Exhibit 10.2
 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
AMENDED AND RESTATED
 
LIMITED PARTNERSHIP AGREEMENT
 
OF
 
HINES GLOBAL REIT PROPERTIES LP
 
A DELAWARE LIMITED PARTNERSHIP
 
April 2, 2012
 
 
 
 
 
 
 
 
 
 
 
 
 
 

 
 
 
 

TABLE OF CONTENTS
 
Page
 
 
ARTICLE 1 DEFINED
TERMS                                                                                                                                          
 
ARTICLE 2 PARTNERSHIP FORMATION AND
IDENTIFICATION                                                                                                                                          
 
2.1
Formation
 

 
2.2
Name, Office and Registered Agent
 

 
2.3
Partners
 

 
2.4
Term and Dissolution
 

 
2.5
Filing of Certificate and Perfection of Limited Partnership
 

 
2.6
Certificates Describing Partnership Units and Special OP Units
 

 
ARTICLE 3 BUSINESS OF THE
PARTNERSHIP                                                                                                                                          
 
ARTICLE 4 CAPITAL CONTRIBUTIONS AND
ACCOUNTS                                                                                                                                          
 
4.1
Capital Contributions
 

 
4.2
Additional Capital Contributions and Issuances of Additional Partnership
Interests

 
4.3
Additional Funding
 

 
4.4
Capital Accounts
 

 
4.5
Percentage Interests
 

 
4.6
No Interest On Contributions
 

 
4.7
Return Of Capital Contributions
 

 
4.8
No Third Party Beneficiary
 

 
ARTICLE 5 PROFITS AND LOSSES;
DISTRIBUTIONS                                                                                                                                          
 
5.1
Allocation of Profit and Loss.
 

 
5.2
Distribution of Cash
 

 
5.3
REIT Distribution Requirements
 

 
5.4
No Right to Distributions in Kind
 

 
5.5
Limitations on Return of Capital Contributions
 

 
5.6
Asset Acquisition Distributions
 

 
5.7
Distributions Upon Liquidation
 

 
5.8
Substantial Economic Effect
 

 
ARTICLE 6 RIGHTS, OBLIGATIONS AND POWERS OF THE GENERAL PARTNER
 
6.1
Management of the Partnership.
 

 
6.2
Delegation of Authority
 

 
6.3
Indemnification and Exculpation of Indemnitees
 

 
6.4
Liability of the General Partner
 

 
6.5
Reimbursement of General Partner
 

 
6.6
Outside Activities
 

 
6.7
Employment or Retention of Affiliates
 

 
6.8
General Partner Participation
 

 
6.9
Title to Partnership Assets
 

 
6.10
Miscellaneous
 

 
6.11
No Duplication of Fees or Expenses
 

 
ARTICLE 7 CHANGES IN GENERAL
PARTNER                                                                                                                                          
 
7.1
Transfer of the General Partner’s Partnership Interest
 

 
7.2
Admission of a Substitute or Additional General Partner
 

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

 
7.4
Removal of a General Partner
 

 
 
 

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

 
ARTICLE 8 RIGHTS AND OBLIGATIONS OF THE LIMITED
PARTNERS                                                                                                                                          
 
8.1
Management of the Partnership
 

 
8.2
Power of Attorney
 

 
8.3
Limitation on Liability of Limited Partners
 

 
8.4
Redemption Right
 

 
8.5
Redemption or Conversion of Special OP Units and Partnership Units owned by the
Advisor or its Affiliates.

 
ARTICLE 9 TRANSFERS OF LIMITED PARTNERSHIP
INTERESTS                                                                                                                                          
 
9.1
Purchase for Investment
 

 
9.2
Restrictions on Transfer of Limited Partnership Interests
 

 
9.3
Admission of Substitute Limited Partner
 

 
9.4
Rights of Assignees of Partnership Interests
 

 
9.5
Effect of Bankruptcy, Death, Incompetence or Termination of a Limited Partner

 
9.6
Joint Ownership of Interests
 

 
ARTICLE 10 BOOKS AND RECORDS; ACCOUNTING; TAX
MATTERS                                                                                                                                          
 
10.1
Books and Records
 

 
10.2
Custody of Partnership Funds; Bank Accounts
 

 
10.3
Fiscal and Taxable Year
 

 
10.4
Annual Tax Information and Report
 

 
10.5
Tax Matters Partner; Tax Elections; Special Basis Adjustments
 

 
10.6
Reports to Limited Partners
 

 
10.7
Safe Harbor Election
 

 
ARTICLE 11 AMENDMENT OF AGREEMENT;
MERGER                                                                                                                                          
 
ARTICLE 12 GENERAL
PROVISIONS                                                                                                                                          
 
12.1
Notices
 

 
12.2
Survival of Rights
 

 
12.3
Additional Documents
 

 
12.4
Severability
 

 
12.5
Entire Agreement
 

 
12.6
Pronouns and Plurals
 

 
12.7
Headings
 

 
12.8
Counterparts
 

 
12.9
Governing Law
 

EXHIBITS
 
EXHIBIT A — Partners, Capital Contributions and Percentage Interests
EXHIBIT B — Notice of Exercise of Redemption Right
 

 

 

 
 

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

 

AMENDED AND RESTATED LIMITED PARTNERSHIP AGREEMENT
 
OF
 
HINES GLOBAL REIT PROPERTIES LP
 
This Amended and Restated Limited Partnership Agreement (this “Agreement”) is
entered into as of the 2nd day of April, 2012, between Hines Global REIT, Inc.,
as the General Partner, Hines Global REIT Associates Limited Partnership, as a
Limited Partner, and the Limited Partners set forth on Exhibit A attached
hereto. Capitalized terms used herein but not otherwise defined shall have the
meanings given them in Article 1.
 
AGREEMENT
 
WHEREAS, the General Partner has elected to be treated as a real estate
investment trust under the Internal Revenue Code of 1986, as amended;
 
WHEREAS, Hines Global REIT Properties LP (the “Partnership”), was formed on
January 7, 2009 as a limited partnership under the laws of the State of
Delaware, pursuant to a Certificate of Limited Partnership filed with the Office
of the Secretary of State of the State of Delaware on January 7, 2009;
 
WHEREAS, the General Partner and the original Limited Partner listed on Exhibit
A hereto entered into the Limited Partnership Agreement of the Partnership on
August 3, 2009 and the Partners now desire to amend and restate the Limited
Partnership Agreement of the Partnership;
 
WHEREAS, the General Partner desires to conduct its current and future business
primarily through the Partnership;
 
WHEREAS, in furtherance of the foregoing, the General Partner desires to
contribute certain assets to the Partnership from time to time;
 
WHEREAS, in exchange for the General Partner’s contribution of assets, the
parties desire that the Partnership issue Partnership Units to the General
Partner in accordance with the terms of this Agreement;
 
WHEREAS, the Limited Partner has contributed and it and future Limited Partners
may contribute certain of their property to the Partnership in exchange for
Partnership Units or the Special OP Units in accordance with the terms of this
Agreement;
 
WHEREAS, in furtherance of the Partnership’s business, the Partnership will
acquire Properties and other assets from time to time by means of the
contribution of such Properties or other assets to the Partnership by the owners
thereof in exchange for Partnership Units; and
 
WHEREAS, the parties hereto wish to establish herein their respective rights and
obligations in connection with all of the foregoing and certain other matters;
 
NOW, THEREFORE, in consideration of the foregoing, of mutual covenants between
the parties hereto, and of other good and valuable consideration, the receipt
and sufficiency of which are hereby acknowledged, the parties hereto agree as
follows:
 
ARTICLE 1
 
DEFINED TERMS
 
The following defined terms used in this Agreement shall have the meanings
specified below:
 
“ACT” means the Delaware Revised Uniform Limited Partnership Act, as it may be
amended from time to time.
 
“ADDITIONAL FUNDS” has the meaning set forth in Section 4.3 hereof.
 
“ADDITIONAL SECURITIES” means any additional REIT Shares (other than REIT Shares
issued in connection with a redemption pursuant to Section 8.4 hereof or REIT
Shares issued pursuant to a distribution reinvestment plan of the General
Partner) or rights, options, warrants or convertible or exchangeable securities
containing the right to subscribe for or purchase REIT Shares, as set forth in
Section 4.2(a)(ii).
 
“ADMINISTRATIVE EXPENSES” means (i) all administrative and operating costs and
expenses incurred by the Partnership, (ii) those administrative costs and
expenses of the General Partner, including any salaries or other payments to
directors, officers or employees of the General Partner, and any accounting and
legal expenses of the General Partner, which expenses, the Partners have agreed,
are expenses of the Partnership and not the General Partner, (iii) costs and
expenses relating to the formation and continuity of existence and operation of
the General Partner and any Subsidiaries thereof (which Subsidiaries shall, for
purposes hereof, be included within the definition of General Partner),
including taxes, fees and assessments associated therewith, (iv) costs and
expenses relating to any Offering and registration of securities by the General
Partner and all statements, reports, fees and expenses incidental thereto,
including, without limitation, underwriting discounts and selling commissions
applicable to any such Offering, and any costs and expenses associated with any
claims made by any holders of such securities or any underwriters or placement
agents thereof, (v) costs and expenses associated with any repurchase of any
securities by the General Partner, (vi) costs and expenses associated with the
preparation and filing of any periodic or other reports and communications by
the General Partner under federal, state or local laws or regulations, including
filings with the Commission, (vii) costs and expenses associated with compliance
by the General Partner with laws, rules and regulations promulgated by any
regulatory body, including the Commission and any securities exchange, (viii)
costs and expenses associated with any 401(k) plan, incentive plan, bonus plan
or other plan providing for compensation for the employees of the General
Partner, (ix) costs and expenses incurred by the General Partner relating to any
issuing or redemption of Partnership Interests and (x) all other operating or
administrative costs of the General Partner incurred in the ordinary course of
its business on behalf of or in connection with the Partnership; provided,
however, that Administrative Expenses shall not include any administrative costs
and expenses incurred by the General Partner that are attributable to Properties
or partnership interests in a Subsidiary Partnership that are owned by the
General Partner directly.
 
“ADVISOR” or “ADVISORS” has the meaning set forth in the Advisory Agreement.
 
“ADVISORY AGREEMENT” means the agreement between the General Partner, the
Partnership and the Advisor pursuant to which the Advisor will direct or perform
the day-to-day business affairs of the General Partner.
 
“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.
 
“AGREED VALUE” means the fair market value of a Partner’s non-cash Capital
Contribution as of the date of contribution as agreed to by such Partner and the
General Partner. The names and addresses of the Partners, number of Partnership
Units issued to each Partner, and the Agreed Value of any non-cash Capital
Contributions as of the date of contribution are set forth on Exhibit A.
 
“AGREEMENT” has the meaning set forth in the preamble.
 
“APPLICABLE PERCENTAGE” has the meaning set forth in Section 8.4(b) hereof.
 
“ASSET” means any Property, Mortgage, other debt or other investment (other than
investments in bank accounts, money market funds or other current assets) owned
by the General Partner, directly or indirectly through one or more of its
Affiliates.
 
“ASSET ACQUISITION CONTRIBUTION” has the meaning set forth in Section 4.2(a)(ii)
hereof.
 
“ASSET ACQUISITION DISTRIBUTION” has the meaning set forth in Section 5.6
hereof.
 
“ASSET ACQUISITION REDEMPTION” has the meaning set forth in Section 8.4 hereof.
 
“BUSINESS DAY” means any day on which the New York Stock Exchange is open for
trading.
 
“CAPITAL ACCOUNT” has the meaning set forth in Section 4.4 hereof.
 
“CAPITAL CONTRIBUTION” means the total amount of cash, cash equivalents, and the
Agreed Value of any Property or other asset (other than cash) contributed or
agreed to be contributed, as the context requires, to the Partnership by each
Partner pursuant to the terms of this Agreement. Any reference to the Capital
Contribution of a Partner shall include the Capital Contribution made by a
predecessor holder of the Partnership Interest of such Partner.  Any reference
to Capital Contribution shall not include any amounts contributed to the
Partnership which are generated from the operation or sale of a General Partner
Property acquired in whole or in part with the proceeds from an Asset
Acquisition Distribution, an Asset Acquisition Redemption or an Asset
Acquisition Contribution.
 
“CARRYING VALUE” means, with respect to any asset of the Partnership, the
asset’s adjusted net basis for federal income tax purposes or, in the case of
any asset contributed to the Partnership, the fair market value of such asset at
the time of contribution, reduced by any amounts attributable to the inclusion
of liabilities in basis pursuant to Section 752 of the Code, except that the
Carrying Values of all assets may, at the discretion of the General Partner, be
adjusted to equal their respective fair market values (as determined by the
General Partner), in accordance with the rules set forth in Regulations Section
1.704-1(b)(2)(iv)(f), as provided for in Section 4.4. In the case of any asset
of the Partnership that has a Carrying Value that differs from its adjusted tax
basis, the Carrying Value shall be adjusted by the amount of depreciation,
depletion and amortization calculated for purposes of the allocations of net
profit and net loss pursuant to Article 5 hereof rather than the amount of
depreciation, depletion and amortization determined for federal income tax
purposes.
 
“CASH AMOUNT” means an amount of cash per Partnership Unit equal to the lesser
of (i) the Value of the REIT Shares Amount on the date of receipt by the General
Partner of a Notice of Redemption or (ii) the applicable Redemption Price
determined by the General Partner.
 
“CERTIFICATE” means any instrument or document that is required under the laws
of the State of Delaware, or any other jurisdiction in which the Partnership
conducts business, to be signed and sworn to by the Partners of the Partnership
(either by themselves or pursuant to the power-of-attorney granted to the
General Partner in Section 8.2 hereof) and filed for recording in the
appropriate public offices within the State of Delaware or such other
jurisdiction to perfect or maintain the Partnership as a limited partnership, to
effect the admission, withdrawal, or substitution of any Partner of the
Partnership, or to protect the limited liability of the Limited Partners as
limited partners under the laws of the State of Delaware or such other
jurisdiction.
 
“CHARTER” means the Amended and Restated Articles of Incorporation of the
General Partner filed with the Maryland State Department of Assessments and
Taxation, as amended or restated from time to time.
 
“CODE” means the Internal Revenue Code of 1986, as amended, and as hereafter
amended from time to time. Reference to any particular provision of the Code
shall mean that provision in the Code at the date hereof and any successor
provision of the Code.
 
“COMMISSION” means the U.S. Securities and Exchange Commission.
 
“CONVERSION FACTOR” means 1.0, provided that in the event that the General
Partner (i) declares or pays a dividend on its outstanding REIT Shares in REIT
Shares or makes a distribution to all holders of its outstanding REIT Shares in
REIT Shares, (ii) subdivides its outstanding REIT Shares, or (iii) combines its
outstanding REIT Shares into a smaller number of REIT Shares, the Conversion
Factor shall be adjusted by multiplying the Conversion Factor by a fraction, the
numerator of which shall be the number of REIT Shares issued and outstanding on
the record date for such dividend, distribution, subdivision or combination
(assuming for such 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 REIT Shares (determined without the above assumption)
issued and outstanding on such date and, provided further, that in the event
that an entity other than an Affiliate of the General Partner shall become
General Partner pursuant to any merger, consolidation or combination of the
General Partner with or into another entity (the “Successor Entity”), the
Conversion Factor shall be adjusted by multiplying the Conversion Factor by the
number of shares of the Successor Entity into which one REIT Share is converted
pursuant to such merger, consolidation or combination, determined as of the date
of such merger, consolidation or combination. Any adjustment to the Conversion
Factor shall become effective immediately after the effective date of such event
retroactive to the record date, if any, for such event; provided, however, that
if the General Partner receives a Notice of Redemption after the record date,
but prior to the effective date of such dividend, distribution, subdivision or
combination, the Conversion Factor shall be determined as if the General Partner
had received the Notice of Redemption immediately prior to the record date for
such dividend, distribution, subdivision or combination.
 
“DEFAULTING LIMITED PARTNER” has the meaning set forth in Section 5.2(c).
 
“DIRECTOR” has the meaning set forth in the Charter.
 
“EVENT OF BANKRUPTCY” as to any Person means the filing of a petition for relief
as to such Person as debtor or bankrupt under the Bankruptcy Code of 1978 or
similar provision of law of any jurisdiction (except if such petition is
contested by such Person and has been dismissed within 90 days); insolvency or
bankruptcy of such Person as finally determined by a court proceeding; filing by
such Person of a petition or application to accomplish the same or for the
appointment of a receiver or a trustee for such Person or a substantial part of
his assets; commencement of any proceedings relating to such Person as a debtor
under any other reorganization, arrangement, insolvency, adjustment of debt or
liquidation law of any jurisdiction, whether now in existence or hereinafter in
effect, either by such Person or by another, provided that if such proceeding is
commenced by another, such Person indicates his approval of such proceeding,
consents thereto or acquiesces therein, or such proceeding is contested by such
Person and has not been finally dismissed within 90 days.
 
“EXCEPTED HOLDER LIMIT” has the meaning set forth in the Charter.
 
“GENERAL PARTNER” means Hines Global REIT, Inc., a Maryland corporation, and any
Person who becomes a substitute or additional General Partner as provided
herein, and any of their successors as General Partner.
 
“GENERAL PARTNER LOAN” has the meaning set forth in Section 5.2(c) hereof.
 
“GENERAL PARTNER PROPERTY” has the meaning set forth in Section 4.2(a)(i)
hereof.
 
“GENERAL PARTNER PROPERTY AMOUNTS” has the meaning set forth in Section
4.2(a)(ii) hereof.
 
“GENERAL PARTNERSHIP INTEREST” means a Partnership Interest held by the General
Partner that is a general partnership interest.
 
“INDEMNITEE” means the General Partner, the Advisor or any of its Affiliates or
any employee, director or Affiliate of the General Partner or the Partnership.
 
“INDEPENDENT DIRECTORS” has the meaning set forth in the Charter.
 
“JOINT VENTURE” means those joint venture, co-investment, co-ownership or
partnership arrangements in which the General Partner or any of its subsidiaries
is a co-venturer or general partner established to acquire or hold Assets.
 
“LIMITED PARTNER” means any Person named as a Limited Partner on Exhibit A
attached hereto (including without limitation the Special OP Unitholder), and
any Person who becomes a Substitute Limited Partner, in such Person’s capacity
as a Limited Partner in the Partnership.
 
“LIMITED PARTNERSHIP INTEREST” means the ownership interest of a Limited Partner
in the Partnership at any particular time, including the right of such Limited
Partner to any and all benefits to which such Limited Partner may be entitled as
provided in this Agreement and in the Act, together with the obligations of such
Limited Partner to comply with all the provisions of this Agreement and of such
Act.
 
“LISTING” means the listing of the REIT Shares on a national securities exchange
or the receipt by the holders of the REIT Shares of securities that are listed
on a national securities exchange. Upon such Listing, the REIT Shares shall be
deemed “Listed.”
 
“MORTGAGES” means, in connection with mortgage financing provided, invested in,
participated in or purchased, all of the notes, deeds of trust, security
interests or other evidences of indebtedness or obligations, which are secured
or collateralized by Real Property owned by the borrowers under such notes,
deeds of trust, security interests or other evidences of indebtedness or
obligations.
 
“NET SALES PROCEEDS” means, in the case of a transaction described in clause
(i)(A) of the definition of Sale, the proceeds of any such transaction less the
amount of selling expenses incurred by or on behalf of the General Partner or
the Partnership, including all real estate commissions, closing costs and legal
fees and expenses. In the case of a transaction described in clause (i)(B) of
such definition, Net Sales Proceeds means the proceeds of any such transaction
less the amount of selling expenses incurred by or on behalf of the General
Partner or the Partnership, including any legal fees and expenses and other
selling expenses incurred in connection with such transaction. In the case of a
transaction described in clause (i)(C) of such definition, Net Sales Proceeds
means the proceeds of any such transaction actually distributed to the General
Partner or the Partnership from the Joint Venture less the amount of any selling
expenses, including legal fees and expenses incurred by or on behalf of the
General Partner (other than those paid by the Joint Venture). In the case of a
transaction or series of transactions described in clause (i)(D) of the
definition of Sale, Net Sales Proceeds means the proceeds of any such
transaction (including the aggregate of all payments under a Mortgage or in
satisfaction thereof other than regularly scheduled interest payments) less the
amount of selling expenses incurred by or on behalf of the General Partner or
the Partnership, including all commissions, closing costs and legal fees and
expenses. In the case of a transaction described in clause (i)(E) of such
definition, Net Sales Proceeds means the proceeds of any such transaction less
the amount of selling expenses incurred by or on behalf of the General Partner
or the Partnership, including any legal fees and expenses and other selling
expenses incurred in connection with such transaction. In the case of a
transaction described in clause (ii) of the definition of Sale, Net Sales
Proceeds means the proceeds of such transaction or series of transactions less
all amounts generated thereby which are reinvested in one or more Assets within
180 days thereafter and less the amount of any real estate commissions, closing
costs, and legal fees and expenses and other selling expenses incurred by or
allocated to the General Partner or the Partnership in connection with such
transaction or series of transactions. Net Sales Proceeds shall also include any
amounts that the General Partner determines, in its discretion, to be
economically equivalent to proceeds of a Sale. Net Sales Proceeds shall not
include any reserves established by the General Partner in its sole discretion.
 
“NOTICE OF REDEMPTION” means the Notice of Exercise of Redemption Right
substantially in the form attached as Exhibit B hereto.
 
“OFFER” has the meaning set forth in Section 7.1(c)(ii) hereof.
 
“OFFERING” means the offer and sale of REIT Shares to the public.
 
“OP UNITHOLDERS” means all holders of Partnership Interests other than the
Special OP Unitholder in its capacity as holder of the Special OP Unit.
 
“ORIGINAL LIMITED PARTNER” means the Limited Partners designated as “Original
Limited Partners” on Exhibit A hereto.
 
“OWNERSHIP LIMIT” has the meaning set forth in the Charter.
 
“PARTNER” means any General Partner or Limited Partner.
 
“PARTNER NONRECOURSE DEBT MINIMUM GAIN” has the meaning set forth in Regulations
Section 1.704-2(i). A Partner’s share of Partner Nonrecourse Debt Minimum Gain
shall be determined in accordance with Regulations Section 1.704-2(i)(5).
 
“PARTNERSHIP” has the meaning set forth in the recitals.
 
“PARTNERSHIP INTEREST” means an ownership interest in the Partnership held by
either a Limited Partner or the General Partner and includes any and all
benefits to which the holder of such a Partnership Interest may be entitled as
provided in this Agreement, together with all obligations of such Person to
comply with the terms and provisions of this Agreement.
 
“PARTNERSHIP LOAN” has the meaning set forth in Section 5.2(c) hereof.
 
“PARTNERSHIP MINIMUM GAIN” has the meaning set forth in Regulations Section
1.704-2(d). In accordance with Regulations Section 1.704-2(d), the amount of
Partnership Minimum Gain is determined by first computing, for each Partnership
nonrecourse liability, any gain the Partnership would realize if it disposed of
the property subject to that liability for no consideration other than full
satisfaction of the liability, and then aggregating the separately computed
gains. A Partner’s share of Partnership Minimum Gain shall be determined in
accordance with Regulations Section 1.704-2(g)(1).
 
“PARTNERSHIP RECORD DATE” means the record date established by the General
Partner for the distribution of cash pursuant to Section 5.2 hereof, which
record date shall be the same as the record date established by the General
Partner for a distribution to its shareholders of some or all of its portion of
such distribution.
 
“PARTNERSHIP UNIT” means a fractional, undivided share of the Partnership
Interests of all Partners issued hereunder excluding the Partnership Interests
represented by Special OP Units. The allocation of Partnership Units among the
Partners shall be as set forth on Exhibit A, as such Exhibit may be amended from
time to time.
 
“PERCENTAGE INTEREST” means the percentage ownership interest in the Partnership
of each Partner, as determined by dividing the Partnership Units owned by a
Partner by the total number of Partnership Units then outstanding. The
Percentage Interest of each Partner shall be as set forth on Exhibit A, as such
Exhibit may be amended from time to time.
 
“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 from time to time, and a group to which an Excepted Holder Limit
applies.
 
“PROPERTY” means, as the context requires, all or a portion of each Real
Property acquired by the General Partner, directly or indirectly through joint
venture or co-ownership arrangements or other partnership or investment
entities.
 
“REAL PROPERTY” means land, rights in land (including leasehold interests), and
any buildings, structures, improvements, furnishings, fixtures and equipment
located on or used in connection with land and rights or interests in land.
 
“REDEMPTION” has the meaning set forth in Section 8.4(a).
 
“REDEMPTION PRICE” means the Value of the REIT Shares Amount on the date of
receipt by the General Partner of a Notice of Redemption discounted by any
applicable discount that would apply had the Partnership Units first been
converted to REIT Shares and then redeemed by the General Partner pursuant to
the General Partner’s existing redemption plan, if any (provided further, that
in determining any such discount, to the extent it is based on a holding period,
such REIT Shares will be deemed to have been held for the same period of time as
the related underlying Partnership Units had been held by the applicable
holder).
 
“REDEMPTION RIGHT” has the meaning set forth in Section 8.4(a) hereof.
 
“REGULATIONS” means the Federal income tax regulations promulgated under the
Code, as amended and as hereafter amended from time to time. Reference to any
particular provision of the Regulations shall mean that provision of the
Regulations on the date hereof and any successor provision of the Regulations.
 
“REGULATORY ALLOCATIONS” has the meaning set forth in Section 5.1(h) hereof.
 
“REIT” means a corporation, trust, association or other legal entity (other than
a real estate syndication) that qualifies as a real estate investment trust
under Sections 856 through 860 of the Code, and any successor or other
provisions of the Code relating to real estate investment trusts (including
provisions as to the attribution of ownership of beneficial interests therein)
and the regulations promulgated thereunder.
 
“REIT SHARE” means a common share of beneficial interest in the General Partner
(or successor entity, as the case may be).
 
“REIT SHARES AMOUNT” means a number of REIT Shares equal to the product of the
number of Partnership Units offered for exchange by a Tendering Party,
multiplied by the Conversion Factor as adjusted to and including the Specified
Redemption Date; provided that in the event the General Partner issues to all
holders of REIT Shares rights, options, warrants or convertible or exchangeable
securities entitling the shareholders to subscribe for or purchase REIT Shares,
or any other securities or property (collectively, the “rights”), and the rights
have not expired at the Specified Redemption Date, then the REIT Shares Amount
shall also include the rights issuable to a holder of the REIT Shares Amount of
REIT Shares on the record date fixed for purposes of determining the holders of
REIT Shares entitled to rights.
 
“RELATED PARTY” means, with respect to any Person, any other Person whose
ownership of shares of the General Partner’s capital stock would be attributed
to the first such Person under Code Section 544 (as modified by Code Section
856(h)(1)(B)).
 
“RESTRICTION NOTICE” has the meaning set forth in Section 8.4(e) hereof.
 
“SAFE HARBOR” means, the election described in the Safe Harbor Regulation,
pursuant to which a partnership and all of its partners may elect to treat the
fair market value of a partnership interest that is transferred in connection
with the performance of services as being equal to the liquidation value of that
interest.
 
“SAFE HARBOR ELECTION” means the election by a partnership and its partners to
apply the Safe Harbor, as described in the Safe Harbor Regulation and Internal
Revenue Service Notice 2005-43 , issued on May 19, 2005.
 
“SAFE HARBOR REGULATION” means Proposed Treasury Regulations Section 1.83-3(l)
issued on May 19, 2005.
 
“SALE” means (i) any transaction or series of transactions whereby: (A) the
General Partner or the Partnership directly or indirectly (except as described
in other subsections of this definition) sells, grants, transfers, conveys, or
relinquishes its ownership of any Property or portion thereof, including the
lease of any Property consisting of a building only, and including any event
with respect to any Property which gives rise to a significant amount of
insurance proceeds or condemnation awards; (B) the General Partner or the
Partnership directly or indirectly (except as described in other subsections of
this definition) sells, grants, transfers, conveys, or relinquishes its
ownership of all or substantially all of the interest of the General Partner or
the Partnership in any Joint Venture in which it is a co-venturer or partner;
(C) any Joint Venture directly or indirectly (except as described in other
subsections of this definition) in which the General Partner or the Partnership
as a co-venturer or partner sells, grants, transfers, conveys, or relinquishes
its ownership of any Property or portion thereof, including any event with
respect to any Property which gives rise to insurance claims or condemnation
awards; (D) the General Partner or the Partnership directly or indirectly
(except as described in other subsections of this definition) sells, grants,
conveys or relinquishes its interest in any Mortgage or portion thereof
(including with respect to any Mortgage, all payments thereunder or in
satisfaction thereof other than regularly scheduled interest payments) of
amounts owed pursuant to such Mortgage and any event which gives rise to a
significant amount of insurance proceeds or similar awards; or (E) the General
Partner or the Partnership directly or indirectly (except as described in other
subsections of this definition) sells, grants, transfers, conveys, or
relinquishes its ownership of any other Asset not previously described in this
definition or any portion thereof, but (ii) not including any transaction or
series of transactions specified in clause (i) (A) through (E) above in which
the proceeds of such transaction or series of transactions are reinvested by the
General Partner in one or more Assets within 180 days thereafter.
 
“SECURITIES ACT” means the Securities Act of 1933, as amended from time to time,
or any successor statute thereto. Reference to any provision of the Securities
Act shall mean such provision as in effect from time to time, as the same may be
amended, and any successor provision thereto, as interpreted by any applicable
regulations as in effect from time to time.
 
“SERVICE” means the United States Internal Revenue Service.
 
“SPECIAL OP UNITS” means units of a series of Partnership Interests, designated
as Special OP Units, issued pursuant to Section 4.1. The holder of the Special
OP Units shall have the same rights and preferences as a holder of a Partnership
Unit under this Agreement that is a Limited Partner except as otherwise set
forth in this Agreement.
 
“SPECIAL OP UNIT DISTRIBUTION” has the meaning set forth in Section 5.2(b)
hereof.
 
“SPECIAL OP UNITHOLDER” means Hines Global REIT Associates Limited Partnership.
 
“SPECIAL OP UNIT VALUE” has the meaning set forth in Section 8.5(b)(i) hereof.
 
“SPECIFIED REDEMPTION DATE” means the first business day of the month that is at
least sixty (60) Business Days after the receipt by the General Partner of the
Notice of Redemption.
 
“SUBSIDIARY” means, with respect to any Person, any corporation or other entity
of which a majority of (i) the voting power of the voting equity securities or
(ii) the outstanding equity interests is owned, directly or indirectly, by such
Person.
 
“SUBSIDIARY PARTNERSHIP” means any partnership of which the partnership
interests therein are owned by the General Partner or a direct or indirect
subsidiary of the General Partner.
 
“SUBSTITUTE LIMITED PARTNER” means any Person admitted to the Partnership as a
Limited Partner pursuant to Section 9.3 hereof.
 
“SUCCESSOR ENTITY” has the meaning set forth in the definition of “Conversion
Factor” contained herein.
 
“SURVIVOR “ has the meaning set forth in Section 7.1(d) hereof.
 
“TAX MATTERS PARTNER” has the meaning set forth in Section 10.5(a) hereof.
 
“TENDERED UNITS” has the meaning set forth in Section 8.4(a) hereof.
 
“TENDERING PARTY” has the meaning set forth in Section 8.4(a) hereof.
 
“TERMINATION EVENT” has the meaning set forth in Section 8.5(a).
 
“TRANSACTION” has the meaning set forth in Section 7.1(c) hereof.
 
“TRANSFER” has the meaning set forth in Section 9.2(a) hereof.
 
“VALUE” means the fair market value per share of REIT Shares which will equal:
(i) if REIT Shares are Listed, the average closing price per share for the
previous thirty Business Days, (ii) if REIT Shares are not Listed, (a) the most
recent offering price per share or share equivalent of REIT Shares, until
December 31st of the year following the year in which the most recently
completed offering of REIT Shares has expired, and (b) thereafter, such price
per REIT Share as a majority of the Directors of the General Partner determine
in good faith.
 
“VALUATION MECHANISMS” has the meaning set forth in Section 8.5(b)(i) hereof.
 
ARTICLE 2
 
PARTNERSHIP FORMATION AND IDENTIFICATION
 
2.1 Formation . The Partnership was formed as a limited partnership pursuant to
the Act and all other pertinent laws of the State of Delaware, for the purposes
and upon the terms and conditions set forth in this Agreement.
 
2.2 Name, Office and Registered Agent . The name of the Partnership is Hines
Global REIT Properties LP, a Delaware limited partnership. The specified office
and place of business of the Partnership shall be 2800 Post Oak Blvd., Suite
5000 Houston, TX 77056-6118. The General Partner may at any time change the
location of such office, provided the General Partner gives notice to the
Partners of any such change. The name and address of the Partnership’s
registered agent is The Corporation Trust Company, 1209 Orange Street,
Wilmington, Delaware 19801. The sole duty of the registered agent as such is to
forward to the Partnership any notice that is served on him as registered agent.
 
2.3 Partners .
 
(a) The General Partner of the Partnership is Hines Global REIT, Inc., a
Maryland corporation. Its principal place of business is the same as that of the
Partnership.
 
(b) The Limited Partners are those Persons identified as Limited Partners on
Exhibit A hereto, as amended from time to time.
 
2.4 Term and Dissolution
 
(a) The term of the Partnership shall continue in full force and effect until
the first to occur of any of the following events:
 
(i) The occurrence of an Event of Bankruptcy as to a General Partner or the
dissolution, removal or withdrawal of a General Partner unless the business of
the Partnership is continued pursuant to Section 7.3(b) hereof;
 
(ii) The passage of ninety (90) days after the sale or other disposition of all
or substantially all of the assets of the Partnership (provided that if the
Partnership receives an installment obligation as consideration for such sale or
other disposition, the Partnership shall continue, unless sooner dissolved under
the provisions of this Agreement, until such time as such note or notes are paid
in full); or
 
(iii) The election by the General Partner that the Partnership should be
dissolved.
 
(b) Upon dissolution of the Partnership (unless the business of the Partnership
is continued pursuant to Section 7.3(b) hereof), the General Partner (or its
trustee, receiver, successor or legal representative) shall amend or cancel any
Certificate(s) and liquidate the Partnership’s assets and apply and distribute
the proceeds thereof in accordance with Section 5.6 hereof. Notwithstanding the
foregoing, the liquidating General Partner may either (i) defer liquidation of,
or withhold from distribution for a reasonable time, any assets of the
Partnership (including those necessary to satisfy the Partnership’s debts and
obligations), or (ii) distribute the assets to the Partners in kind.
 
2.5 Filing of Certificate and Perfection of Limited Partnership . The General
Partner shall execute, acknowledge, record and file at the expense of the
Partnership, any and all amendments to the Certificate(s) and all requisite
fictitious name statements and notices in such places and jurisdictions as may
be necessary to cause the Partnership to be treated as a limited partnership
under, and otherwise to comply with, the laws of each state or other
jurisdiction in which the Partnership conducts business.
 
2.6 Certificates Describing Partnership Units and Special OP Units. At the
request of a Limited Partner, the General Partner, at its option, may issue (but
in no way is obligated to issue) a certificate summarizing the terms of such
Limited Partner’s interest in the Partnership, including the number of
Partnership Units (and, if applicable the Special Op Units), as of the date of
such certificate. Any such certificate (i) shall be in form and substance as
approved by the General Partner, (ii) shall not be negotiable and (iii) shall
bear a legend to the following effect:
 
This certificate is not negotiable. The Partnership Units and Special OP Units
represented by this certificate are governed by and transferable only in
accordance with the provisions of the Limited Partnership Agreement of Hines
Global REIT Properties LP, as amended from time to time.
 
ARTICLE 3
 
BUSINESS OF THE PARTNERSHIP
 
The purpose and nature of the business to be conducted by the Partnership is (i)
to conduct any business that may be lawfully conducted by a limited partnership
organized pursuant to the Act, provided, however, that such business shall be
limited to and conducted in such a manner as to permit the General Partner at
all times to qualify as a REIT, unless the General Partner otherwise ceases to
qualify as a REIT, and in a manner such that the General Partner will not be
subject to any taxes under Section 857 or 4981 of the Code, (ii) to enter into
any partnership, joint venture, co-ownership or other similar arrangement to
engage in any of the foregoing or the ownership of interests in any entity
engaged in any of the foregoing and (iii) to do anything necessary or incidental
to the foregoing. In connection with the foregoing, and without limiting the
General Partner’s right in its sole and absolute discretion to qualify or cease
qualifying as a REIT, the Partners acknowledge that the General Partner intends
to qualify as a REIT for federal income tax purposes and upon such qualification
the avoidance of income and excise taxes on the General Partner inures to the
benefit of all the Partners and not solely to the General Partner.
Notwithstanding the foregoing, the Limited Partners agree that the General
Partner may terminate its status as a REIT under the Code at any time to the
full extent permitted under the Charter. The General Partner on behalf of the
Partnership shall also be empowered to do any and all acts and things necessary
or prudent to ensure that the Partnership will not be classified as a “publicly
traded partnership” for purposes of Section 7704 of the Code.
 
ARTICLE 4
 
CAPITAL CONTRIBUTIONS AND ACCOUNTS
 
4.1 Capital Contributions. The General Partner and the initial Limited Partners
have made capital contributions to the Partnership in exchange for the
Partnership Interests set forth opposite their names on Exhibit A, as such
Exhibit may be amended from time to time.
 
4.2 Additional Capital Contributions and Issuances of Additional Partnership
Interests. Except as provided in this Section 4.2 or in Section 4.3, the
Partners shall have no right or obligation to make any additional Capital
Contributions or loans to the Partnership. The General Partner may contribute
additional capital to the Partnership, from time to time, and receive additional
Partnership Interests in respect thereof, in the manner contemplated in this
Section 4.2.
 
(a) Issuances of Additional Partnership Interests.
 
(i) General. The General Partner is hereby authorized to cause the Partnership
to issue such additional Partnership Interests in the form of Partnership Units
for any Partnership purpose at any time or from time to time, including but not
limited to Partnership Units issued in connection with acquisitions of
properties, to the Partners (including the General Partner) or to other Persons
for such consideration and on such terms and conditions as shall be established
by the General Partner in its sole and absolute discretion, all without the
approval of any Limited Partners.   No additional Partnership Interests shall be
issued in connection with any amounts paid to the Partnership which are
generated from the operation or sale of a property or interest therein acquired
either directly or indirectly by the General Partner in whole or in part with
the proceeds from an Asset Acquisition Distribution, an Asset Acquisition
Redemption or an Asset Acquisition Contribution (“General Partner
Property”).   The Partners agree that solely for Federal income tax purposes,
the General Partner Property shall be treated as being owned by the
Partnership.  Any additional Partnership Interests issued may be issued in one
or more classes, or one or more series of any of such classes, with such
designations, preferences and relative, participating, optional or other special
rights, powers and duties, including rights, powers and duties senior to Limited
Partnership Interests, all as shall be determined by the General Partner in its
sole and absolute discretion and without the approval of any Limited Partner,
subject to Delaware law, including, without limitation, (i) the allocations of
items of Partnership income, gain, loss, deduction and credit to each such class
or series of Partnership 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, however, that no additional
Partnership Interests shall be issued to the General Partner unless:
 
(1)           (A) the additional Partnership Interests are issued in connection
with an issuance of REIT Shares of or other interests in the General Partner,
which shares or interests have designations, preferences and other rights, all
such that the economic interests are substantially similar to the designations,
preferences and other rights of the additional Partnership Interests issued to
the General Partner by the Partnership in accordance with this Section 4.2 and
(B) the General Partner shall make a Capital Contribution to the Partnership in
an amount equal to the proceeds raised in connection with the issuance of such
shares of stock of or other interests in the General Partner;
 
(2)           the additional Partnership Interests are issued in exchange for
property owned by the General Partner with a fair market value, as determined by
the General Partner, in good faith, equal to the value of the Partnership
Interests; or
 
(3)           the additional Partnership Interests are issued to all Partners
holding Partnership Units in proportion to their respective Percentage
Interests. Without limiting the foregoing, the General Partner is expressly
authorized to cause the Partnership to issue Partnership Units for less than
fair market value, so long as the General Partner concludes in good faith that
such issuance is in the best interests of the General Partner and the
Partnership.
 
(ii) Upon Issuance of Additional Securities. The General Partner shall not issue
any Additional Securities other than to all holders of REIT Shares, unless (A)
the General Partner shall cause the Partnership to issue to the General Partner,
as the General Partner may designate, Partnership Interests or rights, options,
warrants or convertible or exchangeable securities of the Partnership having
designations, preferences and other rights, all such that the economic interests
are substantially similar to those of the Additional Securities, and (B) the
General Partner contributes the proceeds from the issuance of such Additional
Securities and from any exercise of rights contained in such Additional
Securities, directly and through the General Partner, to the Partnership;
provided, however, that the General Partner is allowed to issue Additional
Securities and use the proceeds from such issuance (“Asset Acquisition
Contributions”) in connection with an acquisition of a General Partner Property
and any Asset Acquisition Contributions are not required to be contributed to
the Partnership.  As indicated above, the Partners agree that for Federal income
tax purposes, General Partner Property (and all associated items of income,
gain, loss and deduction) will be treated as being owned by the Partnership and,
as such, the General Partner agrees to transfer to the Partnership any amounts
it receives from the operation and/or disposition of General Partner Property
(“General Partner Property Amounts”) and all General Partner Property Amounts
shall then be paid by the Partnership in accordance with Section 5.2(b) of this
Agreement.  Without limiting the foregoing, the General Partner is expressly
authorized to issue Additional Securities for less than fair market value, and
to cause the Partnership to issue to the General Partner corresponding
Partnership Interests, so long as (x) the General Partner concludes in good
faith that such issuance is in the best interests of the General Partner and the
Partnership, including without limitation, the issuance of REIT Shares and
corresponding Partnership Units pursuant to an employee share purchase plan
providing for employee purchases of REIT Shares at a discount from fair market
value or employee stock options that have an exercise price that is less than
the fair market value of the REIT Shares, either at the time of issuance or at
the time of exercise, and (y) the General Partner contributes all proceeds from
such issuance to the Partnership. For example, in the event the General Partner
issues REIT Shares for a cash purchase price and contributes all of the proceeds
of such issuance to the Partnership, the General Partner shall be issued a
number of additional Partnership Units equal to the product of (A) the number of
such REIT Shares issued by the General Partner, the proceeds of which were so
contributed, multiplied by (B) a fraction, the numerator of which is 100%, and
the denominator of which is the Conversion Factor in effect on the date of such
contribution.
 
(b) Certain Deemed Contributions of Proceeds of Issuance of REIT Shares.  Except
as otherwise permitted hereunder, in connection with any and all issuances of
REIT Shares, the General Partner shall make Capital Contributions to the
Partnership of the proceeds therefrom, provided that if the proceeds actually
received and contributed by the General Partner are less than the gross proceeds
of such issuance as a result of any underwriter’s discount or other expenses
paid or incurred in connection with such issuance, then the General Partner
shall be deemed to have made Capital Contributions to the Partnership in the
aggregate amount of the gross proceeds of such issuance and the Partnership
shall be deemed simultaneously to have paid such offering expenses in accordance
with Section 6.5 hereof and in connection with the required issuance of
additional Partnership Units to the General Partner for such Capital
Contributions pursuant to Section 4.2(a) hereof.
 
4.3 Additional Funding. If the General Partner determines that it is in the best
interests of the Partnership to provide for additional Partnership funds
(“Additional Funds”) for any Partnership purpose, the General Partner may (i)
cause the Partnership to obtain such funds from outside borrowings, or (ii)
elect to have the General Partner or any of its Affiliates provide such
Additional Funds to the Partnership through loans or otherwise, provided,
however, that the Partnership may not borrow money from its Affiliates, unless a
majority of the Directors of the General Partner (including a majority of
Independent Directors) not otherwise interested in such transaction approve the
transaction as being fair, competitive, and commercially reasonable and no less
favorable to the Partnership than comparable loans between unaffiliated parties.
 
4.4 Capital Accounts.
 
(a) A separate capital account (each a “Capital Account”) shall be maintained
for each Partner in accordance with the rules of Treasury Regulations Section
1.704-1(b)(2)(iv), and this Section 4.4 and Article 5 shall be interpreted and
applied in a manner consistent therewith. Whenever the Partnership would be
permitted to adjust the Capital Accounts of the Partners pursuant to Treasury
Regulations Section 1.704-1(b)(2)(iv)(f) to reflect revaluations of Partnership
property, the Partnership may so adjust the Capital Accounts of the Partners. In
the event that the Capital Accounts of the Partners are adjusted pursuant to
Treasury Regulations Section 1.704-1(b)(2)(iv)(f) to reflect revaluations of
Partnership property, (i) the Capital Accounts of the Partners shall be adjusted
in accordance with Treasury Regulations Section 1.704-1(b)(2)(iv)(g) for
allocations of depreciation, depletion, amortization and gain or loss, as
computed for book purposes, with respect to such property, (ii) the Partners’
distributive shares of depreciation, depletion, amortization and gain or loss,
as computed for tax purposes, with respect to such property shall be determined
so as to take account of the variation between the adjusted tax basis and book
value of such property in the same manner as under Code Section 704(c), and
(iii) the amount of upward and/or downward adjustments to the book value of the
Partnership property shall be treated as income, gain, deduction and/or loss for
purposes of applying the allocation provisions of Article 5. In the event that
Code Section 704(c) applies to Partnership property, the Capital Accounts of the
Partners shall be adjusted in accordance with Treasury Regulations Section
1.704-1(b)(2)(iv)(g) for allocations of depreciation, depletion, amortization
and gain and loss, as computed for book purposes, with respect to such property.
 
(b) Notwithstanding any provision herein to the contrary, any fees, expenses or
other costs of the Partnership that are required to be paid by the General
Partner without reimbursement and that are required to be treated as capital
contributions to the Partnership for purposes of the Treasury Regulations
promulgated under Section 704(b) of the Code, shall be added to the balance of
the General Partner’s Capital Account.
 
4.5 Percentage Interests. If the number of outstanding Partnership Units
increases or decreases during a taxable year, each Partner’s Percentage Interest
shall be adjusted by the General Partner effective as of the effective date of
each such increase or decrease to a percentage equal to the number of
Partnership Units held by such Partner divided by the aggregate number of
Partnership Units outstanding after giving effect to such increase or decrease.
If the Partners’ Percentage Interests are adjusted pursuant to this Section 4.5,
the net profits and net losses (and items thereof) for the taxable year in which
the adjustment occurs shall be allocated between the part of the year ending on
the day when the Partnership’s property is revalued by the General Partner and
the part of the year beginning on the following day either (i) as if the taxable
year had ended on the date of the adjustment or (ii) based on the number of days
in each part. The General Partner, in its sole and absolute discretion, shall
determine which method shall be used to allocate net profits and net losses (or
items thereof) for the taxable year in which the adjustment occurs. The
allocation of net profits and net losses (or items thereof) for the earlier part
of the year shall be based on the Percentage Interests before adjustment, and
the allocation of net profits and net losses (or items thereof) for the later
part shall be based on the adjusted Percentage Interests.
 
4.6 No Interest On Contributions. No Partner shall be entitled to interest on
its Capital Contribution.
 
4.7 Return Of Capital Contributions. No Partner shall be entitled to withdraw
any part of its Capital Contribution or its Capital Account or to receive any
distribution from the Partnership, except as specifically provided in this
Agreement. Except as otherwise provided herein, there shall be no obligation to
return to any Partner or withdrawn Partner any part of such Partner’s Capital
Contribution for so long as the Partnership continues in existence.
 
4.8 No Third Party Beneficiary. No creditor or other third party having dealings
with the Partnership shall have the right to enforce the right or obligation of
any Partner to make Capital Contributions or loans or to pursue any other right
or remedy hereunder or at law or in equity, it being understood and agreed that
the provisions of this Agreement shall be solely for the benefit of, and may be
enforced solely by, the parties hereto and their respective successors and
assigns. None of the rights or obligations of the Partners herein set forth to
make Capital Contributions or loans to the Partnership shall be deemed an asset
of the Partnership for any purpose by any creditor or other third party, nor may
such rights or obligations be sold, transferred or assigned by the Partnership
or pledged or encumbered by the Partnership to secure any debt or other
obligation of the Partnership or of any of the Partners. In addition, it is the
intent of the parties hereto that no distribution to any Limited Partner shall
be deemed a return of money or other property in violation of the Act. However,
if any court of competent jurisdiction holds that, notwithstanding the
provisions of this Agreement, any Limited Partner is obligated to return such
money or property, such obligation shall be the obligation of such Limited
Partner and not of the General Partner. Without limiting the generality of the
foregoing, a deficit Capital Account of a Partner shall not be deemed to be a
liability of such Partner nor an asset or property of the Partnership.
 
ARTICLE 5
 
PROFITS AND LOSSES; DISTRIBUTIONS
 
5.1 Allocation of Profit and Loss.
 
(a) General.
 
(i) Net income and net loss (or items thereof) of the Partnership for each
fiscal year or other applicable period of the Partnership shall be allocated
among the OP Unitholders in accordance with their respective Percentage
Interests;
 
(ii) Notwithstanding the foregoing, and subject only to the provisions of
paragraph (b) and, to the extent set forth in this clause (ii) below, paragraph
(c), net income shall first be allocated to the holder of the Special OP Units
until such holder has received aggregate allocations of income for all fiscal
years equal to the aggregate amount of distributions such holder is entitled to
receive or has received with respect to such Special OP Units for such fiscal
year and all prior fiscal years, provided that in the event the holder of the
Special OP Unit’s entitlement to income allocations in such fiscal year would be
satisfied pursuant to the allocations set forth in paragraph (c) below, then
such allocations shall be made pursuant to paragraph (c) below in lieu of the
provisions of this clause (ii).
 
(b) General Partner Gross Income Allocation. There shall be specially allocated
to the General Partner an amount of (i) first, items of Partnership income and
(ii) second, items of Partnership gain during each fiscal year or other
applicable period, before any other allocations are made hereunder, in an amount
equal to the excess, if any, of (A) the cumulative distributions made to the
General Partner under Section 6.5(b) hereof, other than distributions which
would properly be treated as “guaranteed payments” or which are attributable to
the reimbursement of expenses which would properly be deductible by the
Partnership, over (B) the cumulative allocations of Partnership income and gain
to the General Partner under this Section 5.1(b).
 
(c) Special Allocation with Respect to Sales. Items of income, gain, credit,
loss and deduction of the Partnership for each fiscal year or other applicable
period from Sales, other than any such items allocated under Section 5.1(b),
shall be allocated among the Partners in a manner that will, as nearly as
possible (after giving effect to the allocations under Sections 5.1(a) and
5.1(d)) cause the Capital Account balance of each Partner at the end of such
fiscal year or other applicable period to equal (i) the amount of the
hypothetical distribution that such Partner would receive if the Partnership
were liquidated on the last day of such period and all assets of the
Partnership, including cash, were sold for cash equal to their Carrying Value,
taking into account any adjustments thereto for such period, all liabilities of
the Partnership were satisfied in full in cash according to their terms (limited
with respect to each nonrecourse liability to the Carrying Value of the assets
securing such liability) and Net Sales Proceeds (after satisfaction of such
liabilities) were distributed in full pursuant to Section 5.2(b), minus (ii) the
sum of such Partner’s share of Partnership Minimum Gain and Partner Nonrecourse
Debt Minimum Gain and the amount, if any and without duplication, that the
Partner would be obligated to contribute to the capital of the Partnership, all
computed as of the date of the hypothetical sale of assets.
 
(d) Nonrecourse Deductions; Minimum Gain Chargeback. Notwithstanding any
provision to the contrary, (i) any expense of the Partnership that is a
“nonrecourse deduction” within the meaning of Regulations Section 1.704-2(b)(1)
shall be allocated in accordance with the Partners’ respective Percentage
Interests, (ii) any expense of the Partnership that is a “partner nonrecourse
deduction” within the meaning of Regulations Section 1.704-2(i)(2) shall be
allocated to the Partner that bears the “economic risk of loss” with respect to
the liability to which such deductions are attributable in accordance with
Regulations Section 1.704-2(i)(1), (iii) if there is a net decrease in
Partnership Minimum Gain within the meaning of Regulations Section 1.704-2(f)(1)
for any Partnership taxable year, then, subject to the exceptions set forth in
Regulations Section 1.704-2(f)(2),(3), (4) and (5), items of gain and income
shall be allocated among the Partners in accordance with Regulations Section
1.704-2(f) and the ordering rules contained in Regulations Section 1.704-2(j),
and (iv) if there is a net decrease in Partner Nonrecourse Debt Minimum Gain
within the meaning of Regulations Section 1.704-2(i)(4) for any Partnership
taxable year, then, subject to the exceptions set forth in Regulations Section
1.704-(2)(g), items of gain and income shall be allocated among the Partners in
accordance with Regulations Section 1.704-2(i)(4) and the ordering rules
contained in Regulations Section 1.704-2(j). A Partner’s “interest in
partnership profits” for purposes of determining its share of the excess
nonrecourse liabilities of the Partnership within the meaning of Regulations
Section 1.752-3(a)(3) shall be such Partner’s Percentage Interest.
 
(e) Qualified Income Offset. If a Partner unexpectedly receives in any taxable
year an adjustment, allocation, or distribution described in subparagraphs (4),
(5), or (6) of Regulations Section 1.704-1(b)(2)(ii)(d) that causes or increases
a deficit balance in such Partner’s Capital Account that exceeds the sum of such
Partner’s shares of Partnership Minimum Gain and Partner Nonrecourse Debt
Minimum Gain, as determined in accordance with Regulations Sections
1.704-2(g)(1) and 1.704-2(i)(5), such Partner shall be allocated specially for
such taxable year (and, if necessary, later taxable years) items of income and
gain in an amount and manner sufficient to eliminate such deficit Capital
Account balance as quickly as possible as provided in Regulations Section
1.704-1(b)(2)(ii)(d). This Section 5.1(e) is intended to constitute a “qualified
income offset” under Section 1.704-1(b)(2)(ii)(d) of the Regulations and shall
be interpreted consistently therewith. After the occurrence of an allocation of
income or gain to a Partner in accordance with this Section 5.1(e), to the
extent permitted by Regulations Section 1.704-1(b), items of expense or loss
shall be allocated to such Partner in an amount necessary to offset the income
or gain previously allocated to such Partner under this Section 5.1(e).
 
(f) Capital Account Deficits. Loss (or items of loss) shall not be allocated to
a Limited Partner to the extent that such allocation would cause or increase a
deficit in such Partner’s Capital Account at the end of any fiscal year (after
reduction to reflect the items described in Regulations Section
1.704-1(b)(2)(ii)(d)(4), (5) and (6)) to exceed the sum of such Partner’s shares
of Partnership Minimum Gain and Partner Nonrecourse Debt Minimum Gain, as
determined in accordance with Regulations Sections 1.704-2(g)(1) and
1.704-2(i)(5). Any net loss in excess of that limitation shall be allocated to
the General Partner. After the occurrence of an allocation of net loss to the
General Partner in accordance with this Section 5.1(f), to the extent permitted
by Regulations Section 1.704-1(b), Profit shall be allocated to such Partner in
an amount necessary to offset the net loss previously allocated to such Partner
under this Section 5.1(f).
 
(g) Allocations Between Transferor and Transferee. If a Partner transfers any
part or all of its Partnership Interest, the distributive shares of the various
items of profit and loss allocable among the Partners during such fiscal year of
the Partnership shall be allocated between the transferor and the transferee
Partner either (i) as if the Partnership’s fiscal year had ended on the date of
the transfer, or (ii) based on the number of days of such fiscal year that each
was a Partner without regard to the results of Partnership activities in the
respective portions of such fiscal year in which the transferor and the
transferee were Partners. The General Partner, in its sole and absolute
discretion, shall determine which method shall be used to allocate the
distributive shares of the various items of Profit and profit and loss between
the transferor and the transferee Partner.
 
(h) Curative Allocations. The allocations set forth in Sections 5.1(d), 5.1(e)
and 5.1(f) of this Agreement (the “Regulatory Allocations”) are intended to
comply with certain requirements of the Regulations. The General Partner is
authorized to offset all Regulatory Allocations either with other Regulatory
Allocations or with special allocations of other items of Partnership income,
gain, loss or deduction pursuant to this Section 5.1(h). Therefore,
notwithstanding any other provision of this Section 5.1 (other than the
Regulatory Allocations), the General Partner shall make such offsetting special
allocations of Partnership income, gain, loss or deduction in whatever manner it
deems appropriate so that, after such offsetting allocations are made, each
Partner’s Capital Account is, to the extent possible, equal to the Capital
Account balance such Partner would have had if the Regulatory Allocations were
not part of this Agreement and all Partnership items were allocated pursuant to
Sections 5.1(a), 5.1(b), 5.1(c) and 5.1(g).
 
5.2 Distribution of Cash.
 
(a) The Partnership may distribute cash on a quarterly (or, at the election of
the General Partner, more or less frequent) basis, in an amount determined by
the General Partner in its sole and absolute discretion, to the Partners who are
Partners on the Partnership Record Date with respect to such quarter (or other
distribution period) in accordance with Section 5.2(b); provided, however, that
if a new or existing Partner acquires an additional Partnership Interest in
exchange for a Capital Contribution on any date other than a Partnership Record
Date, the cash distribution attributable to such additional Partnership Interest
relating to the Partnership Record Date next following the issuance of such
additional Partnership Interest shall be reduced in the proportion equal to one
minus (i) the number of days that such additional Partnership Interest is held
by such Partner bears to (ii) the number of days between such Partnership Record
Date and the immediately preceding Partnership Record Date.
 
(b) Except for distributions pursuant to Section 5.6 of this Agreement in
connection with an Asset Acquisition Distribution and Section 5.7 of this
Agreement in connection with the dissolution and liquidation of the Partnership
and subject to the provisions of Sections 5.2(c), 5.2(d), 5.3, 5.5 and 8.5 of
this Agreement, all distributions shall be made: (i) first, 100% to the OP
Unitholders in accordance with their respective Percentage Interests on the
Partnership Record Date until (A) the OP Unitholders (other than the General
Partner) have received cumulative distributions under this Section 5.2(b) equal
to aggregate Capital Contributions made by such OP Unitholders to the
Partnership plus a cumulative, noncompounded pre-tax rate of return thereon of
8.0% per annum, determined by taking into account the dates on which all such
Capital Contributions and distributions were made and (B) the General Partner
has received cumulative distributions under this Section 5.2, equal to (1) the
aggregate Capital Contributions made by the General Partner to the Partnership;
plus (2) the Asset Acquisition Contributions; plus (3) a cumulative,
noncompounded pre-tax rate of return on (1) and (2) of 8.0% per annum,
determined by taking into account the dates on which all such Capital
Contributions, Asset Acquisition Contributions and distributions were made and
(ii) second, (A) 85% to the OP Unitholders, in accordance with their respective
Percentage Interests on the Partnership Record Date and (B) 15% to the holder of
the Special OP Units, provided however, notwithstanding the foregoing, in the
event that the Special OP Unitholder has received a distribution under the
circumstances described in Section 8.5(b)(iv) hereof (a “Special OP Unit
Distribution”) and there is a subsequent Termination Event, no further amount
shall be distributed to the Special OP Unitholder until the OP Unitholders, have
collectively received aggregate distributions equal to the sum of (x) the amount
such OP Unitholders are entitled to receive pursuant to this Section 5.2(b)(i)
plus (y) an amount equal to 85% of (i) the Special OP Unit Distribution divided
by (ii) .15.
 
 
(c) Notwithstanding any other provision of this Agreement, the General Partner
is authorized to take any action that it determines to be necessary or
appropriate to cause the Partnership to comply with any withholding requirements
established under the Code or any other federal, state or local law including,
without limitation, pursuant to Sections 1441, 1442, 1445 and 1446 of the Code.
To the extent that the Partnership is required to withhold and pay over to any
taxing authority any amount resulting from the allocation or distribution of
income to any Partner or assignee (including by reason of Section 1446 of the
Code), either (i) if the actual amount to be distributed to the Partner equals
or exceeds the amount required to be withheld by the Partnership, the amount
withheld shall be treated as a distribution of cash in the amount of such
withholding to such Partner, or (ii) if the actual amount to be distributed to
the Partner is less than the amount required to be withheld by the Partnership,
the actual amount shall be treated as a distribution of cash in the amount of
such withholding and the additional amount required to be withheld shall be
treated as a loan (a “Partnership Loan”) from the Partnership to the Partner on
the day the Partnership pays over such amount to a taxing authority. A
Partnership Loan shall be repaid through withholding by the Partnership with
respect to subsequent distributions to the applicable Partner or assignee. In
the event that a Limited Partner (a “Defaulting Limited Partner”) fails to pay
any amount owed to the Partnership with respect to the Partnership Loan within
fifteen (15) days after demand for payment thereof is made by the Partnership on
the Limited Partner, the General Partner, in its sole and absolute discretion,
may elect to make the payment to the Partnership on behalf of such Defaulting
Limited Partner. In such event, on the date of payment, the General Partner
shall be deemed to have extended a loan (a “General Partner Loan”) to the
Defaulting Limited Partner in the amount of the payment made by the General
Partner and shall succeed to all rights and remedies of the Partnership against
the Defaulting Limited Partner as to that amount. Without limitation, the
General Partner shall have the right to receive any distributions that otherwise
would be made by the Partnership to the Defaulting Limited Partner until such
time as the General Partner Loan has been paid in full, and any such
distributions so received by the General Partner shall be treated as having been
received by the Defaulting Limited Partner and immediately paid to the General
Partner. Any amounts treated as a Partnership Loan or a General Partner Loan
pursuant to this Section 5.2(c) shall bear interest at the lesser of (i) the
base rate on corporate loans at large United States money center commercial
banks, as published from time to time in The Wall Street Journal, or (ii) the
maximum lawful rate of interest on such obligation, such interest to accrue from
the date the Partnership or the General Partner, as applicable, is deemed to
extend the loan until such loan is repaid in full.
 
(d) In no event may a Partner receive a distribution of cash with respect to a
Partnership Unit if such Partner is entitled to receive a cash distribution as
the holder of record of a REIT Share for which all or part of such Partnership
Unit has been or will be exchanged.
 
5.3 REIT Distribution Requirements. The General Partner shall use its
commercially reasonable efforts to cause the Partnership to distribute amounts
sufficient to enable the General Partner to make shareholder distributions that
will allow the General Partner to (i) meet its distribution requirement for
qualification as a REIT as set forth in Section 857 of the Code and (ii) avoid
any federal income or excise tax liability imposed by the Code.
 
5.4 No Right to Distributions in Kind. No Partner shall be entitled to demand
property other than cash in connection with any distributions by the
Partnership.
 
5.5 Limitations on Return of Capital Contributions. Notwithstanding any of the
provisions of this Article 5, no Partner shall have the right to receive and the
General Partner shall not have the right to make, a distribution that includes a
return of all or part of a Partner’s Capital Contributions, unless after giving
effect to the return of a Capital Contribution, the sum of all Partnership
liabilities, other than the liabilities to a Partner for the return of his
Capital Contribution, does not exceed the fair market value of the Partnership’s
assets.
 
5.6 Asset Acquisition Distributions. Notwithstanding any of the provisions of
this Article V, to the extent the General Partner has made Capital Contributions
to the Partnership of the proceeds from the issuance of Additional Securities
pursuant to Section 4.2(a)(ii) hereof or the Partnership has borrowed funds or
otherwise has funds available for real estate related acquisitions, and it is
determined by the General Partner that (i) the General Partner should acquire a
General Partner Property and (ii) funds are needed in order for the General
Partner to acquire a General Partner Property, then the General Partner shall
elect to receive such funds from the Partnership and the Partnership shall pay
such funds to the General Partner either as an Asset Acquisition Distribution
under this Section 5.6 or as an Asset Acquisition Redemption under Section 8.4.
 
5.7 Distributions Upon Liquidation. Upon liquidation of the Partnership, after
payment of, or adequate provision for, debts and obligations of the Partnership,
including any Partner loans, any remaining assets of the Partnership shall be
distributed to all Partners in proportion to their respective positive Capital
Account balances, determined after taking into account all allocations required
to be made pursuant to Section 5.1 hereof and all prior distributions made
pursuant to this Article 5, in compliance with Treasury Regulation Section
1.704-1(b)(2)(ii)(b)(2). Notwithstanding any other provision of this Agreement,
the amount by which the value, as determined in good faith by the General
Partner, of any property other than cash to be distributed in kind to the
Partners exceeds or is less than the Carrying Value of such property shall, to
the extent not otherwise recognized by the Partnership, be taken into account in
computing net profit and net loss of the Partnership (or items thereof) for
purposes of crediting or charging the Capital Accounts of, and distributing
proceeds to, the Partners, pursuant to this Agreement. To the extent deemed
advisable by the General Partner, appropriate arrangements (including the use of
a liquidating trust) may be made to assure that adequate funds are available to
pay any contingent debts or obligations.
 
5.8 Substantial Economic Effect. It is the intent of the Partners that the
allocations of net profit and net loss (and items thereof) under this Agreement
have substantial economic effect (or be consistent with the Partners’ interests
in the Partnership in the case of the allocation of losses attributable to
nonrecourse debt) within the meaning of Section 704(b) of the Code as
interpreted by the Regulations promulgated pursuant thereto. Article 5 and other
relevant provisions of this Agreement shall be interpreted in a manner
consistent with such intent.
 
ARTICLE 6
 
RIGHTS, OBLIGATIONS AND
 
POWERS OF THE GENERAL PARTNER
 
6.1 Management of the Partnership.
 
(a) Except as otherwise expressly provided in this Agreement, the General
Partner shall have full, complete and exclusive discretion to manage and control
the business of the Partnership for the purposes herein stated, and shall make
all decisions affecting the business and assets of the Partnership. Subject to
the restrictions specifically contained in this Agreement, the powers of the
General Partner shall include, without limitation, the authority to take the
following actions on behalf of the Partnership:
 
(i) to acquire, purchase, own, operate, lease, dispose and exchange of any
Assets, that the General Partner determines are necessary or appropriate or in
the best interests of the business of the Partnership;
 
(ii) to construct buildings and make other improvements on the properties owned
or leased by the Partnership;
 
(iii) to authorize, issue, sell, redeem or otherwise purchase any Partnership
Interests or any securities (including secured and unsecured debt obligations of
the Partnership, debt obligations of the Partnership convertible into any class
or series of Partnership Interests, or options, rights, warrants or appreciation
rights relating to any Partnership Interests) of the Partnership;
 
(iv) to borrow or lend money for the Partnership or the General Partner or in
connection with a General Partner Property, issue or receive evidences of
indebtedness in connection therewith, refinance, increase the amount of, modify,
amend or change the terms of, or extend the time for the payment of, any such
indebtedness, and secure such indebtedness by mortgage, deed of trust, pledge or
other lien on the Partnership’s assets;
 
(v) to pay, either directly or by reimbursement, for all operating costs and
general administrative expenses of the Partnership to third parties or to the
General Partner or its Affiliates as set forth in this Agreement;
 
(vi) to guarantee or become a co-maker of indebtedness of the General Partner or
any Subsidiary thereof, refinance, increase the amount of, modify, amend or
change the terms of, or extend the time for the payment of, any such guarantee
or indebtedness, and secure such guarantee or indebtedness by mortgage, deed of
trust, pledge or other lien on the Partnership’s assets;
 
(vii) to use assets of the Partnership (including, without limitation, cash on
hand) for any purpose consistent with this Agreement, including, without
limitation, payment, either directly or by reimbursement, of all operating costs
and general administrative expenses of the General Partner, the Partnership or
any Subsidiary of either, to third parties or to the General Partner as set
forth in this Agreement;
 
(viii) to lease all or any portion of any of the Partnership’s assets, whether
or not the terms of such leases extend beyond the termination date of the
Partnership and whether or not any portion of the Partnership’s assets so leased
are to be occupied by the lessee, or, in turn, subleased in whole or in part to
others, for such consideration and on such terms as the General Partner may
determine;
 
(ix) to prosecute, defend, arbitrate, or compromise any and all claims or
liabilities in favor of or against the Partnership, on such terms and in such
manner as the General Partner may reasonably determine, and similarly to
prosecute, settle or defend litigation with respect to the Partners, the
Partnership, or the Partnership’s assets;
 
(x) to file applications, communicate, and otherwise deal with any and all
governmental agencies having jurisdiction over, or in any way affecting, the
Partnership’s assets or any other aspect of the Partnership business;
 
(xi) to make or revoke any election permitted or required of the Partnership by
any taxing authority;
 
(xii) to maintain such insurance coverage for public liability, fire and
casualty, and any and all other insurance for the protection of the Partnership,
for the conservation of Partnership assets, or for any other purpose convenient
or beneficial to the Partnership, in such amounts and such types, as it shall
determine from time to time;
 
(xiii) to determine whether or not to apply any insurance proceeds for any
property to the restoration of such property or to distribute the same;
 
(xiv) to establish one or more divisions of the Partnership, to hire and dismiss
employees of the Partnership or any division of the Partnership, and to retain
legal counsel, accountants, consultants, real estate brokers, and such other
persons, as the General Partner may deem necessary or appropriate in connection
with the Partnership business and to pay therefor such remuneration as the
General Partner may deem reasonable and proper;
 
(xv) to retain other services of any kind or nature in connection with the
Partnership business, and to pay therefor such remuneration as the General
Partner may deem reasonable and proper;
 
(xvi) to negotiate and conclude agreements on behalf of the Partnership with
respect to any of the rights, powers and authority conferred upon the General
Partner;
 
(xvii) to maintain accurate accounting records and to file promptly all federal,
state and local income tax returns on behalf of the Partnership;
 
(xviii) to distribute Partnership cash or other Partnership assets in accordance
with this Agreement;
 
(xix) to form or acquire an interest in, and contribute property to, any further
limited or general partnerships, joint ventures or other relationships that it
deems desirable (including, without limitation, the acquisition of interests in,
and the contributions of property to, its Subsidiaries and any other Person in
which it has an equity interest from time to time);
 
(xx) to establish Partnership reserves for working capital, capital
expenditures, contingent liabilities, or any other valid Partnership purpose;
 
(xxi) to merge, consolidate or combine the Partnership with or into another
Person;
 
(xxii) to do any and all acts and things necessary or prudent to ensure that the
Partnership will not be classified as a “publicly traded partnership” for
purposes of Section 7704 of the Code; and
 
(xxiii) to take such other action, execute, acknowledge, swear to or deliver
such other documents and instruments, and perform any and all other acts that
the General Partner deems necessary or appropriate for the formation,
continuation and conduct of the business and affairs of the Partnership
(including, without limitation, all actions consistent with allowing the General
Partner at all times to qualify as a REIT unless the General Partner voluntarily
terminates its REIT status) and to possess and enjoy all of the rights and
powers of a general partner as provided by the Act.
 
(b) Except as otherwise provided herein, to the extent the duties of the General
Partner require expenditures of funds to be paid to third parties, the General
Partner shall not have any obligations hereunder except to the extent that
partnership funds are reasonably available to it for the performance of such
duties, and nothing herein contained shall be deemed to authorize or require the
General Partner, in its capacity as such, to expend its individual funds for
payment to third parties or to undertake any individual liability or obligation
on behalf of the Partnership.
 
6.2 Delegation of Authority. The General Partner may delegate any or all of its
powers, rights and obligations hereunder, and may appoint, employ, contract or
otherwise deal with any Person for the transaction of the business of the
Partnership, which Person may, under supervision of the General Partner, perform
any acts or services for the Partnership as the General Partner may approve.
 
6.3 Indemnification and Exculpation of Indemnitees.
 
(a) The Partnership shall indemnify an Indemnitee from and against any and all
losses, claims, damages, liabilities, joint or several, expenses (including
reasonable legal fees and expenses), judgments, fines, settlements, and other
amounts arising from any and all claims, demands, actions, suits or proceedings,
civil, criminal, administrative or investigative, that relate to the operations
of the Partnership as set forth in this Agreement in which any Indemnitee may be
involved, or is threatened to be involved, as a party or otherwise, unless it is
established 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. Any indemnification pursuant to
this Section 6.3 shall be made only out of the assets of the Partnership.
 
(b) The Partnership shall reimburse an Indemnitee for reasonable expenses
incurred by an Indemnitee who is a party to a proceeding in advance of the final
disposition of the proceeding 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 6.3 has been met, and (ii) a written undertaking by
or on behalf of the Indemnitee to repay the amount if it shall ultimately be
determined that the standard of conduct has not been met.
 
(c) The indemnification provided by this Section 6.3 shall be in addition to any
other rights to which an Indemnitee or any other Person may be entitled under
any agreement, pursuant to any vote of the Partners, as a matter of law or
otherwise, and shall continue as to an Indemnitee who has ceased to serve in
such capacity.
 
(d) 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) For purposes of this Section 6.3, the Partnership shall be deemed to have
requested an Indemnitee to serve as fiduciary of an employee benefit plan
whenever the performance by it of its duties to the Partnership also imposes
duties on, or otherwise involves services by, it to the plan or participants or
beneficiaries of the plan; excise taxes assessed on an Indemnitee with respect
to an employee benefit plan pursuant to applicable law shall constitute fines
within the meaning of this Section 6.3; and actions taken or omitted by the
Indemnitee with respect to an employee benefit plan in the performance of its
duties for a purpose reasonably believed by it to be in the interest of the
participants and beneficiaries of the plan shall be deemed to be for a purpose
which is not opposed to the best interests of the Partnership.
 
(f) In no event may an Indemnitee subject the Limited Partners to personal
liability by reason of the indemnification provisions set forth in this
Agreement.
 
(g) An Indemnitee shall not be denied indemnification in whole or in part under
this Section 6.3 because the Indemnitee had an interest in the transaction with
respect to which the indemnification applies if the transaction was otherwise
permitted by the terms of this Agreement.
 
(h) The provisions of this Section 6.3 are for the benefit of the Indemnitees,
their heirs, successors, assigns and administrators and shall not be deemed to
create any rights for the benefit of any other Persons.
 
(i) Notwithstanding the foregoing, the Partnership may not indemnify or hold
harmless an Indemnitee for any liability or loss unless all of the following
conditions are met: (i) the Indemnitee has determined, in good faith, that the
course of conduct that caused the loss or liability was in the best interests of
the Partnership; (ii) the Indemnitee was acting on behalf of or performing
services for the Partnership; (iii) the liability or loss was not the result of
(A) negligence or misconduct, in the case that the Indemnitee is a director of
the General Partner (other than an Independent Director), the Advisor or an
Affiliate of the Advisor or (B) gross negligence or willful misconduct, in the
case that the Indemnitee is an Independent Director; and (iv) the
indemnification or agreement to hold harmless is recoverable only out of net
assets of the Partnership. In addition, the Partnership shall not provide
indemnification for any loss, liability or expense arising from or out of an
alleged violation of federal or state securities laws by such party unless one
or more of the following conditions are met: (i) there has been a successful
adjudication on the merits of each count involving alleged material securities
law violations as to the Indemnitee; (ii) such claims have been dismissed with
prejudice on the merits by a court of competent jurisdiction as to the
Indemnitee; or (iii) a court of competent jurisdiction approves a settlement of
the claims against the Indemnitee and finds that indemnification of the
settlement and the related costs should be made, and the court considering the
request for indemnification has been advised of the position of the Securities
and Exchange Commission and of the published position of any state securities
regulatory authority in which Securities were offered or sold as to
indemnification for violations of securities laws.
 
6.4 Liability of the General Partner.
 
(a) Notwithstanding anything to the contrary set forth in this Agreement, the
General Partner shall not be liable for monetary damages to the Partnership or
any Partners for losses sustained or liabilities incurred as a result of errors
in judgment or of any act or omission if the General Partner acted in good
faith. The General Partner shall not be in breach of any duty that the General
Partner may owe to the Limited Partners or the Partnership or any other Persons
under this Agreement or of any duty stated or implied by law or equity provided
the General Partner, acting in good faith, abides by the terms of this
Agreement.
 
(b) Each Limited Partner expressly acknowledges and agrees that whenever in this
Agreement the General Partner is permitted to take any action, make any decision
or determination or otherwise vote on or give its consent to any action, the
General Partner shall be entitled to exercise its sole and absolute discretion
in connection therewith after considering only such interests and factors as it
desires and, without limiting the generality of the foregoing, it is
specifically agreed and acknowledged that the General Partner in taking any
action or declining to take any action hereunder may consider exclusively its
own interests or the interests of its shareholders and shall have  no duty or
obligation to consider the separate interests of or factors affecting the
Partnership or any other Partner (including, without limitation, the tax
consequences to Limited Partners or the tax consequences of some, but not all,
of the Limited Partners).   The General Partner shall not be liable for monetary
damages for losses sustained, liabilities incurred, or benefits not derived by
Limited Partners in connection with such decisions, provided that the General
Partner has acted in good faith.
 
(c) Subject to its obligations and duties as General Partner set forth in
Section 6.1 hereof, the General Partner may exercise any of the powers granted
to it under this Agreement and perform any of the duties imposed upon it
hereunder either directly or by or through its agents. The General Partner shall
not be responsible for any misconduct or negligence on the part of any such
agent appointed by it in good faith.
 
(d) Notwithstanding any other provisions of this Agreement or the Act, any
action of the General Partner on behalf of the Partnership or any decision of
the General Partner to refrain from acting on behalf of the Partnership,
undertaken in the good faith belief that such action or omission is necessary or
advisable in order (i) to protect the ability of the General Partner to continue
to qualify as a REIT or (ii) to prevent the General Partner from incurring any
taxes under Section 857, Section 4981, or any other provision of the Code, is
expressly authorized under this Agreement and is deemed approved by all of the
Limited Partners.
 
(e) Any amendment, modification or repeal of this Section 6.4 or any provision
hereof shall be prospective only and shall not in any way affect the limitations
on the General Partner’s liability to the Partnership and the Limited Partners
under this Section 6.4 as in effect immediately prior to such amendment,
modification or repeal with respect to matters occurring, in whole or in part,
prior to such amendment, modification or repeal, regardless of when claims
relating to such matters may arise or be asserted.
 
(f) In accordance with Section 17-1101(d) of the Act, the Partners hereby
acknowledge and agree that the provisions of this Agreement, including the
provisions of this Article 6, to the extent they restrict or eliminate the
duties (including fiduciary duties) and liabilities relating thereto otherwise
existing at law or in equity, replace completely and absolutely such other
duties (including fiduciary duties) and liabilities relating thereto and further
acknowledge and agree that the provisions of this subsection (f) and the other
provisions of this Article 6 are fundamental elements to the agreement of the
Partners to enter into this Amended and Restated Limited Partnership Agreement.
 
6.5 Reimbursement of General Partner.
 
(a) Except as provided in this Section 6.5 and elsewhere in this Agreement
(including the provisions of Article 5 and Article 6 regarding distributions,
payments, and allocations to which it may be entitled), the General Partner
shall not be compensated for its services as general partner of the Partnership.
 
(b) The General Partner shall be reimbursed on a monthly basis, or such other
basis as the General Partner may determine in its sole and absolute discretion,
for all Administrative Expenses incurred by the General Partner.
 
6.6 Outside Activities
 
. Subject to (a) Section 6.8 hereof, (b) the Charter and (c) any agreements
entered into by the General Partner or its Affiliates with the Partnership, a
Subsidiary or any officer, director, employee, agent, trustee, Affiliate or
shareholder of the General Partner, the General Partner shall be entitled to and
may have business interests and engage in business activities in addition to
those relating to the Partnership, including business interests and activities
substantially similar or identical to those of the Partnership. Neither the
Partnership nor any of the Limited Partners shall have any rights by virtue of
this Agreement in any such business ventures, interests or activities. None of
the Limited Partners nor any other Person shall have any rights by virtue of
this Agreement or the partnership relationship established hereby in any such
business ventures, interests or activities, and the General Partner shall have
no obligation pursuant to this Agreement to offer any interest in any such
business ventures, interests and activities to the Partnership or any Limited
Partner, even if such opportunity is of a character which, if presented to the
Partnership or any Limited Partner, could be taken by such Person.
 
6.7 Employment or Retention of Affiliates.
 
(a) Any Affiliate of the General Partner may be employed or retained by the
Partnership and may otherwise deal with the Partnership (whether as a buyer,
lessor, lessee, manager, furnisher of goods or services, broker, agent, lender
or otherwise) and may receive from the Partnership any compensation, price, or
other payment therefor which the General Partner determines to be fair and
reasonable.
 
(b) The Partnership may lend or contribute to its Subsidiaries or other Persons
in which it has an equity investment, and such Persons may borrow funds from the
Partnership, on terms and conditions established in the sole and absolute
discretion of the General Partner. The foregoing authority shall not create any
right or benefit in favor of any Subsidiary or any other Person.
 
(c) The Partnership may transfer assets to joint ventures, other partnerships,
corporations or other business entities in which it is or thereby becomes a
participant upon such terms and subject to such conditions as the General
Partner deems are consistent with this Agreement, applicable law and the REIT
status of the General Partner.
 
(d) Except as expressly permitted by this Agreement, neither the General Partner
nor any of its Affiliates shall sell, transfer or convey any property to, or
purchase any property from, the Partnership, directly or indirectly, except
pursuant to transactions that are, in the General Partner’s sole discretion, on
terms that are fair and reasonable to the Partnership.
 
6.8 General Partner Participation. The General Partner agrees that all business
activities of the General Partner, including activities pertaining to the
acquisition, development or ownership of any Asset, shall be conducted through
the Partnership or one or more Subsidiary Partnerships; provided, however, that
the General Partner is allowed to acquire General Partner Property under Section
4.2 (a)(ii) hereof.
 
6.9 Title to Partnership Assets. Title to Partnership assets, whether real,
personal or mixed and whether tangible or intangible, shall be deemed to be
owned by the Partnership as an entity, and no Partner, individually or
collectively, shall have any ownership interest in such Partnership assets or
any portion 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 or one or more Subsidiary Partnerships in
accordance with the provisions of this Agreement; provided, however, that the
General Partner shall use its commercially reasonable efforts to cause
beneficial and record title to such assets to be vested in the Partnership as
soon as reasonably practicable. All Partnership assets shall be recorded as the
property of the Partnership in its books and records, irrespective of the name
in which legal title to such Partnership assets is held.
 
6.10 Miscellaneous. In the event the General Partner redeems any REIT Shares
(other than REIT Shares redeemed in accordance with the share redemption program
of the General Partner through proceeds received from the General Partner’s
dividend reinvestment plan), then the General Partner shall cause the
Partnership to purchase from the General Partner a number of Partnership Units
as determined based on the application of the Conversion Factor on the same
terms that the General Partner redeemed such REIT Shares. Moreover, if the
General Partner makes a cash tender offer or other offer to acquire REIT Shares,
then the General Partner shall cause the Partnership to make a corresponding
offer to the General Partner to acquire an equal number of Partnership Units
held by the General Partner. In the event any REIT Shares are redeemed by the
General Partner pursuant to such offer, the Partnership shall redeem an
equivalent number of the General Partner’s Partnership Units for an equivalent
purchase price based on the application of the Conversion Factor.
 
6.11 No Duplication of Fees or Expenses. The Partnership may not incur or be
responsible for any fee or expense (in connection with the Offering or
otherwise) that would be duplicative of fees and expenses paid by the General
Partner.
 
ARTICLE 7
 
CHANGES IN GENERAL PARTNER
 
7.1 Transfer of the General Partner’s Partnership Interest.
 
(a) The General Partner shall not transfer all or any portion of its General
Partnership Interest or withdraw as General Partner except as provided in, or in
connection with a transaction contemplated by, Sections 7.1(c), 7.1(d) or
7.1(e).
 
(b) The General Partner agrees that its Percentage Interest will at all times be
in the aggregate, at least 0.1%.
 
(c) Except as otherwise provided in Section 6.4(b) or Section 7.1(d) or 7.1(e)
hereof, the General Partner shall not engage in any merger, consolidation or
other combination with or into another Person or sale of all or substantially
all of its assets, (other than in connection with a change in the General
Partner’s state of incorporation or organizational form) in each case which
results in a change of control of the General Partner (a “Transaction”), unless:
 
(i) the consent of Limited Partners holding more than 50% of the Percentage
Interests and the consent of the Special OP Unitholder is obtained;
 
(ii) as a result of such Transaction: (A) all Limited Partners will 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 in the Transaction to a holder of one REIT Share in
consideration of one REIT Share, provided that if, in connection with the
Transaction, a purchase, tender or exchange offer (“Offer”) shall have been made
to and accepted by the holders of more than 50% of the outstanding REIT Shares,
each holder of Partnership Units shall be given the option to exchange its
Partnership Units for the greatest amount of cash, securities, or other property
which a Limited Partner holding Partnership Units would have received had it (1)
exercised its Redemption Right and (2) sold, tendered or exchanged pursuant to
the Offer the REIT Shares received upon exercise of the Redemption Right
immediately prior to the expiration of the Offer and (B) the Special OP
Unitholder will receive for the Special OP Units an amount of cash, securities
or other property (as applicable based upon the type of consideration and the
proportions thereof paid to holders of REIT Shares in the Transaction)
determined as set forth pursuant to Section 5.2(b) or Section 8.5 hereof, as
applicable; or
 
(iii) the General Partner is the surviving entity in the Transaction and either
(A) the holders of REIT Shares do not receive cash, securities, or other
property in the Transaction or (B) all Limited Partners (other than the General
Partner or any Subsidiary) receive (1) in exchange for their Partnership Units,
an amount of cash, securities, or other property (expressed as an amount per
REIT Share) that is no less than the product of the Conversion Factor and the
greatest amount of cash, securities, or other property (expressed as an amount
per REIT Share) received in the Transaction by any holder of REIT Shares and (2)
the Special OP Unitholder receives in exchange for the Special OP Units, an
amount of cash, securities or other property (as applicable based upon the type
of consideration and the proportions thereof paid to holders of REIT Shares in
the Transaction) determined as set forth pursuant to Section 8.5(a) hereof.
 
(d) Notwithstanding Section 7.1(c), the General Partner may merge with or into
or consolidate with another entity if immediately after such merger or
consolidation (i) substantially all of the assets of the successor or surviving
entity (the “Survivor”), other than Partnership Units held by the General
Partner, are contributed, directly or indirectly, to the Partnership as a
Capital Contribution in exchange for Partnership Units with a fair market value
equal to the value of the assets so contributed as determined by the Survivor in
good faith and (ii) the Survivor expressly agrees to assume all obligations of
the General Partner, as appropriate, hereunder. Upon such contribution and
assumption, the Survivor shall have the right and duty to amend this Agreement
as set forth in this Section 7.1(d). The Survivor shall in good faith arrive at
a new method for the calculation of the Cash Amount, the REIT Shares Amount and
Conversion Factor for a Partnership Unit after any such merger or consolidation
so as to approximate the existing method for such calculation as closely as
reasonably possible. Such calculation shall take into account, among other
things, the kind and amount of securities, cash and other property that was
receivable upon such merger or consolidation by a holder of REIT Shares or
options, warrants or other rights relating thereto, and which a holder of
Partnership Units could have acquired had such Partnership Units been exchanged
immediately prior to such merger or consolidation. Such amendment to this
Agreement shall provide for adjustment to such method of calculation, which
shall be as nearly equivalent as may be practicable to the adjustments provided
for with respect to the Conversion Factor. The Survivor also shall in good faith
modify the definition of REIT Shares and make such amendments to Sections 8.4
and 8.5 hereof so as to approximate the existing rights and obligations set
forth in Sections 8.4 and 8.5 as closely as reasonably possible. The above
provisions of this Section 7.1(d) shall similarly apply to successive mergers or
consolidations permitted hereunder.
 
(e) Notwithstanding Section 7.1(c),
 
(i) a General Partner may transfer all or any portion of its General Partnership
Interest to (A) a wholly-owned Subsidiary of such General Partner or (B) the
owner of all of the ownership interests of such General Partner, and following a
transfer of all of its General Partnership Interest, may withdraw as General
Partner; and
 
(ii) the General Partner may engage in any transaction that is not required to
be submitted to the vote of the holders of the REIT Shares by (A) law or (B) the
rules of any national securities exchange on which the REIT Shares are Listed.
 
7.2 Admission of a Substitute or Additional General Partner. A Person shall be
admitted as a substitute or additional General Partner of the Partnership only
if the following terms and conditions are satisfied:
 
(a) the Person to be admitted as a substitute or additional General Partner
shall have accepted and agreed to be bound by all the terms and provisions of
this Agreement by executing a counterpart thereof and such other documents or
instruments as may be required or appropriate in order to effect the admission
of such Person as a General Partner, and a certificate evidencing the admission
of such Person as a General Partner shall have been filed for recordation and
all other actions required by Section 2.5 hereof in connection with such
admission shall have been performed;
 
(b) if the Person to be admitted as a substitute or additional General Partner
is a corporation or a partnership it shall have provided the Partnership with
evidence satisfactory to counsel for the Partnership of such Person’s authority
to become a General Partner and to be bound by the terms and provisions of this
Agreement; and
 
(c) counsel for the Partnership shall have rendered an opinion (relying on such
opinions from other counsel and the state or any other jurisdiction as may be
necessary) that (x) the admission of the person to be admitted as a substitute
or additional General Partner is in conformity with the Act and (y) none of the
actions taken in connection with the admission of such Person as a substitute or
additional General Partner will cause (i) the Partnership to be classified other
than as a partnership for federal tax purposes, or (ii) the loss of any Limited
Partner’s limited liability.
 
7.3 Effect of Bankruptcy, Withdrawal, Death or Dissolution of a General Partner.
 
(a) Upon the occurrence of an Event of Bankruptcy as to a General Partner (and
its removal pursuant to Section 7.4(a) hereof) or the death, withdrawal, deemed
removal or dissolution of a General Partner (except that, if a General Partner
is on the date of such occurrence a partnership, the withdrawal, death,
dissolution, Event of Bankruptcy as to, or removal of a partner in, such
partnership shall be deemed not to be a dissolution of such General Partner if
the business of such General Partner is continued by the remaining partner or
partners), the Partnership shall be dissolved and terminated unless the
Partnership is continued pursuant to Section 7.3(b) hereof. The merger of the
General Partner with or into any entity that is admitted as a substitute or
successor General Partner pursuant to Section 7.2 hereof shall not be deemed to
be the withdrawal, dissolution or removal of the General Partner.
 
(b) Following the occurrence of an Event of Bankruptcy as to a General Partner
(and its removal pursuant to Section 7.4(a) hereof) or the death, withdrawal,
removal or dissolution of a General Partner (except that, if a General Partner
is, on the date of such occurrence, a partnership, the withdrawal of, death,
dissolution, Event of Bankruptcy as to, or removal of a partner in, such
partnership shall be deemed not to be a dissolution of such General Partner if
the business of such General Partner is continued by the remaining partner or
partners), the Limited Partners, within ninety (90) days after such occurrence,
may elect to continue the business of the Partnership for the balance of the
term specified in Section 2.4 hereof by selecting, subject to Section 7.2 hereof
and any other provisions of this Agreement, a substitute General Partner by
consent of a majority in interest of the Limited Partners. If the Limited
Partners elect to continue the business of the Partnership and admit a
substitute General Partner, the relationship with the Partners and of any Person
who has acquired an interest of a Partner in the Partnership shall be governed
by this Agreement.
 
7.4 Removal of a General Partner.
 
(a) Upon the occurrence of an Event of Bankruptcy as to, or the dissolution of,
a General Partner, such General Partner shall be deemed to be removed
automatically; provided, however, that if a General Partner is on the date of
such occurrence a partnership, the withdrawal, death or dissolution of, Event of
Bankruptcy as to, or removal of, a partner in, such partnership shall be deemed
not to be a dissolution of the General Partner if the business of such General
Partner is continued by the remaining partner or partners. The Limited Partners
may not remove the General Partner, with or without cause.
 
(b) If a General Partner has been removed pursuant to this Section 7.4 and the
Partnership is continued pursuant to Section 7.3 hereof, such General Partner
shall promptly transfer and assign its General Partnership Interest in the
Partnership to the substitute General Partner approved by a majority in interest
of the Limited Partners in accordance with Section 7.3(b) hereof and otherwise
admitted to the Partnership in accordance with Section 7.2 hereof. At the time
of assignment, the removed General Partner shall be entitled to receive from the
substitute General Partner the fair market value of the General Partnership
Interest of such removed General Partner as reduced by any damages caused to the
Partnership by such General Partner. Such fair market value shall be determined
by an appraiser mutually agreed upon by the General Partner and a majority in
interest of the Limited Partners within ten (10) days following the removal of
the General Partner. In the event that the parties are unable to agree upon an
appraiser, the removed General Partner and a majority in interest of the Limited
Partners each shall select an appraiser. Each such appraiser shall complete an
appraisal of the fair market value of the removed General Partner’s General
Partnership Interest within thirty (30) days of the General Partner’s removal,
and the fair market value of the removed General Partner’s General Partnership
Interest shall be the average of the two appraisals; provided, however, that if
the higher appraisal exceeds the lower appraisal by more than 20% of the amount
of the lower appraisal, the two appraisers, no later than forty (40) days after
the removal of the General Partner, shall select a third appraiser who shall
complete an appraisal of the fair market value of the removed General Partner’s
General Partnership Interest no later than sixty (60) days after the removal of
the General Partner. In such case, the fair market value of the removed General
Partner’s General Partnership Interest shall be the average of the two
appraisals closest in value.
 
(c) The General Partnership Interest of a removed General Partner, until
transfer under Section 7.4(b), shall be converted to that of a special Limited
Partner; provided, however, such removed General Partner shall not have any
rights to participate in the management and affairs of the Partnership, and
shall not be entitled to any portion of the income, expense, profit, gain or
loss allocations or cash distributions allocable or payable, as the case may be,
to the Limited Partners. Instead, such removed General Partner shall receive and
be entitled only to retain distributions or allocations of such items that it
would have been entitled to receive in its capacity as General Partner, until
the transfer is effective pursuant to Section 7.4(b).
 
(d) All Partners shall have given and hereby do give such consents, shall take
such actions and shall execute such documents as shall be legally necessary,
desirable and sufficient to effect all the foregoing provisions of this Section.
 
ARTICLE 8
 
RIGHTS AND OBLIGATIONS OF THE LIMITED PARTNERS
 
8.1 Management of the Partnership. The Limited Partners shall not participate in
the management or control of Partnership business nor shall they transact any
business for the Partnership, nor shall they have the power to sign for or bind
the Partnership, such powers being vested solely and exclusively in the General
Partner.
 
8.2 Power of Attorney. Each Limited Partner hereby irrevocably appoints the
General Partner its true and lawful attorney-in-fact, who may act for each
Limited Partner and in its name, place and stead, and for its use and benefit,
to sign, acknowledge, swear to, deliver, file or record, at the appropriate
public offices, any and all documents, certificates, and instruments as may be
deemed necessary or desirable by the General Partner to carry out fully the
provisions of this Agreement and the Act in accordance with their terms, which
power of attorney is coupled with an interest and shall survive the death,
dissolution or legal incapacity of the Limited Partner, or the transfer by the
Limited Partner of any part or all of its Partnership Interest.
 
8.3 Limitation on Liability of Limited Partners. No Limited Partner shall be
liable for any debts, liabilities, contracts or obligations of the Partnership.
A Limited Partner shall be liable to the Partnership only to make payments of
its Capital Contribution, if any, as and when due hereunder. After its Capital
Contribution is fully paid, no Limited Partner shall, except as otherwise
required by the Act, be required to make any further Capital Contributions or
other payments or lend any funds to the Partnership.
 
8.4 Redemption Right.
 
(a) Subject to Sections 8.4(b), 8.4(c), 8.4(d), 8.4(e), 8.4(f) and 8.5 hereof,
the provisions of any agreements between the Partnership and one or more Limited
Partners with respect to Partnership Units held by them, each Limited Partner,
other than the General Partner (except as permitted below), shall, after holding
its Partnership Units for at least one year (other than the Advisor and its
Affiliates), have the right (subject to the terms and conditions set forth
herein) to require the Partnership to redeem (a “Redemption”) all or a portion
of the Partnership Units (other than Special OP Units), held by such Limited
Partner (such Units, the “Tendered Units”), in exchange (a “Redemption Right”),
alternatively, for either REIT Shares or the Cash Amount, as determined by the
General Partner in its sole discretion. The consideration payable in respect of
Tendered Units shall be issued or paid, as the case may be, on the Specified
Redemption Date. Any 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 exercising the Redemption Right (the “Tendering Party”). A
Limited Partner may not exercise the Redemption Right for less than 1,000
Partnership Units or, if such Limited Partner holds less than 1,000 Partnership
Units, all of the Partnership Units held by such Partner. The Tendering Party
shall have no right, with respect to any Partnership Units so redeemed, to
receive any distribution paid with respect to Partnership Units if the record
date for such distribution is on or after the Specified Redemption Date.
Notwithstanding the foregoing, the General Partner will be entitled to have its
Partnership Units redeemed for the Cash Amount (an “Asset Acquisition
Redemption”), at any time and under the circumstances described in Section 5.6
hereof.
 
(b) If the General Partner elects to cause the Tendered Units to be exchanged
for REIT Shares rather than the Cash Amount, then the Partnership shall direct
the General Partner to issue and deliver such REIT Shares to the Tendering Party
pursuant to the terms set forth in this Section 8.4(b), in which case, (i) the
General Partner, acting as a distinct legal entity, shall assume directly the
Partnership’s redemption obligation with respect thereto and shall satisfy the
Tendering Party’s exercise of its Redemption Right, and (ii) such transaction
shall be treated, for federal income tax purposes, as a transfer by the
Tendering Party of such Tendered Units to the General Partner in exchange for
REIT Shares. The percentage of the Tendered Units which are to be so exchanged
for REIT Shares (rather than the Cash Amount) is referred to as the “Applicable
Percentage.” In making such election to exchange Tendered Units for cash or REIT
Shares, the General Partner shall act in a fair, equitable and reasonable manner
that neither prefers one group or class of Limited Partners over another nor
discriminates against a group or class of Limited Partners. If the General
Partner determines to redeem any Tendered Units for REIT Shares, rather than the
Cash Amount, on the Specified Redemption Date, the Tendering Party shall sell
such number of the Tendered Units to the General Partner in exchange for a
number of REIT Shares equal to the product of the REIT Shares Amount and the
Applicable Percentage. Such amount of REIT Shares shall be delivered by the
General Partner as duly authorized, validly issued, fully paid and nonassessable
REIT Shares, free of any pledge, lien, encumbrance or restriction, other than
the Ownership Limit (as calculated in accordance with the Charter) and other
restrictions provided in the Articles of Incorporation, the bylaws of the
General Partner, the Securities Act and relevant state securities or “blue sky”
laws. Notwithstanding the provisions of Section 8.4(a) and this Section 8.4(b),
the Tendering Parties shall have no rights under this Agreement that would
otherwise be prohibited under the Charter.
 
(c) In connection with an exercise of Redemption Rights pursuant to this Section
8.4, the Tendering Party shall submit the following to the General Partner, in
addition to the Notice of Redemption:
 
(i) A written affidavit, dated the same date as the Notice of Redemption, (a)
disclosing the actual and constructive ownership, as determined for purposes of
Code Sections 856(a)(6) and 856(h), of REIT Shares by (i) such Tendering Party
and (ii) any Related Party and (b) representing that, after giving effect to the
Redemption, neither the Tendering Party nor any Related Party will own REIT
Shares in excess of the Ownership Limit (or, if applicable the Excepted Holder
Limit);
 
(ii) A written representation that neither the Tendering Party nor any Related
Party has any intention to acquire any additional REIT Shares prior to the
closing of the Redemption on the Specified Redemption Date; and
 
(iii) An undertaking to certify, at and as a condition to the closing of the
Redemption on the Specified Redemption Date, that either (a) the actual and
constructive ownership of REIT Shares by the Tendering Party and any Related
Party remain unchanged from that disclosed in the affidavit required by Section
8.4(c)(i) or (b) after giving effect to the Redemption, neither the Tendering
Party nor any Related Party shall own REIT Shares in violation of the Ownership
Limit (or, if applicable, the Excepted Holder Limit).
 
(iv) Any other documents as the General Partner may reasonably require in
connection with the issuance of REIT Shares upon the exercise of the Redemption
Right.
 
(d) Any Cash Amount to be paid to a Tendering Party pursuant to this Section 8.4
shall be paid on the Specified Redemption Date; provided, however, that the
General Partner may elect to cause the Specified Redemption Date to be delayed
for up to an additional 180 days to the extent required for the General Partner
to provide financing to be used to make such payment of the Cash Amount, by
causing the issuance of additional REIT Shares or otherwise. Notwithstanding the
foregoing, the General Partner agrees to use its commercially reasonable efforts
to cause the closing of the acquisition of Tendered Units hereunder to occur as
quickly as reasonably possible.
 
(e) Notwithstanding any other provision of this Agreement, the General Partner
shall place appropriate restrictions on the ability of the Limited Partners to
exercise their Redemption Rights to prevent, among other things, (i) any person
from owning shares in excess of the Ownership Limit and the Excepted Holder
Limit, (ii) the General Partner’s common stock from being owned by less than 100
persons, (iii) the General Partner from being “closely held” within the meaning
of section 856(h) of the Code, (iv) violations or what would be likely to
constitute a violation of any applicable federal or state securities law, (v)
violations of any provision of the General Partner’s Charter or Bylaws and (vi)
as and if deemed necessary to ensure that the Partnership does not constitute a
“publicly traded partnership” under section 7704 of the Code. If and when the
General Partner determines that imposing such restrictions is necessary, the
General Partner shall give prompt written notice thereof (a “Restriction
Notice”) to each of the Limited Partners holding Partnership Units, which notice
shall be accompanied by a copy of an opinion of counsel to the Partnership which
states that, in the opinion of such counsel, restrictions are necessary in order
to avoid having the Partnership be treated as a “publicly traded partnership”
under section 7704 of the Code.
 
(f) A redemption fee may be charged in connection with an exercise of Redemption
Rights pursuant to this Section 8.4.
 
8.5 Redemption or Conversion of Special OP Units and Partnership Units owned by
the Advisor or its Affiliates.
 
(a) Termination Events. In connection with: (i) a Listing, (ii) a merger,
consolidation or sale of substantially all of the Partnership’s assets or any
similar transaction, (iii) any transaction pursuant to which a majority of the
Directors then in office are replaced or removed which is not otherwise
described in (ii) above, or (iv) the termination or nonrenewal of the Advisory
Agreement for any reason other than by the Advisor and other than in connection
with (i), (ii) or (iii) above (the events described in (i) through (iv) are
hereinafter referred to individually as a “Termination Event” and collectively
as the “Termination Events”), then at the election of the Special OP Unitholder,
and as further provided in Section 8.5(b) below, such holder may (1) exchange
its Special OP Units for Partnership Units, (2) exchange its Special OP Units
for Partnership Units and immediately thereafter redeem its Partnership Units
received in such exchange pursuant to Section 8.5(b) hereof, or (3) retain its
Special OP Units.
 
(b) Special OP Unit Exchange; Redemption of Partnership Units of the Special OP
Unitholder, the Advisor or its Affiliates; Entitlement to Distributions.
 
(i) If the Special OP Unitholder elects to exchange its Special OP Units for
Partnership Units in connection with a Termination Event, then the Special OP
Units shall be exchanged for a number of Partnership Units (the “Special OP Unit
Value”) equal in value to the aggregate amount of distributions that would have
been made with respect to the Special OP Units under Section 5.2(b)(ii) if all
assets (subject to their liabilities) of the Partnership were sold for their
fair market value, as determined in good faith by the Directors of the General
Partner in office prior to the Termination Event and in the manner set forth
below, any remaining liabilities of the Partnership were satisfied in full in
cash according to their terms and assuming for these purposes that all such
remaining liabilities had matured, and Net Sales Proceeds (after satisfaction of
such liabilities) were distributed in full pursuant to Section 5.2(b). The
Special OP Unit Value shall be determined (1) in connection with a Termination
Event described in Section 8.5(a)(i) above, by reference to the market value of
the REIT Shares based upon the average closing sale price, or average of bid and
asked prices (if closing prices are not available) during a period of thirty
(30) days during which such shares are traded beginning 90 days after the
Listing; (2) in connection with a Termination Event described in Section
8.5(a)(ii) above, by reference to the value of the consideration received or to
be received by the holders of REIT Shares and the implied value of the assets
and liabilities of the General Partner and the Partnership as a result thereof,
or (3) in connection with a Termination Event described in Sections 8.5(a)(iii)
or 8.5(a)(iv) above, by reference to the fair market value of the assets and
liabilities of the General Partner and the Partnership as determined by an
independent third party mutually agreed to by the Partnership on the one hand
and the holder of the applicable Special OP Units on the other. The valuation
mechanisms referred to in the immediately preceding clauses (1) through (3) are
hereinafter referred to as the “Valuation Mechanisms”. If multiple Termination
Events are triggered in connection with a series of related events, the Special
OP Unitholder, in its sole discretion, may determine which Valuation Mechanism
should be used to value the Partnership Units and determine the Special OP Unit
Value. In the case of any Termination Event other than a Listing, the exchange
of the Special OP Units for Partnership Units shall occur simultaneously with
the occurrence or consummation of such Termination Event or as soon as is
reasonably practicable thereafter, and in the case of a Listing, the exchange of
the Special OP Units for Partnership Units shall occur within 125 days after the
Listing shall have occurred.
 
(ii) If the Special OP Unitholder elects to receive Partnership Units in
exchange for its Special OP Units in connection with the Termination Event but
not to have such Partnership Units redeemed, then such Partnership Units shall
thereafter be subject to all of the applicable provisions of this Agreement,
including Section 8.5(d) hereof. If the Special OP Unitholder elects to
immediately redeem its Partnership Units, then the Special OP Unitholder shall
receive, at its option, upon redemption of such Partnership Units, cash (or in
the case of a Termination Event described in Section 8.5(a)(iv) hereof, a
promissory note) or REIT Shares with an aggregate value equal to the Special OP
Unit Value as determined under subsection (i) of this Section 8.5(b).
Notwithstanding anything to the contrary above, in the case of any Termination
Event described in Section 8.5(a)(iv) hereof, the holder may elect to receive,
at its option, upon redemption of such Partnership Units, a promissory note or
REIT Shares.  If the holder elects payment in the form of a promissory note,
such promissory note shall be payable in 12 equal quarterly installments and
shall bear interest on the unpaid balance at a rate determined by the Directors
of the General Partner to be fair and reasonable, provided, however, that no
payment will be made in any quarter in which such payment would  impair the
General Partner's capital or jeopardize the General Partner's REIT status, in
which case any such payment or payments will be delayed until the next quarter
in which payment would not  impair the General Partner's capital or jeopardize
the General Partner's REIT status.
 
(iii) Notwithstanding anything to the contrary contained in Section 8.4 hereof,
if in connection with a Termination Event the Advisor and any of its Affiliates
hold Partnership Units that were not received in connection with such
Termination Event, such holder or holders may elect to have such Partnership
Units valued in the manner set forth in Section 8.5(b)(i) and, using the
applicable Valuation Mechanism, redeemed for the resulting amount of
consideration.  Such consideration shall be payable in the same form and at the
same time that any consideration that would be payable upon a redemption
described in subparagraph (i) or (ii) of this Section 8.5(b) would be due.
 
(iv) In connection with a Termination Event, the Special OP Unitholder may elect
not to have the Special OP Units exchanged for Partnership Units. In such event,
the Special OP Unitholder shall receive a cash distribution or a promissory note
equal to the aggregate amount that the Special OP Unitholder would have been
entitled to receive under subparagraph (ii) of this Section 8.5(b) above if the
Special OP Unitholder had elected to exchange the Special OP Units into
Partnership Units which were thereafter immediately redeemed; provided, however
that the Special OP Units shall not, under such circumstances, be exchanged for
Partnership Units and shall instead remain outstanding and subject to all of the
applicable provisions of this Agreement.
 
(v) If REIT Shares are to be issued in connection with the redemption of
Partnership Units pursuant to this Section 8.5(b), then the General Partner
shall issue such REIT Shares in accordance herewith and the exchange of
Partnership Units shall be treated in accordance with Section 8.4(b) as if the
Partnership Units were Tendered Units. All cash payments required to made
pursuant to this Section 8.5 shall be made by wire transfer of immediately
available funds to an account designated by the recipient of such payment.
 
(c) Limitation on Exchange and Redemption. Notwithstanding anything herein to
the contrary, no exchange or redemption pursuant to Section 8.5(b) shall be
permitted unless and until OP Unitholders have received (or are deemed to have
received pursuant to the deemed valuations set forth in such sections)
aggregate, cumulative distributions from the Partnership to OP Unitholders for
all years from operating income, sales proceeds and other sources in an amount
equal to (i) the sum of the aggregate capital contributions to the Partnership
by the OP Unitholders for all years plus (ii) an 8.0% cumulative non-compounded
annual pre-tax return on the amount described in the immediately preceding
subclause (i).
 
(d) Redemption of Partnership Units Following a Termination Event. If the
Advisor or any of its Affiliates retains any of their Partnership Units
following a Termination Event, the Advisor and its Affiliates shall have the
right to redeem such Partnership Units pursuant to all of the terms and
conditions of Section 8.4 hereof; provided, however, that the holder of such
Partnership Units and not the General Partner shall be entitled to elect cash or
REIT Shares.
 
ARTICLE 9
 
TRANSFERS OF LIMITED PARTNERSHIP INTERESTS
 
9.1 Purchase for Investment.
 
(a) Each Limited Partner hereby represents and warrants to the General Partner
and to the Partnership that the acquisition of his Partnership Interest is made
as a principal for his account for investment purposes only and not with a view
to the resale or distribution of such Partnership Interest.
 
(b) Each Limited Partner agrees that he will not sell, assign or otherwise
transfer his Partnership Interest or any fraction thereof, whether voluntarily
or by operation of law or at judicial sale or otherwise, to any Person who does
not make the representations and warranties to the General Partner set forth in
Section 9.1(a) above and similarly agree not to sell, assign or transfer such
Partnership Interest or fraction thereof to any Person who does not similarly
represent, warrant and agree.
 
9.2 Restrictions on Transfer of Limited Partnership Interests.
 
(a) Subject to the provisions of Section 9.2(b) and 9.2(c), no Limited Partner
may offer, sell, assign, hypothecate, pledge or otherwise transfer all or any
portion of his Limited Partnership Interest, or any of such Limited Partner’s
economic rights as a Limited Partner, whether voluntarily or by operation of law
or at judicial sale or otherwise (collectively, a “Transfer”) without the prior
consent of the General Partner, which consent may be granted or withheld in its
sole and absolute discretion. Any such purported transfer undertaken without
such consent shall be considered to be null and void ab initio and shall not be
given effect. The General Partner may require, as a condition of any Transfer to
which it consents, that the transferor assume all costs incurred by the
Partnership in connection therewith.
 
(b) No Limited Partner may withdraw from the Partnership other than: (i) as a
result of a permitted Transfer (i.e., a Transfer consented to as contemplated by
clause (a) above or clause (c) below or a Transfer pursuant to Section 9.5
below) of all of its Partnership Interest pursuant to this Article 9, (ii)
pursuant to a redemption of all of its Partnership Units pursuant to Section 8.4
or (iii) pursuant to the redemption of the Limited Partner’s Special OP Units
and Partnership Units pursuant to Section 8.5. Upon the permitted Transfer or
redemption of all of a Limited Partner’s Partnership Units and Special OP Units,
if any, such Limited Partner shall cease to be a Limited Partner.
 
(c) Notwithstanding Section 9.2(a) and subject to Sections 9.2(d), 9.2(e) and
9.2(f) below, a Limited Partner may not Transfer, without the prior consent of
the General Partner, which consent will not be unreasonably withheld, all or a
portion of its Partnership Interest to (i) a parent or parent’s spouse, natural
or adopted descendant or descendants, spouse of such descendant, or brother or
sister, or a trust created by such Limited Partner for the benefit of such
Limited Partner and/or any such person(s), of which trust such Limited Partner
or any such person(s) is a trustee, (ii) a corporation controlled by a Person or
Persons named in (i) above, or (iii) if the Limited Partner is an entity, its
beneficial owners.
 
(d) No Limited Partner may effect a Transfer of its Limited Partnership
Interest, in whole or in part, if, in the opinion of legal counsel for the
Partnership, such proposed Transfer would require the registration of the
Limited Partnership Interest under the Securities Act or would otherwise violate
any applicable federal or state securities or blue sky law (including investment
suitability standards).
 
(e) No Transfer by a Limited Partner of its Partnership Interest, in whole or in
part, may be made to any Person if (i) in the opinion of legal counsel for the
Partnership, the transfer would result in the Partnership’s being treated as an
association taxable as a corporation (other than a qualified REIT subsidiary
within the meaning of Section 856(i) of the Code), (ii) in the opinion of legal
counsel for the Partnership, it would adversely affect the ability of the
General Partner to continue to qualify as a REIT or subject the General Partner
to any additional taxes under Section 857 or Section 4981 of the Code, 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.
 
(f) No Transfer by a Limited Partner of any Partnership Interest may be made to
a lender to the Partnership or any Person who is related (within the meaning of
Regulations Section 1.752-4(b)) to any lender to the Partnership whose loan
constitutes a nonrecourse liability (within the meaning of Regulations Section
1.752-1(a)(2)), without the consent of the General Partner, which may be
withheld in its sole and absolute discretion, provided that as a condition to
such consent the lender will be required to enter into an arrangement with the
Partnership and the General Partner to exchange or redeem for the Cash Amount
any Partnership Units in which a security interest is held simultaneously with
the time at which such lender would be deemed to be a Partner in the Partnership
for purposes of allocating liabilities to such lender under Section 752 of the
Code.
 
(g) Any Transfer in contravention of any of the provisions of this Article 9
shall be void and ineffectual and shall not be binding upon, or recognized by,
the Partnership.
 
(h) Prior to the consummation of any Transfer under this Article 9, the
transferor and/or the transferee shall deliver to the General Partner such
opinions, certificates and other documents as the General Partner shall request
in connection with such Transfer.
 
9.3 Admission of Substitute Limited Partner.
 
(a) Subject to the other provisions of this Article 9, an assignee of the
Limited Partnership Interest of a Limited Partner (which shall be understood to
include any purchaser, transferee, donee, or other recipient of any disposition
of such Limited Partnership Interest) shall be deemed admitted as a Limited
Partner of the Partnership only with the consent of the General Partner, which
consent may be granted or withheld in its sole and absolute discretion, and upon
the satisfactory completion of the following:
 
(i) The assignee shall have accepted and agreed to be bound by the terms and
provisions of this Agreement by executing a counterpart or an amendment thereof,
including a revised Exhibit A, and such other documents or instruments as the
General Partner may require in order to effect the admission of such Person as a
Limited Partner.
 
(ii) To the extent required, an amended Certificate evidencing the admission of
such Person as a Limited Partner shall have been signed, acknowledged and filed
for record in accordance with the Act.
 
(iii) The assignee shall have delivered a letter containing the representation
set forth in Section 9.1(a) hereof and the agreement set forth in Section 9.1(b)
hereof.
 
(iv) If the assignee is a corporation, partnership or trust, the assignee shall
have provided the General Partner with evidence satisfactory to counsel for the
Partnership of the assignee’s authority to become a Limited Partner under the
terms and provisions of this Agreement.
 
(v) The assignee shall have executed a power of attorney containing the terms
and provisions set forth in Section 8.2 hereof.
 
(vi) The assignee shall have paid all legal fees and other expenses of the
Partnership and the General Partner and filing and publication costs in
connection with its substitution as a Limited Partner.
 
(vii) The assignee has obtained the prior written consent of the General Partner
to its admission as a Substitute Limited Partner, which consent may be given or
denied in the exercise of the General Partner’s sole and absolute discretion.
 
(b) For the purpose of allocating profits and losses and distributing cash
received by the Partnership, a Substitute Limited Partner shall be treated as
having become, and appearing in the records of the Partnership as, a Partner
upon the filing of the Certificate described in Section 9.3(a)(ii) hereof or, if
no such filing is required, the later of the date specified in the transfer
documents or the date on which the General Partner has received all necessary
instruments of transfer and substitution.
 
(c) The General Partner shall cooperate with the Person seeking to become a
Substitute Limited Partner by preparing the documentation required by this
Section and making all official filings and publications. The Partnership shall
take all such action as promptly as practicable after the satisfaction of the
conditions in this Article 9 to the admission of such Person as a Limited
Partner of the Partnership.
 
9.4 Rights of Assignees of Partnership Interests.
 
(a) Subject to the provisions of Sections 9.1 and 9.2 hereof, except as required
by operation of law, the Partnership shall not be obligated for any purposes
whatsoever to recognize the assignment by any Limited Partner of its Partnership
Interest until the Partnership has received notice thereof.
 
(b) Any Person who is the assignee of all or any portion of a Limited Partner’s
Limited Partnership Interest, but does not become a Substitute Limited Partner
and desires to make a further assignment of such Limited Partnership Interest,
shall be subject to all the provisions of this Article 9 to the same extent and
in the same manner as any Limited Partner desiring to make an assignment of its
Limited Partnership Interest.
 
9.5 Effect of Bankruptcy, Death, Incompetence or Termination of a Limited
Partner. The occurrence of an Event of Bankruptcy as to a Limited Partner, the
death of a Limited Partner or a final adjudication that a Limited Partner is
incompetent (which term shall include, but not be limited to, insanity) shall
not cause the termination or dissolution of the Partnership, and the business of
the Partnership shall continue if an order for relief in a bankruptcy proceeding
is entered against a Limited Partner, the trustee or receiver of his estate or,
if he dies, his executor, administrator or trustee, or, if he is finally
adjudicated incompetent, his committee, guardian or conservator, shall have the
rights of such Limited Partner for the purpose of settling or managing his
estate property and such power as the bankrupt, deceased or incompetent Limited
Partner possessed to assign all or any part of his Partnership Interest and to
join with the assignee in satisfying conditions precedent to the admission of
the assignee as a Substitute Limited Partner.
 
9.6 Joint Ownership of Interests. A Partnership Interest may be acquired by two
individuals as joint tenants with right of survivorship, provided that such
individuals either are married or are related and share the same home as tenants
in common. The written consent or vote of both owners of any such jointly held
Partnership Interest shall be required to constitute the action of the owners of
such Partnership Interest; provided, however, that the written consent of only
one joint owner will be required if the Partnership has been provided with
evidence satisfactory to the counsel for the Partnership that the actions of a
single joint owner can bind both owners under the applicable laws of the state
of residence of such joint owners. Upon the death of one owner of a Partnership
Interest held in a joint tenancy with a right of survivorship, the Partnership
Interest shall become owned solely by the survivor as a Limited Partner and not
as an assignee. The Partnership need not recognize the death of one of the
owners of a jointly-held Partnership Interest until it shall have received
notice of such death. Upon notice to the General Partner from either owner, the
General Partner shall cause the Partnership Interest to be divided into two
equal Partnership Interests, which shall thereafter be owned separately by each
of the former owners.
 
ARTICLE 10
 
BOOKS AND RECORDS; ACCOUNTING; TAX MATTERS
 
10.1 Books and Records. At all times during the continuance of the Partnership,
the Partners shall keep or cause to be kept at the Partnership’s specified
office true and complete books of account in accordance with generally accepted
accounting principles, including: (a) a current list of the full name and last
known business address of each Partner, (b) a copy of the Certificate of Limited
Partnership and all Certificates of amendment thereto, (c) copies of the
Partnership’s federal, state and local income tax returns and reports, (d)
copies of this Agreement and amendments thereto and any financial statements of
the Partnership for the three most recent years and (e) all documents and
information required under the Act. Any Partner or its duly authorized
representative, upon paying the costs of collection, duplication and mailing,
shall be entitled to inspect or copy such records during ordinary business
hours.
 
10.2 Custody of Partnership Funds; Bank Accounts.
 
(a) All funds of the Partnership not otherwise invested shall be deposited in
one or more accounts maintained in such banking or brokerage institutions as the
General Partner shall determine, and withdrawals shall be made only on such
signature or signatures as the General Partner may, from time to time,
determine.
 
(b) All deposits and other funds not needed in the operation of the business of
the Partnership may be invested by the General Partner in investment grade
instruments (or investment companies whose portfolio consists primarily
thereof), government obligations, certificates of deposit, bankers’ acceptances
and municipal notes and bonds. The funds of the Partnership shall not be
commingled with the funds of any other Person except for such commingling as may
necessarily result from an investment in those investment companies permitted by
this Section 10.2(b).
 
10.3 Fiscal and Taxable Year. The fiscal and taxable year of the Partnership
shall be the calendar year.
 
10.4 Annual Tax Information and Report. Within seventy-five (75) days after the
end of each fiscal year of the Partnership, the General Partner shall furnish to
each person who was a Limited Partner at any time during such year the tax
information necessary to file such Limited Partner’s individual tax returns as
shall be reasonably required by law.
 
10.5 Tax Matters Partner; Tax Elections; Special Basis Adjustments.
 
(a) The General Partner shall be the Tax Matters Partner of the Partnership
within the meaning of Section 6231(a)(7) of the Code. As Tax Matters Partner,
the General Partner shall have the right and obligation to take all actions
authorized and required, respectively, by the Code for the Tax Matters Partner.
The General Partner shall have the right to retain professional assistance in
respect of any audit of the Partnership by the Service and all out-of-pocket
expenses and fees incurred by the General Partner on behalf of the Partnership
as Tax Matters Partner shall constitute Partnership expenses. In the event the
General Partner receives notice of a final Partnership adjustment under Section
6223(a)(2) of the Code, the General Partner shall either (i) file a court
petition for judicial review of such final adjustment within the period provided
under Section 6226(a) of the Code, a copy of which petition shall be mailed to
all Limited Partners on the date such petition is filed, or (ii) mail a written
notice to all Limited Partners, within such period, that describes the General
Partner’s reasons for determining not to file such a petition.
 
(b) All elections required or permitted to be made by the Partnership under the
Code or any applicable state or local tax law shall be made by the General
Partner in its sole and absolute discretion.
 
(c) In the event of a transfer of all or any part of the Partnership Interest of
any Partner, the Partnership, at the option of the General Partner, may elect
pursuant to Section 754 of the Code to adjust the basis of the Partnership’s
assets. Notwithstanding anything contained in Article 5 of this Agreement, any
adjustments made pursuant to Section 754 of the Code shall affect only the
successor in interest to the transferring Partner and in no event shall be taken
into account in establishing, maintaining or computing Capital Accounts for the
other Partners for any purpose under this Agreement. Each Partner will furnish
the Partnership with all information necessary to give effect to such election.
 
10.6 Reports to Limited Partners.
 
(a) As soon as practicable after the close of each fiscal quarter (other than
the last quarter of the fiscal year), the General Partner shall cause to be
mailed to each Limited Partner a quarterly report containing financial
statements of the Partnership, or of the General Partner if such statements are
prepared solely on a consolidated basis with the General Partner, for such
fiscal quarter, presented in accordance with generally accepted accounting
principles. As soon as practicable after the close of each fiscal year, the
General Partner shall cause to be mailed to each Limited Partner an annual
report containing financial statements of the Partnership, or of the General
Partner if such statements are prepared solely on a consolidated basis with the
General Partner, for such fiscal year, presented in accordance with generally
accepted accounting principles. The annual financial statements shall be audited
by accountants selected by the General Partner.
 
(b) Any Partner shall further have the right to a private audit of the books and
records of the Partnership at the expense of such Partner, provided such audit
is made for Partnership purposes and is made during normal business hours.
 
10.7 Safe Harbor Election. The Partners agree that, in the event the Safe Harbor
Regulation is finalized, the Partnership shall be authorized and directed to
make the Safe Harbor Election and the Partnership and each Partner (including
any person to whom an interest in the Partnership is transferred in connection
with the performance of services) agrees to comply with all requirements of the
Safe Harbor with respect to all interests in the Partnership transferred in
connection with the performance of services while the Safe Harbor Election
remains effective. The Tax Matters Partner shall be authorized to (and shall)
prepare, execute, and file the Safe Harbor Election.
 
ARTICLE 11
 
AMENDMENT OF AGREEMENT; MERGER
 
The General Partner’s consent shall be required for any amendment to this
Agreement. The General Partner, without the consent of the Limited Partners, may
amend this Agreement in any respect or merge or consolidate the Partnership with
or into any other partnership or business entity (as defined in Section 17-211
of the Act) in a transaction pursuant to Section 7.1(c)(ii) or 7.1(c)(iii),
7.1(d) or 7.1(e) hereof; provided, however, that the following amendments and
any other merger or consolidation of the Partnership shall require the consent
of Limited Partners holding more than 67% of the Percentage Interests of the
Limited Partners and the Special OP Unitholder:
 
(a) any amendment affecting the operation of the Conversion Factor or the
Redemption Right (except as provided in Section 7.4(d) or 7.1(d) hereof) in a
manner adverse to the Limited Partners;
 
(b) any amendment that would adversely affect the rights of the Limited Partners
to receive the distributions payable to them hereunder, other than with respect
to the issuance of additional Partnership Units pursuant to Section 4.2 hereof;
or
 
(c) any amendment that would alter the Partnership’s allocations of profit and
loss to the Limited Partners, other than with respect to the issuance of
additional Partnership Units pursuant to Section 4.2 hereof; and any amendment
that would impose on any Limited Partner any obligation to make additional
Capital Contributions to the Partnership or otherwise alter such Limited
Partner’s right to receive distributions of cash or other property or
allocations of items of income, gain, deduction loss or credit shall require the
written consent of both the General Partner and any such Limited Partner. In
addition, any amendment to Section 8.5 shall require the consent of the Special
OP Unitholder, and any amendment to this Article 11 shall require the written
consent of all Partners.
 
ARTICLE 12
 
GENERAL PROVISIONS
 
12.1 Notices. All communications required or permitted under this Agreement
shall be in writing and shall be deemed to have been given when delivered
personally or upon deposit in the United States mail, registered, postage
prepaid return receipt requested, to the Partners at the addresses set forth in
Exhibit A attached hereto; provided, however, that any Partner may specify a
different address by notifying the General Partner in writing of such different
address. Notices to the Partnership shall be delivered at or mailed to its
specified office.
 
12.2 Survival of Rights. Subject to the provisions hereof limiting transfers,
this Agreement shall be binding upon and inure to the benefit of the Partners
and the Partnership and their respective legal representatives, successors,
transferees and assigns.
 
12.3 Additional Documents. Each Partner agrees to perform all further acts and
execute, swear to, acknowledge and deliver all further documents which may be
reasonable, necessary, appropriate or desirable to carry out the provisions of
this Agreement or the Act.
 
12.4 Severability. If any provision of this Agreement shall be declared illegal,
invalid, or unenforceable in any jurisdiction, then such provision shall be
deemed to be severable from this Agreement (to the extent permitted by law) and
in any event such illegality, invalidity or unenforceability shall not affect
the remainder hereof.
 
12.5 Entire Agreement. This Agreement and exhibits attached hereto constitute
the entire Agreement of the Partners and supersede all prior written agreements
and prior and contemporaneous oral agreements, understandings and negotiations
with respect to the subject matter hereof.
 
12.6 Pronouns and Plurals. When the context in which words are used in the
Agreement indicates that such is the intent, words in the singular number shall
include the plural and the masculine gender shall include the neuter or female
gender as the context may require.
 
12.7 Headings. The Article headings or sections in this Agreement are for
convenience only and shall not be used in construing the scope of this Agreement
or any particular Article.
 
12.8 Counterparts. This Agreement may be executed in several counterparts, each
of which shall be deemed to be an original copy and all of which together shall
constitute one and the same instrument binding on all parties hereto,
notwithstanding that all parties shall not have signed the same counterpart.
 
12.9 Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of Delaware; provided, however, that any
cause of action for violation of federal or state securities laws shall not be
governed by this Section 12.9.
 

 
 

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

 

IN WITNESS WHEREOF, the parties hereto have hereunder affixed their signatures
to this Amended and Restated Limited Partnership Agreement, all as of the 2nd
day of April, 2012.
 

 
GENERAL PARTNER:
 
HINES GLOBAL REIT, INC.,
a Maryland corporation
 
 
By: /s/ Charles N. Hazen
Name: Charles N. Hazen
Title: President and Chief Executive Officer
 
     
 
 
 
 
LIMITED PARTNERS:
 
HINES GLOBAL REIT ASSOCIATES LIMITED PARTNERSHIP
 
 
By:  Hines Interests Limited Partnership, its General Partner
        By:  Hines Holdings, Inc., its General Partner
 
                By: /s/ Charles M. Baughn
                      Name:  Charles M. Baughn
                      Title:    Executive Vice President
 
   

 
 

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

 

 
EXHIBIT A
 
PARTNERS, CAPITAL CONTRIBUTIONS AND PERCENTAGE INTERESTS
 
General Partner and Limited Partners (other than the Special OP Unitholder)
 

Partner
Cash Contribution
Partnership Units
Percentage Interest
       
GENERAL PARTNER:
     
Hines Global REIT, Inc.
2800 Post Oak Boulevard, Suite 5000
Houston, Texas 77056-6118
$954,336,481
95,790,852
99.98%
ORIGINAL LIMITED PARTNERS:
     
Hines Global REIT Associates Limited Partnership
2800 Post Oak Boulevard, Suite 5000
Houston, Texas 77056-6118
$190,000
21,111
0.02%
TOTALS
$954,526,481
95,811,963
100.00%

 
Special OP Unitholder

Hines Global REIT Associates Limited Partnership
2800 Post Oak Boulevard, Suite 5000
Houston, Texas 77056-6118
 

 
 

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

 

EXHIBIT B
 
NOTICE OF EXERCISE OF REDEMPTION RIGHT
 
In accordance with Section 8.4 of the Limited Partnership Agreement (the
“Agreement”) of Hines Global REIT Properties LP, the undersigned hereby
irrevocably (i) presents for redemption _____________ Partnership Units in Hines
Global REIT Properties LP in accordance with the terms of the Agreement and the
Redemption Right referred to in Section 8.4 thereof, (ii) surrenders such
Partnership Units and all right, title and interest therein, and (iii) directs
that the Cash Amount or REIT Shares Amount (as defined in the Agreement) as
determined by the General Partner deliverable upon exercise of the Redemption
Right be delivered to the address specified below, and if REIT Shares (as
defined in the Agreement) are to be delivered, such REIT Shares be registered or
placed in the name(s) and at the address(es) specified below.
 
Dated:           ___________________ ___, _____
 
_________________________________
(Name of Limited Partner)
 
_________________________________
(Signature of Limited Partner)
 
_________________________________
(Mailing Address)
 
_________________________________
(City) (State) (Zip Code)
 
Signature Guaranteed by:
_________________________________
 
If REIT Shares are to be issued, issue to:
Name: _________________________________
 
Social Security
or Tax I.D. Number: ______________________
 

 
 

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