the General Partner

A. No Compensation. Except as provided in this Section 7.04 and elsewhere in
this Agreement (including the provisions of Articles V and VI hereof regarding
distributions, payments and allocations to which it may be entitled), the
General Partner shall not be compensated for its services as general partner of
the Partnership.

B. Responsibility for Partnership Expenses. The Partnership shall be responsible
for and shall pay all expenses relating to the Partnership’s organization, the
ownership of its assets and its operations. The General Partner shall be
reimbursed on a monthly basis, or such other basis as the General Partner may
determine in its sole and absolute discretion, for all expenses it incurs
relating to the ownership and operation of, or for the benefit of, the
Partnership (including, without limitation, expenses related to the management
and administration of any Subsidiaries of the General Partner or the Partnership
or Affiliates of the Partnership such as auditing expenses and filing fees);
provided that, the amount of any such reimbursement shall be reduced by (i) any
interest earned by the General Partner with

 

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respect to bank accounts or other instruments or accounts held by it as
permitted in Section 7.05.A below and (ii) any amount derived by the General
Partner from any investments permitted in Section 7.05.A below. The General
Partner shall determine in good faith the amount of expenses incurred by it
related to the ownership and operation of, or for the benefit of, the
Partnership. In the event that certain expenses are incurred for the benefit of
the Partnership and other entities (including the General Partner), such
expenses will be allocated to the Partnership and such other entities in such a
manner as the General Partner in its sole and absolute discretion deems fair and
reasonable. Such reimbursements shall be in addition to any reimbursement to the
General Partner pursuant to Section 10.03.C hereof and as a result of
indemnification pursuant to Section 7.07 below. All payments and reimbursements
hereunder shall be characterized for federal income tax purposes as expenses of
the Partnership incurred on its behalf, and not as expenses of the General
Partner.

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

D. Purchases of Shares by the General Partner. In the event that the General
Partner exercises its rights under the Declaration of Trust to purchase Shares
or otherwise elects to purchase from its stockholders Shares in connection with
a stock repurchase or similar program or for the purpose of delivering such
Shares to satisfy an obligation under any dividend reinvestment or stock
purchase program adopted by the General Partner, any employee stock purchase
plan adopted by the General Partner or any similar obligation or arrangement
undertaken by the General Partner in the future, the purchase price paid by the
General Partner for such Shares and any other expenses incurred by the General
Partner in connection with such purchase shall be considered expenses of the
Partnership and shall be reimbursable to the General Partner.

E. Reimbursement not a Distribution. If and to the extent any reimbursement made
pursuant to this Section 7.04 is determined for federal income tax purposes not
to constitute a payment of expenses of the Partnership, the amount so determined
shall be treated as a distribution to the General Partner and there shall be a
corresponding special allocation of gross income to the General Partner, for
purposes of computing the Partners’ Capital Accounts.

Section 7.05. Outside Activities of the General Partner

A. General. Notwithstanding anything in this Agreement to the contrary, it is
expressly understood and agreed that the General Partner may, if it determines
such action to be in the best interests of the REIT or the Partnership, elect to
cause some or all of the assets of the Partnership (including cash expected to
be utilized to purchase assets that will be so held) to be distributed to and
held directly by the General Partner (the “Specially Distributed Assets”).
Concurrently with any such distribution, the General Partner shall (i) amend
Section 5.01 of this Agreement so as to provide that, from and after the date of
such distribution, each Partner other than the General Partner will receive the
same distributions that it would have received had the Specially Distributed
Assets been held by the Partnership rather than directly by the General Partner
(and a corresponding adjustment shall be made to the distributions to be made to
the General Partner); and (ii) make such further amendments to this Agreement
(including, without limitation, to the income and loss allocation provisions of
Section 6.01 hereof) as may be necessary or appropriate to effect the intention
of the parties that the Partners be placed, as nearly as possible, in the same
position they would have been in had such Specially Distributed Assets been held

 

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by the Partnership rather than directly by the General Partner; provided,
however, that the General Partner shall in no event be required to make
contributions to the Partnership to fund distributions to the other Partners.

B. Repurchase of Shares. In the event the General Partner exercises its rights
under the Declaration of Trust to purchase Shares or otherwise elects to
purchase from its stockholders Shares in connection with a stock repurchase or
similar program or for the purpose of delivering such shares to satisfy an
obligation under any dividend reinvestment or stock purchase program adopted by
the General Partner, any employee stock purchase plan adopted by the General
Partner or any similar obligation or arrangement undertaken by the General
Partner in the future, then the General Partner shall cause the Partnership to
purchase from the General Partner that number of Partnership Units of the
appropriate class equal to the product obtained by multiplying the number of
Shares purchased by the General Partner times a fraction, the numerator of which
is one and the denominator of which is the Conversion Factor, on the same terms
and for the same aggregate price that the General Partner purchased such Shares.

C. Forfeiture of Shares. In the event the Partnership or the General Partner
acquires Shares as a result of the forfeiture of such Shares under a restricted
or similar share plan, then the General Partner shall cause the Partnership to
cancel that number of Partnership Units of the appropriate class equal to the
number of Shares so acquired divided by the Conversion Factor, and, if the
Partnership acquired such Shares, it shall transfer such Shares to the General
Partner for cancellation.

D. Issuances of Shares. After the date hereof, the General Partner shall not
grant, award, or issue any additional Shares (other than Shares issued pursuant
to Section 8.06 hereof or pursuant to a dividend or distribution (including any
stock split) of Shares to all of its stockholders), other equity securities of
the General Partner or New Securities unless (i) the General Partner shall
cause, pursuant to Section 4.02.A hereof, the Partnership to issue to the
General Partner Partnership Interests or rights, options, warrants or securities
of the Partnership having designations, preferences and other rights, all such
that the economic interests are substantially the same as those of such
additional Shares, other equity securities or New Securities, as the case may
be, and (ii) the General Partner transfers to the Partnership, as an additional
Capital Contribution, the proceeds from the grant, award, or issuance of such
additional Shares, other equity securities or New Securities, as the case may
be, or from the exercise of rights contained in such additional Shares, other
equity securities or New Securities, as the case may be. Without limiting the
foregoing, the General Partner is expressly authorized to issue additional
Shares, other equity securities or New Securities, as the case maybe, for less
than fair market value, and the General Partner is expressly authorized,
pursuant to Section 4.02.A hereof, to cause the Partnership to issue to the
General Partner corresponding Partnership Interests, as long as (a) the General
Partner concludes in good faith that such issuance is in the interests of the
General Partner and the Partnership (for example, and not by way of limitation,
the issuance of Shares and corresponding Partnership Units pursuant to a stock
purchase plan providing for purchases of Shares, either by employees or
stockholders, at a discount from fair market value or pursuant to employee stock
options that have an exercise price that is less than the fair market value of
the Shares, either at the time of issuance or at the time of exercise) and
(b) the General Partner transfers all proceeds from any such issuance or
exercise to the Partnership as an additional Capital Contribution.

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

F. Funding Debt. The General Partner may incur a Funding Debt, including,
without limitation, a Funding Debt that is convertible into Shares or otherwise
constitutes a class of New

 

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Securities, subject to the condition that the General Partner lends to the
Partnership the net proceeds of such Funding Debt; provided, that the General
Partner shall not be obligated to lend the net proceeds of any Funding Debt to
the Partnership in a manner that would be inconsistent with the General
Partner’s ability to remain qualified as a REIT. If the General Partner enters
into any Funding Debt, the loan to the Partnership shall be on comparable terms
and conditions, including interest rate, repayment schedule and costs and
expenses, as are applicable with respect to or incurred in connection with such
Funding Debt.

Section 7.06. Transactions with Affiliates

A. Transactions with Certain Affiliates. Except as expressly permitted by this
Agreement (other than Section 7.01.A hereof which shall not be considered
authority for a transaction that otherwise would be prohibited by this
Section 7.06.A), the Partnership shall not, directly or indirectly, sell,
transfer or convey any property to, or purchase any property from, or borrow
funds from, or lend funds to, any Partner or any Affiliate of the Partnership or
the General Partner that is not also a Subsidiary of the Partnership, except
pursuant to transactions that are on terms that (i) with respect to
dispositions, are fair and reasonable to the Partnership, (ii) with respect to
acquisitions, are competitive and commercially reasonable to the Partnership and
at a price no greater than the cost of the property, and (iii) with respect to
loans, are as fair, competitive and commercially reasonable and no less
favorable to the Partnership than comparable loans between unaffiliated third
parties.

B. Benefit Plans. The General Partner, in its sole and absolute discretion and
without the approval of the Limited Partners, may propose and adopt on behalf of
the Partnership employee benefit plans funded by the Partnership for the benefit
of employees of the General Partner, the Partnership, Subsidiaries of the
Partnership, the Advisor or any Affiliate of any of them in respect of services
performed, directly or indirectly, for the benefit of the Partnership, the
General Partner, or any of the Partnership’s Subsidiaries.

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

Section 7.07. Indemnification

A. General. The Partnership shall indemnify each Indemnitee from and against any
and all losses, claims, damages, liabilities, joint or several, expenses
(including, without limitation, attorneys fees and other legal fees and
expenses), judgments, fines, settlements and other amounts arising from or in
connection with any and all claims, demands, actions, suits or proceedings,
civil, criminal, administrative or investigative incurred by the Indemnitee and
relating to the Partnership or the General Partner or the formation or
operations of, or the ownership of property by, either of them as set forth in
this Agreement in which any such Indemnitee may be involved, or is threatened to
be involved, as a party or otherwise, unless it is established by a final
determination of a court of competent jurisdiction that: (i) the act or omission
of the Indemnitee was material to the matter giving rise to the proceeding and
either was committed in bad faith or was the result of active and deliberate
dishonesty, (ii) the Indemnitee actually received an improper personal benefit
in money, property or services or (iii) in the case of any criminal proceeding,
the Indemnitee had reasonable cause to believe that the act or omission was
unlawful. Without limitation, the foregoing indemnity shall extend to any
liability of any Indemnitee, pursuant to a loan guarantee, contractual
obligations for any indebtedness or other obligations or otherwise, for any
indebtedness of the Partnership or any Subsidiary of the Partnership (including,
without limitation, any indebtedness which the Partnership or any Subsidiary of
the Partnership has assumed or taken subject to), and the General Partner is
hereby authorized and empowered, on behalf of the Partnership, to enter into

 

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one or more indemnity agreements consistent with the provisions of this
Section 7.07 in favor of any Indemnitee having or potentially having liability
for any such indebtedness. The termination of any proceeding by judgment, order
or settlement does not create a presumption that the Indemnitee did not meet the
requisite standard of conduct set forth in this Section 7.07.A. The termination
of any proceeding by conviction or upon a plea of nolo contendere or its
equivalent, or an entry of an order of probation prior to judgment, creates a
rebuttable presumption that the Indemnitee acted in a manner contrary to that
specified in this Section 7.07.A with respect to the subject matter of such
proceeding. Any indemnification pursuant to this Section 7.07 shall be made only
out of the assets of the Partnership, and any insurance proceeds from the
liability policy covering the General Partner and any Indemnitees, and neither
the General Partner nor any Limited Partner shall have any obligation to
contribute to the capital of the Partnership or otherwise provide funds to
enable the Partnership to fund its obligations under this Section 7.07.

B. Advancement of Expenses. Reasonable expenses expected to be incurred by an
Indemnitee shall be paid or reimbursed by the Partnership in advance of the
final disposition of any and all claims, demands, actions, suits or proceedings,
civil, criminal, administrative or investigative made or threatened against an
Indemnitee upon receipt by the Partnership of (i) a written affirmation by the
Indemnitee of the Indemnitee’s good faith belief that the standard of conduct
necessary for indemnification by the Partnership as authorized in this
Section 7.07.B has been met and (ii) a written undertaking by or on behalf of
the Indemnitee to repay the amount if it shall ultimately be determined that the
standard of conduct has not been met.

C. No Limitation of Rights. The indemnification provided by this Section 7.07
shall be in addition to any other rights to which an Indemnitee or any other
Person may be entitled under any agreement, pursuant to any vote of the
Partners, as a matter of law or otherwise, and shall continue as to an
Indemnitee who has ceased to serve in such capacity unless otherwise provided in
a written agreement pursuant to which such Indemnitee is indemnified.

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

E. Benefit Plan Fiduciary. For purposes of this Section 7.07, (i) the
Partnership shall be deemed to have requested an Indemnitee to serve as
fiduciary of an employee benefit plan whenever the performance by it of its
duties to the Partnership also imposes duties on, or otherwise involves services
by, it to the plan or participants or beneficiaries of the plan, (ii) excise
taxes assessed on an Indemnitee with respect to an employee benefit plan
pursuant to applicable law shall constitute fines within the meaning of this
Section 7.07 and (iii) actions taken or omitted by the Indemnitee with respect
to an employee benefit plan in the performance of its duties for a purpose
reasonably believed by it to be in the interest of the participants and
beneficiaries of the plan shall be deemed to be for a purpose which is not
opposed to the best interests of the Partnership.

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

G. Interested Transactions. An Indemnitee shall not be denied indemnification in
whole or in part under this Section 7.07 because the Indemnitee had an interest
in the transaction with respect to which the indemnification applies if the
transaction was otherwise permitted by the terms of this Agreement.

 

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H. Benefit. The provisions of this Section 7.07 are for the benefit of the
Indemnitees, their heirs, successors, assigns and administrators and shall not
be deemed to create any rights for the benefit of any other Persons. Any
amendment, modification or repeal of this Section 7.07, or any provision hereof,
shall be prospective only and shall not in any way affect the limitation on the
Partnership’s liability to any Indemnitee under this Section 7.07 as in effect
immediately prior to such amendment, modification or repeal with respect to
claims arising from or related to matters occurring, in whole or in part, prior
to such amendment, modification or repeal, regardless of when such claims may
arise or be asserted.

I. Indemnification Payments Not Distributions. If and to the extent any payments
to the General Partner pursuant to this Section 7.07 constitute gross income to
the General Partner (as opposed to the repayment of advances made on behalf of
the Partnership), such amounts shall constitute guaranteed payments within the
meaning of Section 707(c) of the Code, shall be treated consistently therewith
by the Partnership and all Partners, and shall not be treated as distributions
for purposes of computing the Partners’ Capital Accounts.

J. Compliance with Guidelines. Notwithstanding any other term or condition of
this Agreement, any indemnification, limitation of liability or advancement of
expenses by the Partnership under Section 7.07 of this Agreement shall be
permitted only to the extent such indemnification, limitation of liability or
advancement of expenses is consistent with Section II.G of the Statement of
Policy Regarding Real Estate Investment Trusts published by the North American
Securities Administrators Association.

Section 7.08. Liability of the General Partner

A. General. Notwithstanding anything to the contrary set forth in this
Agreement, the General Partner and its directors and officers shall not be
liable for monetary damages to the Partnership, any Partners or any Assignees
for losses sustained, liabilities incurred or benefits not derived as a result
of errors in judgment or mistakes of fact or law or of any act or omission if
the General Partner or its directors and officers acted in good faith.

B. No Obligation to Consider Separate Interests of Limited Partners or
Stockholders. The Limited Partners expressly acknowledge that the General
Partner is acting on behalf of the Partnership and the General Partner’s
stockholders collectively, that the General Partner is under no obligation to
consider the separate interests of the Limited Partners (including, without
limitation, the tax consequences to Limited Partners or Assignees or to such
stockholders) in deciding whether to cause the Partnership to take (or decline
to take) any actions. In the event of a conflict between the interests of the
stockholders of the General Partner on one hand and the Limited Partners on the
other, the General Partner shall endeavor in good faith to resolve the conflict
in manner not adverse to either the stockholders of the General Partner or the
Limited Partners; provided, however, that for so long as the General Partner
owns a controlling interest in the Partnership, any such conflict that cannot be
resolved in a manner not adverse to either the stockholders of the General
Partner or the Limited Partners shall be resolved in favor of the stockholders.
The General Partner shall not be liable for monetary damages or otherwise for
losses sustained, liabilities incurred or benefits not derived by Limited
Partners in connection with such decisions, provided that the General Partner
has acted in good faith.

C. Actions of Agents. Subject to its obligations and duties as General Partner
set forth in Section 7.01.A above, the General Partner may exercise any of the
powers granted to it by this Agreement and perform any of the duties imposed
upon it hereunder either directly or by or through its employees or agents. The
General Partner shall not be responsible for any misconduct or negligence on the
part of any such employee or agent appointed by the General Partner in good
faith.

 

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D. Effect of Amendment. Any amendment, modification or repeal of this
Section 7.08 or any provision hereof shall be prospective only and shall not in
any way affect the limitations on the General Partner’s liability to the
Partnership and the Limited Partners under this Section 7.08 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. Certain Definitions. Whenever in this Agreement the General Partner is
permitted or required to make a decision (i) in its “sole discretion “or
“discretion,” or under a similar grant of authority or latitude, the General
Partner shall be entitled to consider such interests and factors as it desires
and may consider its own interests, and shall have no duty or obligation to give
any consideration to any interest of or factors affecting the Partnership or the
Limited Partners, or (ii) in its “good faith” or under another express standard,
the General Partner shall act under such express standard and shall not be
subject to any other or different standards imposed by this Agreement or by law
or any other agreement contemplated herein.

Section 7.09. Other Matters Concerning the General Partner

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

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

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

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

Section 7.10. Reliance by Third Parties

Notwithstanding anything to the contrary in this Agreement, any Person dealing
with the Partnership shall be entitled to assume that the General Partner has
full power and authority, without consent or approval of any other Partner or
Person, to encumber, sell or otherwise use in any manner any and all assets of
the Partnership, to enter into any contracts on behalf of the Partnership and to
take any and all actions on behalf of the Partnership, and such Person shall be
entitled to deal with the General

 

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Partner as if the General Partner were the Partnership’s sole party in interest,
both legally and beneficially. Each Limited Partner hereby waives any and all
defenses or other remedies which may be available against such Person to
contest, negate or disaffirm any action of the General Partner in connection
with any such dealing. In no event shall any Person dealing with the General
Partner or its representatives be obligated to ascertain that the terms of this
Agreement have been complied with or to inquire into the necessity or expedience
of any act or action of the General Partner or its representatives. Each and
every certificate, document or other instrument executed on behalf of the
Partnership by the General Partner or its representatives shall be conclusive
evidence in favor of any and every Person relying thereon or claiming thereunder
that (i) at the time of the execution and delivery of such certificate, document
or instrument, this Agreement was in full force and effect, (ii) the Person
executing and delivering such certificate, document or instrument was duly
authorized and empowered to do so for and on behalf of the Partnership, and
(iii) such certificate, document or instrument was duly executed and delivered
in accordance with the terms and provisions of this Agreement and is binding
upon the Partnership.

Section 7.11. Restrictions on General Partner’s Authority

A. Consent Required. The General Partner may not take any action in
contravention of an express prohibition or limitation of this Agreement without
the written Consent of (i) all Partners adversely affected or (ii) such lower
percentage of the Limited Partnership Interests as may be specifically provided
for under a provision of this Agreement or the Act.

B. Sale of All Assets of the Partnership. Except as provided in Article XIII
hereof, the General Partner may not, directly or indirectly, cause the
Partnership to sell, exchange, transfer or otherwise dispose of all or
substantially all of the Partnership’s assets in a single transaction or a
series of related transactions (including by way of merger (including a
triangular merger), consolidation or other combination with any other Persons)
(i) if such merger, sale or other transaction is in connection with a
Termination Transaction permitted under Section 11.02.B hereof, without the
Consent of the Partners holding a majority of Percentage Interests (including
the effect of any Partnership Units held by the General Partner) or
(ii) otherwise, without the Consent of the Limited Partners.

Section 7.12. Loans by Third Parties

The Partnership may incur Debt, or enter into similar credit, guarantee,
financing or refinancing arrangements for any purpose (including, without
limitation, in connection with any acquisition of property or other assets) with
any Person that is not the General Partner upon such terms as the General
Partner determines appropriate.

ARTICLE VIII

RIGHTS AND OBLIGATIONS OF LIMITED PARTNERS

Section 8.01. Limitation of Liability

The Limited Partners shall have no liability under this Agreement except as
expressly provided in this Agreement, including Section 10.05 hereof, or under
the Act.

Section 8.02. Management of Business

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

Section 8.03. Outside Activities of Limited Partners

Subject to Section 7.05 hereof, and subject to any agreements entered into
pursuant to Section 7.06.C hereof and to any other agreements entered into by a
Limited Partner or its Affiliates with the Partnership or a Subsidiary, any
Limited Partner (other than the General Partner) and any officer, director,
employee, agent, trustee, Affiliate or stockholder of any Limited Partner shall
be entitled to and may have business interests and engage in business activities
in addition to those relating to the Partnership, including business interests
and activities in direct or indirect competition with the Partnership. Neither
the Partnership nor any Partners shall have any rights by virtue of this
Agreement in any business ventures of any Limited Partner or Assignee. None of
the Limited Partners (other than the General Partner) nor any other Person shall
have any rights by virtue of this Agreement or the partnership relationship
established hereby in any business ventures of any other Person (other than the
General Partner to the extent expressly provided herein), and such Person shall
have no obligation pursuant to this Agreement to offer any interest in any such
business ventures to the Partnership, any Limited Partner or any such other
Person, even if such opportunity is of a character which, if presented to the
Partnership, any Limited Partner or such other Person, could be taken by such
Person.

Section 8.04. Return of Capital

Except pursuant to the rights of redemption set forth in Section 8.06 below, no
Limited Partner shall be entitled to the withdrawal or return of its Capital
Contribution, except to the extent of distributions made pursuant to this
Agreement or upon termination of the Partnership as provided herein. No Limited
Partner or Assignee shall have priority over any other Limited Partner or
Assignee either as to the return of Capital Contributions (except as permitted
by Section 4.02.A hereof) or, except to the extent provided by Exhibit C hereto
or as permitted by Sections 4.02.A, 5.01.B, 6.01.A and 6.01.B hereof or
otherwise expressly provided in this Agreement, as to profits, losses,
distributions or credits.

Section 8.05. Rights of Limited Partners Relating to the Partnership

A. General. In addition to other rights provided by this Agreement or by the
Act, and except as limited by 8.05.D below, each Limited Partner shall have the
right, for a purpose reasonably related to such Limited Partner’s interest as a
limited partner in the Partnership, upon written demand with a statement of the
purpose of such demand and at such Limited Partner’s own expense:

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

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

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

 

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

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

B. Notice of Conversion Factor. The Partnership shall notify each Limited
Partner upon request of the then current Conversion Factor and any changes that
have been made thereto.

C. Confidentiality. Notwithstanding any other provision of this Section 8.05,
the General Partner may keep confidential from the Limited Partners, for such
period of time as the General Partner determines in its sole and absolute
discretion to be reasonable, any information that (i) the General Partner
reasonably believes to be in the nature of trade secrets or other information
the disclosure of which the General Partner in good faith believes is not in the
best interests of the Partnership or could damage the Partnership or its
business or (ii) the Partnership is required by law or by agreements with
unaffiliated third parties to keep confidential.

Section 8.06. Class A Redemption Right

A. General. (i) Subject to Section 8.06.C below, on or after the date two
(2) years after the issuance of a Class A Unit to a Limited Partner pursuant to
Article IV hereof, the holder of a Class A Unit (if other than the General
Partner) shall have the right (the “Redemption Right”) to require the
Partnership to redeem such Class A Unit on a Specified Redemption Date and at a
redemption price equal to and in the form of the Cash Amount to be paid by the
Partnership. Any such Redemption Right shall be exercised pursuant to a Notice
of Redemption delivered to the Partnership (with a copy to the General Partner)
by the Limited Partner who is exercising the Redemption Right (the “Redeeming
Partner”). A Limited Partner may not exercise the Redemption Right for less than
one thousand (1,000) Class A Units or, if such Redeeming Partner holds less than
one thousand (1,000) Class A Units, for less than all of the Class A Units held
by such Redeeming Partner.

(ii) The Redeeming Partner shall have no right with respect to any Class A Units
so redeemed to receive any distributions paid after the Specified Redemption
Date.

(iii) The Assignee of any Limited Partner may exercise the rights of such
Limited Partner pursuant to this Section 8.06 and such Limited Partner shall be
deemed to have assigned such rights to such Assignee and shall be bound by the
exercise of such rights by such Limited Partner’s Assignee. In connection with
any exercise of the such rights by such Assignee on behalf of such Limited
Partner, the Cash Amount shall be paid by the Partnership directly to such
Assignee and not to such Limited Partner.

B. General Partner Assumption of Right. (i) If a Limited Partner has delivered a
Notice of Redemption, the General Partner may, in its sole and absolute
discretion (subject to any limitations on ownership and transfer of Shares set
forth in the Declaration of Trust), elect to assume directly and satisfy a
Redemption Right by paying to the Redeeming Partner either the Cash Amount or
the Shares Amount, as the General Partner determines in its sole and absolute
discretion (provided that payment of the Redemption Amount in the form of Shares
shall be in Shares registered under Section 12 of the Exchange Act on the
Specified Redemption Date, whereupon the General Partner shall acquire the
Class A Units offered for redemption by the Redeeming Partner and shall be
treated for all purposes of this Agreement as the owner of such Partnership
Units. Unless the General Partner, in its sole and absolute discretion, shall
exercise its right to assume directly and satisfy the Redemption Right, the
General Partner shall not

 

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have any obligation to the Redeeming Partner or to the Partnership with respect
to the Redeeming Partner’s exercise of the Redemption Right. In the event the
General Partner shall exercise its right to satisfy the Redemption Right in the
manner described in the first sentence of this Section 8.06.B and shall fully
perform its obligations in connection therewith, the Partnership shall have no
right or obligation to pay any amount to the Redeeming Partner with respect to
such Redeeming Partner’s exercise of the Redemption Right, and each of the
Redeeming Partner, the Partnership and the General Partner shall, for federal
income tax purposes, treat the transaction between the General Partner and the
Redeeming Partner as a sale of the Redeeming Partner’s Partnership Units to the
General Partner. Nothing contained in this Section 8.06.B shall imply any right
of the General Partner to require any Limited Partner to exercise the Redemption
Right afforded to such Limited Partner pursuant to Section 8.06.A above.

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

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

C. Exceptions to Exercise of Redemption Right. Notwithstanding the provisions of
Sections 8.06.A and 8.06.B above, a Partner shall not be entitled to exercise
the Redemption Right pursuant to Section 8.06.A above if (but only as long as)
the delivery of Shares to such Partner on the Specified Redemption Date
(i) would be prohibited under the Declaration of Trust or (ii) if the Shares are
Publicly Traded, would be prohibited under applicable federal or state
securities laws or regulations (in each case regardless of whether the General
Partner would in fact assume and satisfy the Redemption Right).

D. No Liens on Partnership Units Delivered for Redemption. Each Limited Partner
covenants and agrees with the General Partner that all Partnership Units
delivered for redemption (including Partnership Units redeemed under
Sections 8.06 and 8.07) shall be delivered to the Partnership or the General
Partner, as the case may be, free and clear of all liens, and, notwithstanding
anything contained herein to the contrary, neither the General Partner nor the
Partnership shall be under any obligation to redeem Partnership Units which are
or may be subject to any liens. Each Limited Partner further agrees that, in the
event any state or local property transfer tax is payable as a result of the
transfer of its Partnership Units to the Partnership or the General Partner,
such Limited Partner shall assume and pay such transfer tax.

E. Additional Partnership Interests. In the event that the Partnership issues
Partnership Interests to any Additional Limited Partner pursuant to Article IV
hereof, the General Partner shall make such amendments to this Section 8.06 as
it determines are necessary to reflect the issuance of such Partnership
Interests (including setting forth any restrictions on the exercise of the
Redemption Right with respect to such Partnership Interests).

Section 8.07. Redemption of Class B Interest; Advisor Redemption Interest

A. Without Cause. If the Advisor is removed, replaced or otherwise terminated
without Cause pursuant to the Advisory Agreement then the Class B Interest shall
be redeemed as of the Termination Date for a newly created class of Partnership
Interest (the “Advisor Redemption Interest”);

 

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provided, however, that the Class B Interest shall be forfeited for no
consideration in the event that the Advisor chooses to unilaterally terminate
the Advisory Agreement without cause by giving such notice of termination
pursuant to the Advisory Agreement. The initial Capital Account balance of the
Advisor Redemption Interest shall be the amount equal to the fair value of the
redeemed Class B Interest as of such Termination Date as determined herein (the
“Advisor Redemption Interest Amount”). The General Partner shall send notice of
redemption together with the name of an appraiser to value the redeemed Class B
Interest. The holder of the redeemed Class B Interest may, if it so desires,
notify the General Partner that it has selected another appraiser. The
appraiser(s) shall determine the fair value of the redeemed Class B Interest as
of the Termination Date. If such appraisers are not able to jointly determine
such fair value, they shall jointly select a third appraiser and submit their
respective determinations of such fair value to such appraiser, who shall select
as the fair value one of the two appraisals of the redeemed Class B Interest.
When determining the fair value of the redeemed Class B Interest, the appraiser
shall take into account all Net Income and distributions to which the redeemed
Class B Interest was and would be entitled if all of the assets of the
Partnership were sold for their fair value on the Termination Date and the
proceeds were distributed on such date pursuant to this Agreement. So long as
the Advisor Redemption Interest remains outstanding, the holder of the Advisor
Redemption Interest shall be entitled to receive 15% of the Capital Proceeds
received by the Partnership from a Capital Transaction after the holders of the
Class A Interest, in accordance with their respective Percentage Interests, have
received cumulative distributions equal to the aggregate Capital Contributions
made by the holders of the Class A Interest to the Partnership plus a
cumulative, uncompounded return thereon of 7% per annum, determined by taking
into account the dates on which all such Capital Contributions and distributions
were made. The Advisor Redemption Interest Amount shall be paid, as determined
by the General Partner’s board of trustees, including a majority of the
independent trustees, either in the form of cash or Shares. The Advisor
Redemption Interest shall be redeemed upon the payment of the Advisor Redemption
Interest Amount.

B. For Cause. If the Advisor is removed, replaced or otherwise terminated for
Cause pursuant to the Advisory Agreement, then the Class B Interest will be
subject to mandatory redemption on the Termination Date for $100.

Section 8.08. Voting Rights Of the Class B Interest

So long as the Class B Interest or an Advisor Redemption Interest remains
outstanding, the Partnership shall not, without the consent of the Class B
Partner or the holders of the Advisor Redemption Interest, as applicable, given
in person or by proxy, amend, alter or repeal, whether by merger, consolidation
or otherwise, the provisions of the Partnership Agreement applicable to such
Interest so as to materially and adversely affect any right, privilege or voting
power of such Interest or such Partner.

ARTICLE IX

BOOKS, RECORDS, ACCOUNTING AND REPORTS

Section 9.01. Records and Accounting

The General Partner shall keep or cause to be kept at the principal office of
the Partnership appropriate books and records with respect to the Partnership’s
business, including, without limitation, all books and records necessary to
provide to the Limited Partners any information, lists and copies of documents
required to be provided pursuant to Section 9.03 below. Any records maintained
by or on behalf of the Partnership in the regular course of its business may be
kept on, or be in the form of, punch cards, magnetic tape, photographs,
micrographics or any other information storage device, provided that the records
so maintained are convertible into clearly legible written form within a
reasonable period of time. The books of the Partnership shall be maintained, for
financial and tax reporting purposes, on an accrual basis in accordance with
generally accepted accounting principles.

 

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Section 9.02. Fiscal Year

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

Section 9.03. Reports

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

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

ARTICLE X

TAX MATTERS

Section 10.01. Preparation of Tax Returns

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

Section 10.02. Tax Elections

Except as otherwise provided herein, the General Partner shall, in its sole and
absolute discretion, determine whether to make any available election pursuant
to the Code. The General Partner shall have the right to seek to revoke any such
election (including, without limitation, an election under Section 754 of the
Code) upon the General Partner’s determination in its sole and absolute
discretion that such revocation is in the best interests of the Partners.

Section 10.03. Tax Matters Partner

A. General. The General Partner shall be the “tax matters partner” of the
Partnership for federal income tax purposes. Pursuant to Section 6223(c)(3) of
the Code, upon receipt of notice from the

 

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IRS of the beginning of an administrative proceeding with respect to the
Partnership, the tax matters partner shall furnish the IRS with the name,
address, taxpayer identification number and profit interest of each of the
Limited Partners and any Assignees; provided, however, that such information is
provided to the Partnership by the Limited Partners.

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

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

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

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

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

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

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

The taking of any action and the incurring of any expense by the tax matters
partner in connection with any such proceeding, except to the extent required by
law, is a matter in the sole and absolute discretion of the tax matters partner
and the provisions relating to indemnification of the General Partner set forth
in Section 7.07 hereof shall be fully applicable to the tax matters partner in
its capacity as such.

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

 

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Section 10.04. Organizational Expenses

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

Section 10.05. Withholding

Each Limited Partner hereby authorizes the Partnership to withhold from or pay
on behalf of or with respect to such Limited Partner any amount of federal,
state, local, or foreign taxes that the General Partner determines that the
Partnership is required to withhold or pay with respect to any amount
distributable or allocable to such Limited Partner pursuant to this Agreement,
including, without limitation, any taxes required to be withheld or paid by the
Partnership pursuant to Section 1441, 1442, 1445, or 1446 of the Code. Any
amount paid on behalf of or with respect to a Limited Partner shall constitute a
recourse loan by the Partnership to such Limited Partner, which loan shall be
repaid by such Limited Partner within fifteen (15) days after notice from the
General Partner that such payment must be made unless (i) the Partnership
withholds such payment from a distribution which would otherwise be made to the
Limited Partner or (ii) the General Partner determines, in its sole and absolute
discretion, that such payment may be satisfied out of the available funds of the
Partnership which would, but for such payment, be distributed to the Limited
Partner. Any amounts withheld pursuant to the foregoing clauses (i) or
(ii) shall be treated as having been distributed to such Limited Partner. Each
Limited Partner hereby unconditionally and irrevocably grants to the Partnership
a security interest in such Limited Partner’s Partnership Interest to secure
such Limited Partner’s obligation to pay to the Partnership any amounts required
to be paid pursuant to this Section 10.05. In the event that a Limited Partner
fails to pay any amounts owed to the Partnership pursuant to this Section 10.05
when due, the General Partner may, in its sole and absolute discretion, elect to
make the payment to the Partnership on behalf of such defaulting Limited
Partner, and in such event shall be deemed to have loaned such amount to such
defaulting Limited Partner and shall succeed to all rights and remedies of the
Partnership as against such defaulting Limited Partner (including, without
limitation, the right to receive distributions). Any amounts payable by a
Limited Partner hereunder shall bear interest at the base rate on corporate
loans at large United States money center commercial banks, as published from
time to time in the Wall Street Journal, plus four (4) percentage points (but
not higher than the maximum lawful rate) from the date such amount is due (i.e.,
fifteen (15) days after demand) until such amount is paid in full. Each Limited
Partner shall take such actions as the Partnership or the General Partner shall
request in order to perfect or enforce the security interest created hereunder.

ARTICLE XI

TRANSFERS AND WITHDRAWALS

Section 11.01. Transfer

A. Definition. The term “transfer,” when used in this Article XI with respect to
a Partnership Interest or a Partnership Unit, shall be deemed to refer to a
transaction by which the General Partner purports to assign all or any part of
its General Partnership Interest to another Person or by which a Limited Partner
purports to assign all or any part of its Limited Partnership Interest to
another Person, and includes a sale, assignment, gift, pledge, encumbrance,
hypothecation, mortgage, exchange or any other disposition by law or otherwise.
The term “transfer” when used in this Article XI does not include any redemption
or repurchase of Partnership Units by the Partnership from a Partner (including
the General Partner) or acquisition of Partnership Units from a Limited Partner
by the General Partner pursuant to Section 8.06 hereof or otherwise. No part of
the interest of a Limited Partner shall be subject to the claims of any
creditor, any spouse for alimony or support, or to legal process, and may not be
voluntarily or involuntarily alienated or encumbered except as may be
specifically provided for in this Agreement.

 

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

Section 11.02. Transfers of Partnership Interests of General Partner

A. Except for transfers of Partnership Units to the Partnership as provided in
Section 7.05 or Section 8.06 hereof, the General Partner may not transfer any of
its Partnership Interest except (i) to a wholly-owned Subsidiary or (ii) as
otherwise expressly permitted under this Agreement. In addition, the General
Partner shall not withdraw as General Partner or engage in a Termination
Transaction except in connection with a transaction described in Section 11.02.B
below.

B. The General Partner shall not engage in any merger (including 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 change of outstanding Shares (other than a change in par value, or from par
value to no par value, or as a result of a subdivision or combination as
described in the definition of “Conversion Factor”) (“Termination Transaction”),
unless the Termination Transaction has been approved by the Consent of the
Partners holding a majority or more of the then outstanding Percentage Interests
(including the effect of any Partnership Units held by the General Partner) and
in connection with which all Limited Partners (excluding the Class B Partner)
either will receive, or will have the right to elect to receive, for each
Partnership Unit an amount of cash, securities, or other property equal to the
product of the Conversion Factor and the greatest amount of cash, securities or
other property paid to a holder of Shares, if any, corresponding to such
Partnership Unit that was issued pursuant to Section 4.02.A hereof in
consideration of one such Share at any time during the period from and after the
date on which the Termination Transaction is consummated; provided that, if, in
connection with the Termination Transaction, a purchase, tender or exchange
offer shall have been made to and accepted by the holders of more than fifty
percent (50%) of the outstanding Shares, each holder of Partnership Units shall
receive, or shall have the right to elect 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
Partnership Units immediately prior to the expiration of such purchase, tender
or exchange offer and had thereupon accepted such purchase, tender or exchange
offer.

Section 11.03. Limited Partners’ Rights to Transfer

A. General. A Limited Partner may not transfer any of such Limited Partner’s
rights as a Limited Partner without the consent of the General Partner, which
consent the General Partner may withhold in its sole discretion.

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

C. No Transfers Violating Securities Laws. The General Partner may prohibit any
transfer of Partnership Units by a Limited Partner if, in the opinion of legal
counsel to the Partnership, such transfer would require filing of a registration
statement under the Securities Act or would otherwise violate any federal, or
state securities laws or regulations applicable to the Partnership or the
Partnership Unit.

 

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D. No Transfers Affecting Tax Status of Partnership. No transfer of Partnership
Units by a Limited Partner (including a redemption or exchange pursuant to
Section 8.06 hereof) may be made to any Person if (i) in the opinion of legal
counsel for the Partnership, it would result in the Partnership being treated as
an association taxable as a corporation for federal income tax purposes or would
result in a termination of the Partnership for federal income tax purposes
(except as a result of the redemption or exchange for Shares of all Partnership
Units held by all Limited Partners other than the General Partner or any
Subsidiary of the General Partner or pursuant to a transaction expressly
permitted under Section 7.11.B or Section 11.02 hereof), (ii) in the opinion of
legal counsel for the Partnership, it would adversely affect the ability of the
General Partner to continue to qualify as a REIT or would subject the General
Partner to any additional taxes under Section 857 or Section 4981 of the Code or
(iii) such transfer is effectuated through an “established securities market” or
a “secondary market (or the substantial equivalent thereof)” within the meaning
of Section 7704 of the Code.

E. No Transfers to Holders of Nonrecourse Liabilities. No pledge or transfer of
any Partnership Units may be made to a lender to the Partnership, or to any
Person who is related (within the meaning of Section 1.752-4(b) of the
Regulations) to any lender to the Partnership, whose loan constitutes a
Nonrecourse Liability without the consent of the General Partner, in its sole
and absolute discretion; provided that, as a condition to such consent the
lender will be required to enter into an arrangement with the Partnership and
the General Partner to exchange or redeem for the Redemption Amount any
Partnership Units transferred or in which a security interest is held
simultaneously with the time at which such lender would be deemed to be a
partner in the Partnership for purposes of allocating liabilities to such lender
under Section 752 of the Code.

F. Transfer Register. The General Partner shall keep a register for the
Partnership on which the transfer, pledge or release of Partnership Units shall
be shown and pursuant to which entries shall be made to effect all transfers,
pledges or releases as required by Sections 8-207,8-313(1) and 8-321 of the
Uniform Commercial Code, as amended, in effect in the States of New York and
Delaware; provided, however, that if there is any conflict between such
requirements, the provisions of the Delaware Uniform Commercial Code shall
govern. The General Partner shall (i) place proper entries in such register
clearly showing each transfer and each pledge and grant of security interest and
the transfer and assignment pursuant thereto, such entries to be endorsed by the
General Partner and (ii) maintain the register and make the register available
for inspection by all of the Partners and their pledgees at all times during the
term of this Agreement. Nothing herein shall be deemed a consent to any pledge
or transfer otherwise prohibited under this Agreement.

Section 11.04. Substituted Limited Partners

A. Consent of General Partner. No Limited Partner shall have the right to
substitute a transferee as a Limited Partner in its place without the consent of
the General Partner to the admission of a transferee of the interest of a
Limited Partner pursuant to this Section 11.04 as a Substituted Limited Partner,
which consent may be given or withheld by the General Partner in its sole and
absolute discretion. The General Partner’s failure or refusal to permit a
transferee of any such interests to become a Substituted Limited Partner shall
not give rise to any cause of action against the Partnership or any Partner.

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

 

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any transferee as a Substituted Limited Partner shall be conditioned upon the
transferee executing and delivering to the Partnership an acceptance of all the
terms and conditions of this Agreement (including, without limitation, the
provisions of Section 15.11 hereof and such other documents or instruments as
may be required to effect the admission).

C. Amendment and Restatement of Exhibit A. Upon the admission of a Substituted
Limited Partner, the General Partner shall amend and restate Exhibit A hereto to
reflect the name, address, Capital Account, number of Partnership Units, and
Percentage Interest of such Substituted Limited Partner and to eliminate or
adjust, if necessary, the name, address, Capital Account and Percentage Interest
of the predecessor of such Substituted Limited Partner.

Section 11.05. Assignees

If the General Partner, in its sole and absolute discretion, does not consent to
the admission of any permitted transferee under Section 11.03 above as a
Substituted Limited Partner, as described in Section 11.04 above, such
transferee shall be considered an Assignee for purposes of this Agreement. An
Assignee shall be entitled to all the rights of an assignee of a limited
partnership interest under the Act, including the right to receive distributions
from the Partnership and the share of Net Income, Net Losses, gain, loss and
Recapture Income attributable to the Partnership Units assigned to such
transferee, and shall have the rights granted to the Limited Partners under
Section 8.06 hereof but shall not be deemed to be a holder of Partnership Units
for any other purpose under this Agreement, and shall not be entitled to vote
such Partnership Units in any matter presented to the Limited Partners for a
vote (such Partnership Units being deemed to have been voted on such matter in
the same proportion as all other Partnership Units held by Limited Partners are
voted). In the event any such transferee desires to make a further assignment of
any such Partnership Units, such transferee shall be subject to all the
provisions of this Article XI to the same extent and in the same manner as any
Limited Partner desiring to make an assignment of Partnership Units.

Section 11.06. General Provisions

A. Withdrawal of Limited Partner. No Limited Partner may withdraw from the
Partnership other than as a result of a permitted transfer of all of such
Limited Partner’s Partnership Units in accordance with this Article XI or
pursuant to redemption of all of its Partnership Units under Section 8.06
hereof.

B. Termination of Status as Limited Partner. Any Limited Partner who shall
transfer all of its Partnership Units in a transfer permitted pursuant to this
Article XI or pursuant to redemption of all of its Partnership Units under
Section 8.06 hereof shall cease to be a Limited Partner.

C. Timing of Transfers. Transfers pursuant to this Article XI may only be made
on the first day of a fiscal quarter of the Partnership, unless the General
Partner otherwise agrees.

D. Allocations. If any Partnership Interest is transferred during any quarterly
segment of the Partnership’s fiscal year in compliance with the provisions of
this Article XI or redeemed or transferred pursuant to Section 8.06 hereof, Net
Income, Net Losses, each item thereof and all other items attributable to such
interest for such fiscal year shall be divided and allocated between the
transferor Partner and the transferee Partner by taking into account their
varying interests during the fiscal year in accordance with Section 706(d) of
the Code, using the interim closing of the books method (unless the General
Partner, in its sole and absolute discretion, elects to adopt a daily, weekly,
or a monthly proration period, in which event Net Income, Net Losses, each item
thereof and all other items attributable to such interest for such fiscal year
shall be prorated based upon the applicable method selected by the General
Partner). Solely

 

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for purposes of making such allocations, each of such items for the calendar
month in which the transfer or redemption occurs shall be allocated to the
Person who is a Partner as of midnight on the last day of said month. All
distributions attributable to any Partnership Unit with respect to which the
Partnership Record Date is before the date of such transfer, assignment or
redemption shall be made to the transferor Partner or the Redeeming Partner, as
the case may be, and, in the case of a transfer or assignment other than a
redemption, all distributions thereafter attributable to such Partnership Unit
shall be made to the transferee Partner.

E. Additional Restrictions. In addition to any other restrictions on transfer
herein contained, including without limitation the provisions of this
Article XI, in no event may any transfer or assignment of a Partnership Interest
by any Partner (including pursuant to Section 8.06 hereof) be made without the
express consent of the General Partner, in its sole and absolute discretion,
(i) to any person or entity who lacks the legal right, power or capacity to own
a Partnership Interest; (ii) in violation of applicable law; (iii) of any
component portion of a Partnership Interest, such as the Capital Account, or
rights to distributions, separate and apart from all other components of a
Partnership Interest; (iv) if in the opinion of legal counsel to the Partnership
such transfer would cause a termination of the Partnership for federal or state
income tax purposes (except as a result of the redemption or exchange for Shares
of all Partnership Units held by all Limited Partners or pursuant to a
transaction expressly permitted under Section 7.11.B or Section 11.02 hereof);
(v) if in the opinion of counsel to the Partnership, such transfer would cause
the Partnership to cease to be classified as a partnership for federal income
tax purposes (except as a result of the redemption or exchange for Shares of all
Partnership Units held by all Limited Partners or pursuant to a transaction
expressly permitted under Section 7.11.B or Section 11.02 hereof); (vi) if such
transfer would cause the Partnership to become, with respect to any employee
benefit plan subject to Title I of ERISA, a “party-in-interest” (as defined in
Section 3(14) of ERISA) or a “disqualified person” (as defined in
Section 4975(c) of the Code); (vii) if such transfer would, in the opinion of
counsel to the Partnership, cause any portion of the assets of the Partnership
to constitute assets of any employee benefit plan pursuant to Department of
Labor Regulations Section 2510.1101; (viii) if such transfer requires the
registration of such Partnership Interest pursuant to any applicable federal or
state securities laws; (ix) if such transfer is effectuated through an
“established securities market” or a “secondary market” (or the substantial
equivalent thereof) within the meaning of Section 7704 of the Code or such
transfer causes the Partnership to become a “publicly traded partnership,” as
such term is defined in Section 469(k)(2) or Section 7704(b) of the Code; (x) if
such transfer subjects the Partnership to regulation under the Investment
Company Act of 1940, the Investment Advisors Act of 1940 or the Employee
Retirement Income Security Act of 1974, each as amended; (xi) if the transferee
or assignee of such Partnership Interest is unable to make the representations
set forth in Section 15.14 hereof or such transfer could otherwise adversely
affect the ability of the General Partner to remain qualified as a REIT; or
(xii) if in the opinion of legal counsel for the Partnership, such transfer
would adversely affect the ability of the General Partner to continue to qualify
as a REIT or subject the General Partner to any additional taxes under
Section 857 or Section 4981 of the Code.

F. Avoidance of “Publicly Traded Partnership” Status. The General Partner shall
monitor the transfers of interests in the Partnership to determine (i) if such
interests are being traded on an “established securities market” or a “secondary
market (or the substantial equivalent thereof)” within the meaning of
Section 7704 of the Code and (ii) whether additional transfers of interests
would result in the Partnership being unable to qualify for at least one of the
“safe harbors” set forth in Regulations Section 1.7704-1 (or such other guidance
subsequently published by the IRS setting forth safe harbors under which
interests will not be treated as “readily tradable” on a secondary market (or
the substantial equivalent thereof) within the meaning of Section 7704 of the
Code (the “Safe Harbors”). The General Partner shall take all steps reasonably
necessary or appropriate to prevent any trading of interests or any recognition
by the Partnership of transfers made on such markets and, except as otherwise
provided herein, to insure that at least one of the Safe Harbors is met.

 

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ARTICLE XII

ADMISSION OF PARTNERS

Section 12.01. Admission of Successor General Partner

A successor to all of the General Partner’s General Partnership Interest
pursuant to Section 11.02 hereof who is proposed to be admitted as a successor
General Partner shall be admitted to the Partnership as the General Partner,
effective upon such transfer. Any such transferee shall carry on the business of
the Partnership without dissolution. In each case, the admission shall be
subject to the successor General Partner’s executing and delivering to the
Partnership an acceptance of all of the terms and conditions of this Agreement
and such other documents or instruments as may be required to effect the
admission.

Section 12.02. Admission of Additional Limited Partners

A. General. No Person shall be admitted as an Additional Limited Partner without
the consent of the General Partner, which consent shall be given or withheld in
the General Partner’s sole and absolute discretion. A Person who makes a Capital
Contribution to the Partnership in accordance with this Agreement, including,
without limitation, pursuant to Section 4.01.C hereof, or who exercises an
option to receive Partnership Units shall be admitted to the Partnership as an
Additional Limited Partner only with the consent of the General Partner and only
upon furnishing to the General Partner (i) evidence of acceptance in form
satisfactory to the General Partner of all of the terms and conditions of this
Agreement, including, without limitation, the power of attorney granted in
Section 15.11 hereof and (ii) such other documents or instruments as may be
required in the discretion of the General Partner in order to effect such
Person’s admission as an Additional Limited Partner. The admission of any Person
as an Additional Limited Partner shall become effective on the date upon which
the name of such Person is recorded on the books and records of the Partnership,
following the consent of the General Partner to such admission.

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

Section 12.03. Amendment of Agreement and Certificate of Limited Partnership

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

 

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ARTICLE XIII

DISSOLUTION AND LIQUIDATION

Section 13.01. Dissolution

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

(i) the expiration of its term as provided in Section 2.04 hereof;

(ii) an event of withdrawal of the General Partner, as defined in the Act (other
than an event of bankruptcy), unless, within ninety (90) days after the
withdrawal a “majority in interest” (as defined below) of the remaining Partners
Consent in writing to continue the business of the Partnership and to the
appointment, effective as of the date of withdrawal, of a substitute General
Partner;

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

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

(v) a final and nonappealable judgment is entered by a court of competent
jurisdiction ruling that the General Partner is bankrupt or insolvent, or a
final and nonappealable order for relief is entered by a court with appropriate
jurisdiction against the General Partner, in each case under any federal or
state bankruptcy or insolvency laws as now or hereafter in effect, unless prior
to or within ninety days after of the entry of such order or judgment a
“majority in interest” (as defined below) of the remaining Partners Consent in
writing to continue the business of the Partnership and to the appointment,
effective as of a date prior to the date of such order or judgment, of a
substitute General Partner.

As used herein, a “majority in interest” shall refer to Partners (excluding the
General Partner) who hold more than fifty percent (50%) of the outstanding
Percentage Interests not held by the General Partner.

Section 13.02. Winding Up

A. General. Upon the occurrence of a Liquidating Event, the Partnership shall
continue solely for the purposes of winding up its affairs in an orderly manner,
liquidating its assets, and satisfying the claims of its creditors and Partners.
No Partner shall take any action that is in consistent with, or not necessary to
or appropriate for, the winding up of the Partnership’s business and affairs.
The General Partner (or, in the event there is no remaining General Partner, any
Person elected by a majority in interest of the Limited Partners (the
“Liquidator”)) shall be responsible for overseeing the winding up and
dissolution of the Partnership and shall take full account of the Partnership’s
liabilities and property and the Partnership property shall be liquidated as
promptly as is consistent with obtaining the fair value thereof, and the
proceeds therefrom (which may, to the extent determined by the General Partner,
include equity or other securities of the General Partner or any other entity)
shall be applied and distributed in the following order:

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

 

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

(3) The balance, if any, to the Partners in accordance with Section 5.01B.

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

B. Notwithstanding the provisions of Section 13.02.A hereof that require
liquidation of the assets of the Partnership, but subject to the order of
priorities set forth therein, if prior to or upon dissolution of the Partnership
the Liquidator determines that an immediate sale of part or all of the
Partnership’s assets would be impractical or would cause undue loss to the
Partners, the Liquidator may, in its sole and absolute discretion, defer for a
reasonable time the liquidation of any assets except those necessary to satisfy
liabilities of the Partnership (including to those Partners as creditors) and/or
distribute to the Partners, in lieu of cash, as tenants in common and in
accordance with the provisions of Section 13.02.A hereof, undivided interests in
such Partnership assets as the Liquidator deems not suitable for liquidation.
Any such distributions in kind shall be made only if, in the good faith judgment
of the Liquidator, such distributions in kind are in the best interest of the
Partners, and shall be subject to such conditions relating to the disposition
and management of such properties as the Liquidator deems reasonable and
equitable and to any agreements governing the operation of such properties at
such time. The Liquidator shall determine the fair market value of any property
distributed in kind using such reasonable method of valuation as it may adopt.

C. In the event that the Partnership is “liquidated” within the meaning of
Regulations Section 1.704-1(b)(2)(ii)(g), distributions shall be made pursuant
to this Article XIII to the Partners and Assignees that have positive Capital
Accounts in compliance with Regulations Section 1.704-1(b)(2)(ii)(b)(2) to the
extent of, and in proportion to, positive Capital Account balances. Subject to
Section 13.02.D. below, if any Partner has a deficit balance in its Capital
Account (after giving effect to all contributions, distributions and allocations
for all taxable years, including the year during which such liquidation occurs)
(a “Capital Account Deficit”), such Partner shall not be required to make any
contribution to the capital of the Partnership with respect to a Capital Account
Deficit, if any, of such Partner, and such Capital Account Deficit shall not be
considered a debt owed to the Partnership or any other person for any purpose
whatsoever.

D. Notwithstanding the provisions of Section 13.02.C, (i) if the General Partner
has a Capital Account Deficit, the General Partner shall contribute to the
capital of the Partnership the amount necessary to restore such Capital Account
Deficit balance to zero; (ii) if an Obligated Partner has a Capital Account
Deficit, such Obligated Partner shall be obligated to make a contribution to the
Partnership with respect to any such Capital Account Deficit balance upon a
liquidation of the Partnership or a “liquidation” of such Partner’s Partnership
Interest within the meaning of Regulations Section 1.704-1(b)(2)(ii)(g) (which
term shall include a redemption by the Partnership of such Obligated Partner’s
Partnership Interest upon exercise of the Redemption Right) in an amount equal
to the lesser of such Capital Account Deficit balance or such Obligated
Partner’s Protected Amount; and (iii) the second sentence of Section 13.02.C
shall not apply with respect to any other Partner to the extent, but only to the
extent, that such Partner previously has agreed in writing, with the consent of
the General Partner, to undertake an express obligation to restore all or any
portion of a deficit that may exist in its Capital Account upon a liquidation of
the Partnership. Solely for purposes of determining an Obligated Partner’s
Capital Account balance upon a liquidation of such Partner’s Partnership
Interest, the General Partner

 

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shall redetermine the Carrying Value of the Partnership’s assets on such date
based upon the principles set forth in the definition of “Carrying Value” and
Exhibit B hereto, and shall take into account the Obligated Partner’s allocable
share of any unrealized gain or unrealized loss resulting from such adjustment
in determining the Obligated Partner’s Capital Account balance. No Partner shall
have the right to become an Obligated Partner, to increase its Protected Amount,
or otherwise to agree to restore any portion of any Capital Account Deficit
without the express written consent of the General Partner, in its sole and
absolute discretion. The General Partner shall not have the right to eliminate
or decrease any Partner’s Protected Amount without the written consent of such
Partner unless otherwise agreed to by the parties. Any contribution required of
a Partner under this Section 13.02.D shall be made on or before the later of
(i) the end of the Partnership Year in which the interest is liquidated or
(ii) the ninetieth (90th) day following the date of such liquidation. The
proceeds of any contribution to the Partnership made by an Obligated Partner
with respect to such Obligated Partner’s Capital Account Deficit balance shall
be treated as a Capital Contribution by such Obligated Partner and the proceeds
thereof shall be treated as assets of the Partnership to be applied as set forth
in Section 13.02.A.

E. In the sole and absolute discretion of the General Partner or the Liquidator,
a pro rata portion of the distributions that would otherwise be made to the
Partners pursuant to this Article XIII may be:

(i) distributed to a trust established for the benefit of the General Partner
and the Limited Partners for the purpose of liquidating Partnership assets,
collecting amounts owed to the Partnership, and paying any contingent or
unforeseen liabilities or obligations of the Partnership or of the General
Partner arising out of or in connection with the Partnership and/or Partnership
activities. The assets of any such trust shall be distributed to the General
Partner and the Limited Partners, from time to time, in the reasonable
discretion of the General Partner or the Liquidator, in the same proportions and
amounts as would otherwise have been distributed to the General Partner and the
Limited Partners pursuant to this Agreement; or

(ii) withheld or escrowed to provide a reasonable reserve for Partnership
liabilities (contingent or otherwise) and to reflect the unrealized portion of
any installment obligations owed to the Partnership, provided that such withheld
or escrowed amounts shall be distributed to the General Partner and Limited
Partners in the manner and order of priority set forth in Section 13.02.A hereof
as soon as practicable.

Section 13.03. Deemed Distribution and Recontribution

Notwithstanding any other provision of this Article XIII, in the event the
Partnership is deemed liquidated within the meaning of Regulations
Section 1.704-1(b)(2)(ii)(g) but no Liquidating Event has occurred, the
Partnership’s property shall not be liquidated, the Partnership’s liabilities
shall not be paid or discharged and the Partnership’s affairs shall not be wound
up. Instead, for federal income tax purposes and for purposes of maintaining
Capital Accounts pursuant to Exhibit B hereto, the Partnership shall be deemed
to have distributed its assets in kind to the General Partner and Limited
Partners, who shall be deemed to have assumed and taken such assets subject to
all Partnership liabilities, all in accordance with their respective Capital
Accounts. Immediately thereafter, the General Partner and Limited Partners shall
be deemed to have recontributed the Partnership assets in kind to the
Partnership, which shall be deemed to have assumed and taken such assets subject
to all such liabilities.

Section 13.04. Rights of Limited Partners

Except as otherwise provided in this Agreement, each Limited Partner shall look
solely to the assets of the Partnership for the return of its Capital
Contributions and shall have no right or power to

 

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

Section 13.05. Notice of Dissolution

In the event a Liquidating Event occurs or an event occurs that would, but for
provisions of an election or objection by one or more Partners pursuant to
Section 13.01 above, result in a dissolution of the Partnership, the General
Partner shall, within thirty (30) days thereafter, provide written notice
thereof to each of the Partners and to all other parties with whom the
Partnership regularly conducts business (as determined in the discretion of the
General Partner) and shall publish notice thereof in a newspaper of general
circulation in each place in which the Partnership regularly conducts
business(as determined in the discretion of the General Partner).

Section 13.06. Cancellation of Certificate of Limited Partnership

Upon the completion of the liquidation of the Partnership cash and property as
provided in Section 13.02 above, the Partnership shall be terminated and the
Certificate and all qualifications of the Partnership as a foreign limited
partnership in jurisdictions other than the State of Delaware shall be canceled
and such other actions as may be necessary to terminate the Partnership shall be
taken.

Section 13.07. Reasonable Time for Winding Up

A reasonable time shall be allowed for the orderly winding up of the business
and affairs of the Partnership and the liquidation of its assets pursuant to
Section 13.02 above, in order to minimize any losses otherwise attendant upon
such winding-up, and the provisions of this Agreement shall remain in effect
among the Partners during the period of liquidation.

Section 13.08. Waiver of Partition

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

Section 13.09. Liability of Liquidator

The Liquidator shall be indemnified and held harmless by the Partnership in the
same manner and to the same degree as an Indemnitee may be indemnified pursuant
to Section 7.07 hereof.

ARTICLE XIV

AMENDMENT OF PARTNERSHIP AGREEMENT; MEETINGS

Section 14.01. Amendments

A. General. Amendments to this Agreement may be proposed by the General Partner
or by any Limited Partners holding twenty-five percent (25%) or more of the
Partnership Interests. Following such proposal (except an amendment pursuant to
Section 14.01.B below), the General Partner shall submit any proposed amendment
to the Limited Partners. The General Partner shall seek the written vote of the
Partners on the proposed amendment or shall call a meeting to vote thereon and
to transact any other business that it may deem appropriate. For purposes of
obtaining a written vote, the General Partner may require a response within a
reasonable specified time, but not less than fifteen (15) days, and failure to
respond in such time period shall constitute a vote which is consistent with the
General Partner’s

 

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recommendation with respect to the proposal. Except as provided in
Section 14.01.B, 14.01.C or 14.01.D below, a proposed amendment shall be adopted
and be effective as an amendment hereto if it is approved by the General Partner
and it receives the Consent of Partners holding a majority of the Percentage
Interests of the Limited Partners (including Limited Partnership Interests held
by the General Partner).

B. Amendments Not Requiring Limited Partner Approval. Notwithstanding
Section 14.01.A or Section 14.01.C hereof, the General Partner shall have the
power, without the Consent of the Limited Partners, to amend this Agreement as
may be required to facilitate or implement any of the following purposes:

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

(2) to reflect the admission, substitution, termination or withdrawal of any
Partner in accordance with this Agreement;

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

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

(5) to adjust the terms hereof to reflect any Specially Distributed Assets, as
contemplated in Section 7.05.A hereof; and

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

The General Partner shall notify the Limited Partners when any action under this
Section 14.01.B is taken in the next regular communication to the Limited
Partners.

C. Amendments Requiring Limited Partner Approval (Excluding General Partner).
Notwithstanding Section 14.01.A above, without the Consent of the Limited
Partners (not including Limited Partnership Interests held by the General
Partner), the General Partner shall not amend Section 4.02.A, Section 7.01.A
(second sentence only), Section 7.05, Section 7.06, Section 7.08, Section 11.02,
Section 13.01, this Section 14.01.C or Section 14.02.

D. Other Amendments Requiring Certain Limited Partner Approval. Notwithstanding
anything in this Section 14.01 to the contrary, this Agreement shall not be
amended with respect to any Partner adversely affected without the Consent of
such Partner adversely affected if such amendment would (i) convert a Limited
Partner’s interest in the Partnership into a general partner’s interest,
(ii) modify the limited liability of a Limited Partner, (iii) amend
Section 7.11.A, (iv) amend Article V, Article VI, or Section 13.02.A(3) (except
as permitted pursuant to Sections 4.02, 5.04, 6.02 and 14.01(B)(3)), (v) amend
Section 8.06 or any defined terms set forth in Article I that relate to the
Redemption Right (except as permitted in Section 8.06.E), or (vi) amend this
Section 14.01.D. Moreover,

 

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this Agreement may be amended by the General Partner to provide that certain
Limited Partners have the obligation, upon liquidation of their interests in the
Partnership (within the meaning of Regulations Section 1.704-1(b)(2)(ii)(g)), to
restore to the Partnership the amounts of their negative Capital Account
balances, if any, for the benefit of creditors of the Partnership or Partners
with positive Capital Account balances or both, together with any necessary
corresponding amendments (including corresponding amendments to Sections 6.01.A,
6.01.B and Exhibit C), with the consent of only such Limited Partners and of any
other Limited Partners already subject to such a restoration obligation whose
restoration obligation may be affected by such amendment.

E. Amendment and Restatement of Exhibit A Not An Amendment. Notwithstanding
anything in this Article XIV or elsewhere in this Agreement to the contrary, any
amendment and restatement of Exhibit A hereto by the General Partner to reflect
events or changes otherwise authorized or permitted by this Agreement, whether
pursuant to Section 7.01.A(20) hereof or otherwise, shall not be deemed an
amendment of this Agreement and may be done at any time and from time to time,
as necessary by the General Partner without the Consent of the Limited Partners.

Section 14.02. Meetings of the Partners

A. General. Meetings of the Partners may be called by the General Partner and
shall be called upon the receipt by the General Partner of a written request by
Limited Partners holding twenty-five percent (25%) or more of the Partnership
Interests. The notice of meeting shall state the nature of the business to be
transacted. Notice of any such meeting shall be given to all Partners not less
than seven (7) days nor more than thirty (30) days prior to the date of such
meeting. Partners may vote in person or by proxy at such meeting. Whenever the
vote or Consent of Partners is permitted or required under this Agreement, such
vote or Consent may be given at a meeting of Partners or may be given in
accordance with the procedure prescribed in Section 14.01.A above. Except as
otherwise expressly provided in this Agreement, the Consent of holders of a
majority of the Class A Percentage Interests held by Limited Partners (including
Limited Partnership Interests held by the General Partner), voting as a single
class, shall control.

B. Actions Without a Meeting. Any action required or permitted to be taken at a
meeting of the Partners may be taken without a meeting if a written consent
setting forth the action so taken is signed by a majority of the Percentage
Interests of the Partners (or such other percentage as is expressly required by
this Agreement). Such consent may be in one instrument or in several
instruments, and shall have the same force and effect as a vote of a majority of
the Percentage Interests of the Partners (or such other percentage as is
expressly required by this Agreement). Such consent shall be filed with the
General Partner. An action so taken shall be deemed to have been taken at a
meeting held on the effective date so certified.

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

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

 

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ARTICLE XV

GENERAL PROVISIONS

Section 15.01. Addresses and Notice

Any notice, demand, request or report required or permitted to be given or made
to a Partner or Assignee under this Agreement shall be in writing and shall be
deemed given or made when delivered in person or when sent by first class United
States mail or by other means of written communication to the Partner or
Assignee at the address set forth in Exhibit A hereto or such other address as
the Partners shall notify the General Partner in writing.

Section 15.02. 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” and “Sections” are
to Articles and Sections of this Agreement.

Section 15.03. Pronouns and Plurals

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

Section 15.04. Further Action

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

Section 15.05. Binding Effect

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

Section 15.06. Creditors

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

Section 15.07. Waiver

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

Section 15.08. Counterparts

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

 

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Section 15.09. Applicable Law

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

Section 15.10. Invalidity of Provisions

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

Section 15.11. Power of Attorney

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

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

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

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

B. Irrevocable Nature. The foregoing power of attorney is hereby declared to be
irrevocable and a power coupled with an interest, in recognition of the fact
that each of the Partners will be relying upon the power of the General Partner
or any Liquidator to act as contemplated by this Agreement in any filing or
other action by it on behalf of the Partnership, and it shall survive and not be
affected by the

 

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subsequent Incapacity of any Limited Partner or Assignee and the transfer of all
or any portion of such Limited Partner’s or Assignee’s Partnership Units and
shall extend to such Limited Partner’s or Assignee’s heirs, successors, assigns
and personal representatives. Each such Limited Partner or Assignee hereby
agrees to be bound by any representation made by the General Partner or any
Liquidator, acting in good faith pursuant to such power of attorney; and each
such Limited Partner or Assignee hereby waives any and all defenses which may be
available to contest, negate or disaffirm the action of the General Partner or
any Liquidator, taken in good faith under such power of attorney. Each Limited
Partner or Assignee shall execute and deliver to the General Partner or the
Liquidator, within fifteen (15) days after receipt of the General Partner’s or
Liquidator’s request therefor, such further designation, powers of attorney and
other instruments as the General Partner or the Liquidator, as the case may be,
deems necessary to effectuate this Agreement and the purposes of the
Partnership.

Section 15.12. Entire Agreement

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

Section 15.13. No Rights as Stockholders

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

Section 15.14. Limitation to Preserve REIT Status

To the extent that any amount paid or credited to the General Partner or its
officers, directors, employees or agents pursuant to Section 7.04 or
Section 7.07 hereof would constitute gross income to the General Partner for
purposes of Section 856(c)(2) or 856(c)(3) of the Code (a “General Partner
Payment”) then, notwithstanding any other provision of this Agreement, the
amount of such General Partner Payments for any fiscal year shall not exceed the
lesser of:

(i) an amount equal to the excess, if any, of (a) 4.20% of the General Partner’s
total gross income (but not including the amount of any General Partner
Payments) for the fiscal year which is described in subsections (A) though
(H) of Section 856(c)(2) of the Code over (b) the amount of gross income (within
the meaning of Section 856(c)(2) of the Code) derived by the General Partner
from sources other than those described in subsections (A) through (H) of
Section 856(c)(2) of the Code (but not including the amount of any General
Partner Payments); or

(ii) an amount equal to the excess, if any of (a) 25% of the General Partner’s
total gross income (but not including the amount of any General Partner
Payments) for the fiscal year which is described in subsections (A) through
(I) of Section 856(c)(3) of the Code over (b) the amount of gross income (within
the meaning of Section 856(c)(3) of the Code) derived by the General Partner
from sources other than those described in subsections (A) through (I) of
Section 856(c)(3) of the Code (but not including the amount of any General
Partner Payments);

provided, however, that General Partner Payments in excess of the amounts set
forth in subparagraphs (i) and (ii) above may be made if the General Partner, as
a condition precedent, obtains an opinion of tax counsel that the receipt of
such excess amounts would not adversely affect the General Partner’s ability to

 

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qualify as a REIT. To the extent General Partner Payments may not be made in a
year due to the foregoing limitations, such General Partner Payments shall carry
over and be treated as arising in the following year, provided, however, that
such amounts shall not carry over for more than five years, and if not paid
within such five year period, shall expire; provided, further, that (i) as
General Partner Payments are made, such payments shall be applied first to
carryover amounts outstanding, if any, and (ii) with respect to carryover
amounts for more than one Partnership Year, such payments shall be applied to
the earliest Partnership Year first.

 

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

 

GENERAL PARTNER: CB RICHARD ELLIS REALTY TRUST,
a Maryland real estate investment trust By:  

/s/ Jack Cuneo

Name:   Jack Cuneo Title:   President and Chief Executive Officer LIMITED
PARTNER: CBRE REIT HOLDINGS LLC By:   CB Richard Ellis Investors, L.L.C.   as
managing member   By:  

/s/ Jack Cuneo

  Name:   Jack Cuneo   Title:   Managing Director