Exhibit 10.1

 

AMENDED AND RESTATED

 

AGREEMENT OF LIMITED PARTNERSHIP

 

OF

 

RLJ LODGING TRUST, L.P.

 

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TABLE OF CONTENTS

 

 

Page

 

 

ARTICLE I DEFINED TERMS

1

 

 

ARTICLE II ORGANIZATIONAL MATTERS

16

Section 2.1

Organization

16

Section 2.2

Name

17

Section 2.3

Registered Office And Agent; Principal Office

17

Section 2.4

Term

17

 

 

 

ARTICLE III PURPOSE

18

Section 3.1

Purpose And Business

18

Section 3.2

Powers

18

 

 

 

ARTICLE IV CAPITAL CONTRIBUTIONS AND ISSUANCES OF PARTNERSHIP INTERESTS

19

Section 4.1

Capital Contributions Of The Partners

19

Section 4.2

Issuances Of Partnership Interests

19

Section 4.3

No Preemptive Rights

21

Section 4.4

Other Contribution Provisions

21

Section 4.5

No Interest On Capital

21

Section 4.6

LTIP Units

21

Section 4.7

Conversion of LTIP Units

24

 

 

 

ARTICLE V DISTRIBUTIONS

28

Section 5.1

Requirement And Characterization Of Distributions

28

Section 5.2

Amounts Withheld

30

Section 5.3

Distributions Upon Liquidation

31

Section 5.4

Revisions To Reflect Issuance Of Partnership Interests

31

 

 

 

ARTICLE VI ALLOCATIONS

31

Section 6.1

Allocations For Capital Account Purposes

31

Section 6.2

Revisions To Allocations To Reflect Issuance Of Partnership Interests

34

 

 

 

ARTICLE VII MANAGEMENT AND OPERATIONS OF BUSINESS

34

Section 7.1

Management

34

Section 7.2

Certificate of Limited Partnership

39

Section 7.3

Title to Partnership Assets

39

 

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Section 7.4

Reimbursement of the General Partner

39

Section 7.5

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

43

Section 7.6

Transactions With Affiliates

45

Section 7.7

Indemnification

46

Section 7.8

Liability of the General Partner

48

Section 7.9

Other Matters Concerning the General Partner

49

Section 7.10

Reliance By Third Parties

50

Section 7.11

Restrictions on General Partner’s Authority

50

Section 7.12

Loans by Third Parties

50

 

 

 

ARTICLE VIII RIGHTS AND OBLIGATIONS OF LIMITED PARTNERS

51

Section 8.1

Limitation of Liability

51

Section 8.2

Management of Business

51

Section 8.3

Outside Activities of Limited Partners

51

Section 8.4

Return of Capital

51

Section 8.5

Rights of Limited Partners Relating to the Partnership

52

Section 8.6

Redemption Right

54

 

 

 

ARTICLE IX BOOKS, RECORDS, ACCOUNTING AND REPORTS

57

Section 9.1

Records and Accounting

57

Section 9.2

Fiscal Year

57

Section 9.3

Reports

57

 

 

 

ARTICLE X TAX MATTERS

58

Section 10.1

Preparation of Tax Returns

58

Section 10.2

Tax Elections

58

Section 10.3

Tax Matters Partner

59

Section 10.4

Organizational Expenses

60

Section 10.5

Withholding

60

 

 

 

ARTICLE XI TRANSFERS AND WITHDRAWALS

61

Section 11.1

Transfer

61

Section 11.2

Transfers of Partnership Interests of General Partner

62

Section 11.3

Limited Partners’ Rights to Transfer

63

Section 11.4

Substituted Limited Partners

64

Section 11.5

Assignees

65

Section 11.6

General Provisions

65

 

 

 

ARTICLE XII ADMISSION OF PARTNERS

67

Section 12.1

Admission of a Successor General Partner

67

Section 12.2

Admission of Additional Limited Partners

67

 

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Section 12.3

Amendment of Agreement and Certificate of Limited Partnership

68

 

 

 

ARTICLE XIII DISSOLUTION AND LIQUIDATION

69

Section 13.1

Dissolution

69

Section 13.2

Winding Up

70

Section 13.3

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

71

Section 13.4

Rights of Limited Partners

73

Section 13.5

Notice of Dissolution

73

Section 13.6

Cancellation of Certificate of Limited Partnership

73

Section 13.7

Reasonable Time for Winding Up

73

Section 13.8

Waiver of Partition

74

Section 13.9

Liability Of Liquidator

74

 

 

 

ARTICLE XIV AMENDMENT OF PARTNERSHIP AGREEMENT; MEETINGS

74

Section 14.1

Amendments

74

Section 14.2

Meetings of the Partners

76

 

 

 

ARTICLE XV GENERAL PROVISIONS

77

Section 15.1

Addresses and Notice

77

Section 15.2

Titles and Captions

77

Section 15.3

Pronouns And Plurals

78

Section 15.4

Further Action

78

Section 15.5

Binding Effect

78

Section 15.6

Creditors

78

Section 15.7

Waiver

78

Section 15.8

Counterparts

78

Section 15.9

Applicable Law

78

Section 15.10

Invalidity Of Provisions

79

Section 15.11

Power Of Attorney

79

Section 15.12

Entire Agreement

80

Section 15.13

No Rights As Shareholders

80

Section 15.14

Limitation To Preserve REIT Status

80

 

 

 

List of Exhibits:

 

 

Exhibit A — Partner Registry

Exhibit B — Capital Account Maintenance

Exhibit C — Special Allocation Rules

Exhibit D — Notice of Redemption

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

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

 

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FIRST AMENDED AND RESTATED

 

AGREEMENT OF LIMITED PARTNERSHIP

 

OF

 

RLJ LODGING TRUST, L.P.

 

THIS FIRST AMENDED AND RESTATED AGREEMENT OF LIMITED PARTNERSHIP, dated as of
May 13, 2011, is entered into by and among RLJ Lodging Trust, a Maryland real
estate investment trust, as the General Partner, and the Persons whose names are
set forth on the Partner Registry (as hereinafter defined) as Limited Partners,
together with any other Persons who become Partners in RLJ Lodging Trust L.P.
(the “Partnership”) as provided herein.

 

WHEREAS, on January 31, 2011, the General Partner formed the Partnership as a
limited partnership pursuant to Delaware law by the filing of the Certificate of
Limited Partnership with the Delaware Secretary of State;

 

WHEREAS, the General Partner and Thomas J. Baltimore (the “Organizational
Limited Partner”) entered into that certain Agreement of Limited Partnership of
the Partnership dated as of January 31, 2011 (the “Original Agreement”); and

 

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

 

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

 

ARTICLE I

DEFINED TERMS

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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distributed, reduced by any indebtedness either assumed by such Partner upon
such distribution or to which such property is subject at the time of
distribution.

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

“Conversion Factor” means 1.0; provided, however, that, if the General Partner
Entity (i) declares or pays a dividend on its outstanding Shares in Shares or
makes a distribution to all holders of its outstanding Shares in Shares and does
not make a corresponding distribution on Class A Units in Class A Units, (ii)
subdivides its outstanding Shares, or (iii) combines its outstanding Shares into
a smaller number of Shares, the Conversion Factor shall be adjusted by
multiplying the Conversion Factor by a fraction, the numerator of which shall be
the number of Shares issued and outstanding on the record date for such
dividend, distribution, subdivision or combination (assuming for such purposes
that such dividend, distribution, subdivision or combination has occurred as of
such time) and the denominator of which shall be the actual number of Shares
(determined without the above assumption) issued and outstanding on the record
date for such dividend, distribution, subdivision or combination; and provided
further that if an entity shall cease to be the General Partner Entity (the
“Predecessor Entity”) and another entity shall become the General Partner Entity
(the “Successor Entity”), the Conversion Factor shall be adjusted by multiplying
the Conversion Factor by a fraction, the numerator of which is the Value of one
Share of the Predecessor Entity, determined as of the date when the Successor
Entity becomes the General Partner Entity, and the denominator of which is the
Value of one Share of the Successor Entity, determined as of that same date.
(For purposes of the second proviso in the preceding sentence, if any
shareholders of the Predecessor Entity will receive consideration in connection
with the transaction in which the Successor Entity becomes the General Partner
Entity, the numerator in the fraction described above for determining the
adjustment to the Conversion Factor (that is, the Value of one Share of the
Predecessor Entity) shall be the sum of the greatest amount of cash and the fair
market value (as determined in good faith by the General Partner) of any
securities and other consideration that the holder of one Share in the
Predecessor Entity could have received in such transaction (determined without
regard to any provisions governing fractional shares).)  Any adjustment to the
Conversion Factor shall become effective immediately after the effective date of
the event retroactive to the record date, if any, for the event giving rise
thereto, it being intended that (x) adjustments to the Conversion Factor are to
be made to avoid unintended dilution or anti-dilution as a result of
transactions in which Shares are issued, redeemed or exchanged without a
corresponding issuance, redemption or exchange of Partnership Units and (y) if a
Specified Redemption Date shall fall between the record date and the effective
date of any event of the type described above, that the Conversion Factor
applicable to such redemption shall be adjusted to take into account such event.

 

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

 

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

 

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

 

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

 

“Declaration of Trust” means the Declaration of Trust of the General Partner
filed with the Maryland State Department of Assessments and Taxation, as
amended, supplemented, or restated from time to time.

 

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

 

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

 

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

 

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

 

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

 

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“Effective Date” means the date of the closing of the General Partner’s initial
public offering.

 

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

 

“Equity Incentive Plan” means any equity incentive or compensation plan
hereafter adopted by the Partnership or the General Partner, including, without
limitation, the RLJ Lodging Trust 2011 Equity Incentive Plan.

 

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

 

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

 

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

 

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

 

“Funding Debt” means any Debt incurred for the purpose of providing funds to the
Partnership by or on behalf of the General Partner, the General Partner Entity,
or any wholly owned subsidiary of either the General Partner or the General
Partner Entity.

 

“General Partner” means RLJ Lodging Trust, a Maryland real estate investment
trust, or its successor or permitted assignee, as general partner of the
Partnership.

 

“General Partner Entity” means the General Partner; provided, however, that if
(i) the common shares of beneficial interest (or other comparable equity
interests) of the General Partner are at any time not Publicly Traded and (ii)
the common shares of beneficial interest (or other comparable equity interests)
of an entity that owns, directly or indirectly, fifty percent (50%) or more of
the common shares of beneficial interest (or other comparable equity interests)
of the General Partner are Publicly Traded, the term “General Partner Entity”
shall refer to such entity whose common shares of beneficial interest (or other
comparable equity securities) are Publicly Traded. If both requirements set
forth in clauses (i) and (ii) above are not satisfied, then the term “General
Partner Entity” shall mean the General Partner.

 

“General Partner Interest” means a Partnership Interest held by the General
Partner that is not designated a Limited Partner Interest. A General Partner
Interest may be expressed as a number of Partnership Units.

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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“Nonrecourse Built-in Gain” means, with respect to any Contributed Properties or
Adjusted Properties that are subject to a mortgage or negative pledge securing a
Nonrecourse Liability, the amount of any taxable gain that would be allocated to
the Partners pursuant to Section 2.B of Exhibit C if such properties were
disposed of in a taxable transaction in full satisfaction of such liabilities
and for no other consideration.

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

“Recapture Income” means any gain recognized by the Partnership (computed
without regard to any adjustment pursuant to Section 754 of the Code) upon the
disposition of any property or asset of the Partnership, which gain is
characterized either as ordinary income or as “unrecaptured Section 1250 gain”
(as defined in Section 1(h)(6) of the Code) because it represents the recapture
of depreciation deductions previously taken with respect to such property or
asset.

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

“Share” means a common share of beneficial interest (or other comparable equity
interest) of the General Partner Entity.  Shares may be issued in one or more
classes or series in accordance with the terms of the Declaration of Trust (or,
if the General Partner is not the General Partner Entity, the organizational
documents of the General Partner Entity). Shares issued in lieu of the Cash
Amount by the Partnership or General Partner may be either registered or
unregistered Shares at the option of the General Partner or Partnership. If
there is more than one class or series of Shares, the term “Shares” shall, as
the context requires, be deemed to refer to the class or series of Shares that
corresponds to the class or series of Partnership Interests for which the
reference to Shares is made.  When used with reference to Class A Units, the
term “Shares” refers to common shares of beneficial interest (or other
comparable equity interest) of the General Partner Entity.

 

“Share Option Plan” means any equity incentive plan of the General Partner, the
General Partner Entity, the Partnership and/or any Affiliate of the Partnership.

 

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

 

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would be entitled to receive unless the Partnership issues corresponding rights
to holders of Partnership Units.

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

“Value” means, with respect to one Share of a class of outstanding Shares of the
General Partner Entity that are Publicly Traded, the average of the daily market
price for the ten consecutive trading days immediately preceding the date with
respect to which value must be determined. The market price for each such
trading day shall be the closing price, regular way, on such day, or if no such
sale takes place on such day, the average of the closing bid and asked prices on
such day. If the outstanding Shares of the General Partner Entity are Publicly
Traded

 

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and the Shares Amount includes, in addition to the Shares, rights or interests
that a holder of Shares has received or would be entitled to receive, then the
Value of such rights shall be determined by the General Partner acting in good
faith on the basis of such quotations and other information as it considers, in
its reasonable judgment, appropriate. If the Shares of the General Partner
Entity are not Publicly Traded, the Value of the Shares Amount per Partnership
Unit tendered for redemption (which will be the Cash Amount per Partnership Unit
offered for redemption payable pursuant to Section 8.6.A) means the amount that
a holder of one Partnership Unit would receive if each of the assets of the
Partnership were to be sold for its fair market value on the Specified
Redemption Date, the Partnership were to pay all of its outstanding liabilities,
and the remaining proceeds were to be distributed to the Partners in accordance
with the terms of this Agreement. Such Value shall be determined by the General
Partner, acting in good faith and based upon a commercially reasonable estimate
of the amount that would be realized by the Partnership if each asset of the
Partnership (and each asset of each partnership, limited liability company,
trust, joint venture or other entity in which the Partnership owns a direct or
indirect interest) were sold to an unrelated purchaser in an arms’ length
transaction where neither the purchaser nor the seller were under economic
compulsion to enter into the transaction (without regard to any discount in
value as a result of the Partnership’s minority interest in any property or any
illiquidity of the Partnership’s interest in any property).

 

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

 

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

 

ARTICLE II

ORGANIZATIONAL MATTERS

 

Section 2.1                                   Organization

 

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

 

B.                                     Qualification of Partnership.  The
Partners (i) agree that if the laws of any jurisdiction in which the Partnership
transacts business so require, the appropriate officers or

 

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

 

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

 

Section 2.2                                   Name

 

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

 

Section 2.3                                   Registered Office And Agent;
Principal Office

 

The address of the registered office of the Partnership in the State of Delaware
shall be located at 160 Greentree Drive, Suite 101, Dover, DE 19904 and the
registered agent for service of process on the Partnership in the State of
Delaware at such registered office shall be National Registered Agents, Inc. The
principal office of the Partnership shall be 3 Bethesda Metro Center, Suite
1000, Bethesda, Maryland 20814, or such other place as the General Partner may
from time to time designate by notice to the Limited Partners. The Partnership
may maintain offices at such other place or places within or outside the State
of Delaware as the General Partner deems advisable.

 

Section 2.4                                   Term

 

The term of the Partnership commenced on January 31, 2011, and shall continue
until dissolved pursuant to the provisions of Article XIII or as otherwise
provided by law.

 

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ARTICLE III

PURPOSE

 

Section 3.1                                   Purpose And Business

 

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

 

Section 3.2                                   Powers

 

The Partnership is empowered to do any and all acts and things necessary,
appropriate, proper, advisable, incidental to or convenient for the furtherance
and accomplishment of the purposes and business described herein and for the
protection and benefit of the Partnership, including, without limitation, full
power and authority, directly or through its ownership interest in other
entities, to enter into, perform and carry out contracts of any kind, borrow
money and issue evidences of indebtedness, whether or not secured by mortgage,
deed of trust, pledge or other lien, acquire, own, manage, improve and develop
real property, and lease, sell, transfer and dispose of real property; provided,
however, that the Partnership shall not take, or shall refrain from taking, any
action which, in the judgment of the General Partner, in its sole and absolute
discretion, (i) could adversely affect the ability of the General Partner Entity
to continue to qualify as a REIT, (ii) could subject the General Partner Entity
to any taxes under Section 857 or Section 4981 of the Code, or (iii) could
violate any law or regulation of any governmental body or agency having
jurisdiction over either the General Partner or the General Partner Entity or
its securities, unless such action (or inaction) shall have been specifically
consented to by the General Partner in writing.

 

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ARTICLE IV

CAPITAL CONTRIBUTIONS AND ISSUANCES OF PARTNERSHIP INTERESTS

 

Section 4.1                                   Capital Contributions Of The
Partners

 

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

 

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

 

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

 

Section 4.2                                   Issuances Of Partnership Interests

 

A.                                   General. The General Partner is hereby
authorized to cause the Partnership from time to time to issue to Partners
(including the General Partner and its Affiliates) or other Persons (including,
without limitation, in connection with the contribution of property to the
Partnership or any of its Subsidiaries) Partnership Units or other Partnership
Interests in one or more classes, or in one or more series of any of such
classes, with such designations, preferences and relative, participating,
optional or other special rights, powers and duties, including rights, powers
and duties senior to one or more other classes of Partnership Interests, all as
shall be determined, subject to applicable Delaware law, by the General Partner
in its sole and absolute discretion, including, without limitation, (i) the
allocations of items of Partnership income, gain, loss, deduction and credit to
each such class or series of Partnership Interests, (ii) the right of each such
class or series of Partnership Interests to share in Partnership distributions,
(iii) the

 

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rights of each such class or series of Partnership Interests upon dissolution
and liquidation of the Partnership, (iv) the rights, if any, of each such class
to vote on matters that require the vote or Consent of the Limited Partners, and
(v) the consideration, if any, to be received by the Partnership; provided,
however, that no such Partnership Units or other Partnership Interests shall be
issued to the General Partner unless (a) the Partnership Interests are issued in
connection with the grant, award or issuance of Shares or other equity interests
in the General Partner Entity (including a transaction described in Section
7.4.F) having designations, preferences and other rights such that the economic
interests attributable to such Shares or other equity interests are
substantially similar to the designations, preferences and other rights (except
voting rights) of the Partnership Interests issued to the General Partner in
accordance with this Section 4.2.A, and the General Partner contributes to the
Partnership the proceeds from the issuance of Share or equity received by the
General Partner as required pursuant to Section 7.5.D, (b) the General Partner
makes an additional Capital Contribution to the Partnership, or (c) the
additional Partnership Interests are issued to all Partners holding Partnership
Interests in the same class in proportion to their respective Percentage
Interests in such class.  If the Partnership issues Partnership Interests
pursuant to this Section 4.2.A, the General Partner shall make such revisions to
this Agreement (including but not limited to the revisions described in Section
5.4, Section 6.2 and Section 8.6) as it deems necessary to reflect the issuance
of such Partnership Interests. The designation of any newly issued class or
series of Partnership Interests may provide a formula for treating such
Partnership Interests solely for purposes of voting on or consenting to any
matter that requires the vote or Consent of the Limited Partners as set forth in
one or more of Sections 7.1, 7.5.A, 7.11, 13.1(i), 13.1(vi), 14.1.A, 14.1.C,
14.2.A, and 14.2.B of this Agreement as the equivalent of a specified number
(including any fraction thereof) of Class A Units.  Nothing in this Agreement
shall prohibit the General Partner from issuing Partnership Units for less than
fair market value if the General Partner concludes in good faith that such
issuance is in the best interests of the Partnership.

 

B.                                     Classes of Partnership Units. On the
Effective Date, the Partnership shall have three classes of Partnership Units,
entitled “Class A Units,” “Class B Units,” and “LTIP Units,” and such additional
classes of Partnership Units as may be created by the General Partner pursuant
to Sections 4.2.A and 4.2.B.  Class A Units, Class B Units, or a class of
Partnership Interests created pursuant to Sections 4.2.A or 4.2.B, at the
election of the General Partner, in its sole and absolute discretion, may be
issued to newly admitted Partners in exchange for the contribution by such
Partners of cash, real estate partnership interests, stock, notes or other
assets or consideration; provided, however, that any Partnership Unit that is
not specifically designated by the General Partner as being of a particular
class shall be deemed to be a Class A Unit. Each Class B Unit shall be converted
automatically into a corresponding series of Class A Unit on the day immediately
following the Partnership Record Date for the Distribution Period in which such
Class B Unit was issued, without the requirement for any action by the General
Partner, the Partnership or the Partner holding the Class B Unit.  The issuance
and terms of any LTIP Units shall be in accordance with Section 4.6.

 

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Section 4.3                                   No Preemptive Rights

 

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

 

Section 4.4                                   Other Contribution Provisions

 

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

 

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

 

Section 4.5                                   No Interest On Capital

 

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

 

Section 4.6                                   LTIP Units

 

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

 

21

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

 

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

 

B.                                     Priority. Subject to the provisions of
this Section 4.6 and the special provisions of Sections 4.7 and 5.1.E, the LTIP
Units shall rank pari passu with the Class A Units and Class B

 

22

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Units as to the payment of regular and special periodic or other distributions
and distribution of assets upon liquidation, dissolution or winding up.  As to
the payment of distributions and as to distribution of assets upon liquidation,
dissolution or winding up, any class or series of Partnership Units which by its
terms specifies that it shall rank junior to, on a parity with, or senior to the
Class A Units shall also rank junior to, or pari passu with, or senior to, as
the case may be, the LTIP Units. Subject to the terms of any Vesting Agreement,
an LTIP Unitholder shall be entitled to transfer his or her LTIP Units to the
same extent, and subject to the same restrictions as holders of Class A Units
are entitled to transfer their Class A Units pursuant to Article XI.

 

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

 

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

 

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

 

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

 

(iv) Redemption.  The Redemption Right provided to the holders of Class A Units
under Section 8.6 hereof shall not apply with respect to LTIP Units unless and
until

 

23

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they are converted to Class A Units as provided in clause (v) below and Section
4.7 hereof.

 

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

 

D.                                    Voting.  LTIP Unitholders shall (a) have
the same voting rights as the Limited Partners, with the LTIP Units voting as a
single class with the Class A Units and having one vote per LTIP Unit; and (b)
have the additional voting rights that are expressly set forth below. So long as
any LTIP Units remain outstanding, the Partnership shall not, without the
affirmative vote of the holders of a majority of the LTIP Units outstanding at
the time, given in person or by proxy, either in writing or at a meeting (voting
separately as a class), amend, alter or repeal, whether by merger, consolidation
or otherwise, the provisions of this Agreement applicable to LTIP Units so as to
materially and adversely affect any right, privilege or voting power of the LTIP
Units or the LTIP Unitholders as such, unless such amendment, alteration, or
repeal affects equally, ratably and proportionately the rights, privileges and
voting powers of all of Class A Units (including the Class A Units held by the
General Partner); but subject, in any event, to the following provisions:

 

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

 

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

 

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

 

Section 4.7                                   Conversion of LTIP Units.

 

A.                                   Conversion Right.  An LTIP Unitholder shall
have the right (the “Conversion Right”), at his or her option, at any time to
convert all or a portion of his or her Vested LTIP Units into Class A Units;
provided, however, that a holder may not exercise the Conversion Right for less
than one thousand (1,000) Vested LTIP Units or, if such holder holds less than
one

 

24

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

 

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

 

B.                                     Exercise by an LTIP Unitholder.  A holder
of Vested LTIP Units may convert such LTIP Units into an equal number of fully
paid and non-assessable Class A Units, giving effect to all adjustments (if any)
made pursuant to Section 4.6 hereof.  Notwithstanding the foregoing, in no event
may a holder of Vested LTIP Units convert a number of Vested LTIP Units that
exceeds (x) the Economic Capital Account Balance of such Limited Partner, to the
extent attributable to its ownership of LTIP Units, divided by (y) the Class A
Unit Economic Balance, in each case as determined as of the effective date of
conversion (the “Capital Account Limitation”). In order to exercise his or her
Conversion Right, an LTIP Unitholder shall deliver a notice (a “Conversion
Notice”) in the form attached as Exhibit F to this Agreement to the Partnership
(with a copy to the General Partner) not less than ten nor more than 60 days
prior to a date (the “Conversion Date”) specified in such Conversion Notice;
provided, however, that if the General Partner has not given to the LTIP
Unitholders notice of a proposed or upcoming Class A Unit Transaction (as
defined in Section 4.7.F hereof) at least 30 days prior to the effective date of
such Class A Unit Transaction, then LTIP Unitholders shall have the right to
deliver a Conversion Notice until the earlier of (x) the tenth day after such
notice from the General Partner of a Class A Unit Transaction or (y) the third
business day immediately preceding the effective date of such Class A Unit
Transaction.  A Conversion Notice shall be provided in the manner provided in
Section 15.1 hereof.  Each LTIP Unitholder covenants and agrees with the
Partnership that all Vested LTIP Units to be converted pursuant to this Section
4.7.B shall be free and clear of all liens and encumbrances.  Notwithstanding
anything herein to the contrary, a holder of LTIP Units may deliver a Notice of
Redemption pursuant to Section 8.6 hereof relating to those Class A Units that
will be issued to such holder upon conversion of such LTIP Units into Class A
Units in advance of the Conversion Date; provided, however, that the redemption
of such Class A Units by the Partnership shall in no event take place until
after the Conversion Date.  For clarity, it is noted that the objective of this
paragraph is to put an LTIP Unitholder in a position where, if he or she so
wishes, the Class A Units into which his or her Vested LTIP Units will be
converted can be redeemed by the Partnership simultaneously with such
conversion, with the further consequence that, if the General Partner elects to
assume and perform the Partnership’s redemption obligation with respect to such
Class A Units under Section 8.6 hereof by delivering to such holder Shares
rather than cash, then such holder can have such Shares issued to him or her
simultaneously with the conversion of his or

 

25

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her Vested LTIP Units into Class A Units.  The General Partner and LTIP
Unitholder shall reasonably cooperate with each other to coordinate the timing
of the events described in the foregoing sentence.

 

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

 

D.                                    Completion of Conversion.  A conversion of
Vested LTIP Units for which the holder thereof has given a Conversion Notice or
the Partnership has given a Forced Conversion Notice shall occur automatically
after the close of business on the applicable Conversion Date without any action
on the part of such LTIP Unitholder, as of which time such LTIP Unitholder shall
be credited on the books and records of the Partnership with the issuance as of
the opening of business on the next day of the number of Class A Units issuable
upon such conversion.  After the conversion of LTIP Units as aforesaid, the
Partnership shall deliver to such LTIP Unitholder, upon his or her written
request, a certificate of the General Partner certifying the number of Class A
Units and remaining LTIP Units, if any, held by such person immediately after
such conversion.  The Assignee of any Limited Partner pursuant to Article XI
hereof may exercise the rights of such Limited Partner pursuant to this Section
4.7 and such Limited Partner shall be bound by the exercise of such rights by
the Assignee.

 

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

 

F.                                      Class A Unit Transactions.  If the
Partnership or the General Partner Entity shall be a party to any Class A Unit
Transaction, as defined below (including without limitation a merger,
consolidation, unit exchange, self tender offer for all or substantially all
Class A Units or other business combination or reorganization, or sale of all or
substantially all of the Partnership’s assets, but excluding any Class A Unit
Transaction which constitutes an Adjustment Event) in each case as a result of
which Class A Units shall be exchanged for or converted into the right, or the
holders of such Class A Units shall otherwise be entitled, to receive cash,
securities or other property or any combination thereof (each of the foregoing
being

 

26

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referred to herein as a “Class A Unit Transaction”), then the General Partner
shall, immediately prior to the Class A Unit Transaction, exercise its right to
cause a Forced Conversion with respect to the maximum number of LTIP Units then
eligible for conversion, taking into account any allocations that occur in
connection with the Class A Unit Transaction or that would occur in connection
with the Class A Unit Transaction if the assets of the Partnership were sold at
the Class A Unit Transaction price or, if applicable, at a value determined by
the General Partner in good faith using the value attributed to the Partnership
Units in the context of the Class A Unit Transaction (in which case the
Conversion Date shall be the effective date of the Class A Unit Transaction). 
In anticipation of such Forced Conversion and the consummation of the Class A
Unit Transaction, the Partnership shall use commercially reasonable efforts to
cause each LTIP Unitholder to be afforded the right to receive in connection
with such Class A Unit Transaction in consideration for the Class A Units into
which his or her LTIP Units will be converted the same kind and amount of cash,
securities and other property (or any combination thereof) receivable upon the
consummation of such Class A Unit Transaction by a holder of the same number of
Class A Units, assuming such holder of Class A Units is not a Person with which
the Partnership consolidated or into which the Partnership merged or which
merged into the Partnership or to which such sale or transfer was made, as the
case may be (a “Constituent Person”), or an affiliate of a Constituent Person. 
In the event that holders of Class A Units have the opportunity to elect the
form or type of consideration to be received upon consummation of the Class A
Unit Transaction, prior to such Class A Unit Transaction the General Partner
shall give prompt written notice to each LTIP Unitholder of such election, and
shall use commercially reasonable efforts to afford the LTIP Unitholders the
right to elect, by written notice to the General Partner, the form or type of
consideration to be received upon conversion of each LTIP Unit held by such
holder into Class A Units in connection with such Class A Unit Transaction.  If
an LTIP Unitholder fails to make such an election, such holder (and any of its
transferees) shall receive upon conversion of each LTIP Unit held him or her (or
by any of his or her transferees) the same kind and amount of consideration that
a holder of a Class A Unit would receive if such Class A Unit holder failed to
make such an election.  Subject to the rights of the Partnership and the General
Partner under any Vesting Agreement and any Equity Incentive Plan, the
Partnership shall use commercially reasonable effort to cause the terms of any
Class A Unit Transaction to be consistent with the provisions of this Section
4.7.F and to enter into an agreement with the successor or purchasing entity, as
the case may be, for the benefit of any LTIP Unitholders whose LTIP Units will
not be converted into Class A Units in connection with the Class A Unit
Transaction that will (i) contain provisions enabling the holders of LTIP Units
that remain outstanding after such Class A Unit Transaction to convert their
LTIP Units into securities as comparable as reasonably possible under the
circumstances to the Class A Units and (ii) preserve as far as reasonably
possible under the circumstances the distribution, special allocation,
conversion, and other rights set forth in this Agreement for the benefit of the
LTIP Unitholders.

 

27

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ARTICLE V

DISTRIBUTIONS

 

Section 5.1            Requirement And Characterization Of Distributions

 

A.            General. The General Partner shall distribute at least quarterly
an amount equal to one hundred percent (100%) of the Available Cash of the
Partnership with respect to such quarter or shorter period to the Partners in
accordance with the terms established for the class or classes of Partnership
Interests held by such Partners who are Partners on the respective Partnership
Record Date with respect to such quarter or shorter period as provided in
Sections 5.1.B, 5.1.C and 5.1.D and in accordance with the respective terms
established for each class of Partnership Interest. Notwithstanding anything to
the contrary contained herein, in no event may a Partner receive a distribution
of Available Cash with respect to a Partnership Unit for a quarter or shorter
period if such Partner is entitled to receive a distribution with respect to a
Share for which such Partnership Unit has been redeemed or exchanged. Unless
otherwise expressly provided for herein, or in the terms established for a new
class or series of Partnership Interests created in accordance with Article IV
hereof, no Partnership Interest shall be entitled to a distribution in
preference to any other Partnership Interest. The General Partner shall make
such reasonable efforts, as determined by it in its sole and absolute discretion
and consistent with the qualification of the General Partner Entity as a REIT,
to distribute Available Cash (a) to Limited Partners so as to preclude any such
distribution or portion thereof from being treated as part of a sale of property
to the Partnership by a Limited Partner under Section 707 of the Code or the
Regulations thereunder; provided, however, that none of the General Partner, the
General Partner Entity, and the Partnership shall have liability to a Limited
Partner under any circumstances as a result of any distribution to a Limited
Partner being so treated, and (b) to the General Partner in an amount sufficient
to enable the General Partner Entity to make distributions to its shareholders
that will enable the General Partner Entity to (1) satisfy the requirements for
qualification as a REIT under the Code and the Regulations (the “REIT
Requirements”), and (2) avoid any federal income or excise tax liability.

 

B.            Method.  (i) Each holder of Partnership Interests that is entitled
to any preference in distribution shall be entitled to a distribution in
accordance with the rights of any such class of Partnership Interests (and,
within such class, pro rata in proportion to the respective Percentage Interests
on such Partnership Record Date); and

 

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

 

28

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

 

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

 

[g125361kd07i001.gif]

 

[g125361kd07i002.gif](2)       Class B shall receive that portion of the
Available Cash (the “Class B Share”) determined by multiplying the amount of
Available Cash by the following fraction:

 

[g125361kd07i003.gif]

 

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

 

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

 

D.            Distributions When Class B Units Have Been Issued on Different
Dates. If Class B Units which have been issued on different dates are
outstanding on the Partnership

 

29

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

 

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

 

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

 

[g125361kd07i004.gif]

 

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

 

[g125361kd07i005.gif]

 

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

 

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

 

Section 5.2            Amounts Withheld

 

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

 

30

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Section 5.3            Distributions Upon Liquidation

 

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

 

Section 5.4            Revisions To Reflect Issuance Of Partnership Interests

 

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

 

ARTICLE VI

ALLOCATIONS

 

Section 6.1            Allocations For Capital Account Purposes

 

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

 

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

 

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

 

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

 

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

 

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

 

31

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(5)           fifth, to the holders of any Partnership Interests that are
entitled to any preference in distribution in accordance with the rights of any
other class of Partnership Interests until each such Partnership Interest has
been allocated, on a cumulative basis pursuant to this clause (5), Net Income
equal to the amount of distributions payable that are attributable to the
preference of such class of Partnership Interests whether or not paid (and,
within such class, pro rata in proportion to the respective Percentage Interests
as of the last day of the period for which such allocation is being made); and

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

(6)           thereafter, to the General Partner.

 

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

 

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

 

E.             Special Allocations Regarding LTIP Units. Notwithstanding the
provisions of Section 6.1.A, Liquidating Gains shall first be allocated to the
LTIP Unitholders until their Economic Capital Account Balances, to the extent
attributable to their ownership of LTIP Units, are equal to (i) the Class A Unit
Economic Balance, multiplied by (ii) the number of their LTIP Units. For this
purpose, “Liquidating Gains” means net gains that are or would be realized in

 

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

 

Section 6.2            Revisions To Allocations To Reflect Issuance Of
Partnership Interests

 

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

 

ARTICLE VII

MANAGEMENT AND OPERATIONS OF BUSINESS

 

Section 7.1            Management

 

A.            Powers of General Partner. Except as otherwise expressly provided
in this Agreement, all management powers over the business and affairs of the
Partnership are and shall be exclusively vested in the General Partner, and no
Limited Partner shall have any right to participate in or exercise control or
management power over the business and affairs of the Partnership.  The General
Partner may not be removed by the Limited Partners with or without cause (unless
the Shares of the General Partner Entity corresponding to Partnership Units are
not Publicly Traded, in which case the General Partner may be removed with or
without cause by the

 

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Consent of the Partners holding Partnership Interests representing more than
fifty percent (50%) of the Percentage Interest of the Class A Units).  In
addition to the powers now or hereafter granted a general partner of a limited
partnership under applicable law or which are granted to the General Partner
under any other provision of this Agreement, the General Partner, subject to
Section 7.11, shall have full power and authority to do all things deemed
necessary or desirable by it to conduct the business of the Partnership, to
exercise all powers set forth in Section 3.2 and to effectuate the purposes set
forth in Section 3.1, including, without limitation:

 

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

 

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

 

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

 

(4)           the use of the assets of the Partnership (including, without
limitation, cash on hand) for any purpose consistent with the terms of this
Agreement and on any terms it sees fit, including, without limitation, the
financing of the conduct of the operations of the General Partner, the
Partnership or any of the Partnership’s Subsidiaries, the lending of funds to
other Persons (including, without limitation, the General Partner and its
Subsidiaries and the Partnership’s Subsidiaries) and the repayment of
obligations of the Partnership and its Subsidiaries and any other

 

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Person in which the Partnership has an equity investment and the making of
capital contributions to its Subsidiaries;

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

(13)         the formation of, or acquisition of an interest (including
non-voting interests in entities controlled by Affiliates of the Partnership or
third parties) in, and the contribution of property to, any further limited or
general partnerships, joint ventures, limited liability companies or other
relationships that it deems desirable (including, without limitation, the
acquisition of interests in, and the contributions of funds or property to, or
making of loans to, its Subsidiaries and any other

 

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Person in which it has an equity investment from time to time, or the incurrence
of indebtedness on behalf of such Persons or the guarantee of the obligations of
such Persons); provided, however, that as long as the General Partner Entity has
determined to continue to qualify as a REIT, the Partnership may not engage in
any such formation, acquisition or contribution that would cause the General
Partner Entity to fail to qualify as a REIT;

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

(24)         the registration of any class of securities of the Partnership
under the Securities Act of 1933, as amended, or the Securities Exchange Act of
1934, as amended, and the listing of any debt securities of the Partnership on
any exchange.

 

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

 

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

 

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

 

Section 7.2                                   Certificate of Limited Partnership

 

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

 

Section 7.3                                   Title to Partnership Assets

 

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

 

Section 7.4                                   Reimbursement of the General
Partner

 

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

 

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Partnership or otherwise be compensated for its services as the general partner
of the Partnership.

 

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

 

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

 

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

 

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

 

E.             Reimbursement not a Distribution. Except as set forth in the
succeeding sentence, if and to the extent any reimbursement made pursuant to
this Section 7.4 is determined for U.S.

 

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federal income tax purposes not to constitute a payment of expenses of the
Partnership, the amount so determined shall constitute a guaranteed payment with
respect to capital within the meaning of Section 707(c) of the Code, shall be
treated consistently therewith by the Partnership and all Partners and shall not
be treated as a distribution for purposes of computing the Partners’ Capital
Accounts.  Amounts deemed paid by the Partnership to the General Partner in
connection with redemption of Partnership Units pursuant to clause (ii) of
subparagraph (D) above shall be treated as a distribution for purposes of
computing the Partner’s Capital Accounts.

 

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

 

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Shares of the General Partner Entity that the General Partner Entity would have
issued to the Parent Entity or the owners of the Parent Entity in such
transaction if the entire consideration therefor were to have been paid in
Shares by a fraction, the numerator of which is one and the denominator of which
is the Conversion Factor.

 

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

 

A.            General. Without the Consent of the Outside Limited Partners, the
General Partner shall not, directly or indirectly, enter into or conduct any
business other than in connection with the ownership, acquisition and
disposition of Partnership Interests as General Partner or Limited Partner and
the management of the business of the Partnership and such activities as are
incidental thereto. Without the Consent of the Outside Limited Partners, the
assets of the General Partner shall be limited to Partnership Interests and
permitted debt obligations of the Partnership (as contemplated by
Section 7.5.F); provided, however, that the General Partner shall be permitted
to hold such bank accounts or similar instruments or accounts in its name as it
deems necessary to carry out its responsibilities and purposes as contemplated
under this Agreement and its organizational documents (provided that accounts
held on behalf of the Partnership to permit the General Partner to carry out its
responsibilities under this Agreement shall be considered to belong to the
Partnership and the interest earned thereon shall, subject to Section 7.4.B, be
applied for the benefit of the Partnership); and, provided further that, the
General Partner shall be permitted to acquire Qualified Assets.

 

B.            Repurchase of Shares and Other Securities.  If the General Partner
Entity exercises its rights under the Declaration of Trust (or, if the General
Partner is not the General Partner Entity, the organizational documents of the
General Partner Entity) to purchase Shares or otherwise elects to purchase from
the holders thereof Shares, other equity securities of the General Partner
Entity, New Securities or Convertible Funding Debt, then the General Partner
Entity shall cause the Partnership to purchase from the General Partner (i) in
the case of a purchase of Shares, that number of Partnership Units of the
appropriate class equal to the product obtained by multiplying the number of
Shares purchased by the General Partner Entity times a fraction, the numerator
of which is one and the denominator of which is the Conversion Factor, or (ii)
in the case of the purchase of any other securities on the same terms and for
the same aggregate price that the General Partner Entity purchased such
securities.

 

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

 

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

 

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

 

F.             Funding Debt. The General Partner or the General Partner Entity
or any wholly owned Subsidiary of either of them may incur a Funding Debt from a
financial institution or other lender, including, without limitation, a Funding
Debt that is convertible into Shares or otherwise constitutes a class of New
Securities (“Convertible Funding Debt”), subject to the

 

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condition that the General Partner, the General Partner Entity or such
Subsidiary, as the case may be, lend to the Partnership the net proceeds of such
Funding Debt; provided, however, that Convertible Funding Debt shall be issued
in accordance with the provisions of Section 7.5.D above; and, provided further
that the General Partner, the General Partner Entity or such Subsidiary shall
not be obligated to lend the net proceeds of any Funding Debt to the Partnership
in a manner that would be inconsistent with the General Partner’s or General
Partner Entity’s ability to remain qualified as a REIT. If the General Partner,
General Partner Entity or such Subsidiary enters into any Funding Debt, the loan
to the Partnership shall be on comparable terms and conditions, including
interest rate, repayment schedule, costs and expenses and other financial terms,
as are applicable with respect to or incurred in connection with such Funding
Debt.

 

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

 

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

 

Section 7.6                                   Transactions With Affiliates

 

A.            Transactions with Certain Affiliates. Except as expressly
permitted by this Agreement with respect to any non-arms’ length transaction
with an Affiliate, the Partnership shall not, directly or indirectly, sell,
transfer or convey any property to, or purchase any property from, or borrow
funds from, or lend funds to, any Partner or any Affiliate of the Partnership
that is not also a Subsidiary of the Partnership, except pursuant to
transactions that are determined in good faith by the General Partner to be on
terms that are fair and reasonable and no less favorable to the Partnership than
would be obtained from an unaffiliated third party.

 

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

 

C.            Benefit Plans Sponsored by the Partnership. The General Partner in
its sole and absolute discretion and without the approval of the Limited
Partners, may propose and adopt on

 

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behalf of the Partnership employee benefit plans funded by the Partnership for
the benefit of employees of the General Partner, the Partnership, Subsidiaries
of the Partnership or any Affiliate of any of them.

 

Section 7.7                                   Indemnification

 

A.            General. The Partnership shall indemnify each Indemnitee to the
fullest extent provided by the Act from and against any and all losses, claims,
damages, liabilities, joint or several, expenses (including, without limitation,
attorneys fees and other legal fees and expenses), judgments, fines, settlements
and other amounts, arising from or in connection with any and all claims,
demands, actions, suits or proceedings, whether civil, criminal, administrative
or investigative, incurred by the Indemnitee and relating to the Partnership or
the General Partner or the General Partner Entity or the operation of, or the
ownership of property by, the Indemnitee, Partnership or the General Partner or
the General Partner Entity as set forth in this Agreement in which any such
Indemnitee may be involved, or is threatened to be involved, as a party or
otherwise, unless it is established by a final determination of a court of
competent jurisdiction that: (i) the act or omission of the Indemnitee was
material to the matter giving rise to the proceeding and either was committed in
bad faith or was the result of active and deliberate dishonesty, (ii) the
Indemnitee actually received an improper personal benefit in money, property or
services or (iii) in the case of any criminal proceeding, the Indemnitee had
reasonable cause to believe that the act or omission was unlawful. Without
limitation, the foregoing indemnity shall extend to any liability of any
Indemnitee, pursuant to a loan guarantee, contractual obligation for any
indebtedness or other obligation or otherwise, for any indebtedness of the
Partnership or any Subsidiary of the Partnership (including, without limitation,
any indebtedness which the Partnership or any Subsidiary of the Partnership has
assumed or taken subject to), and the General Partner is hereby authorized and
empowered, on behalf of the Partnership, to enter into one or more indemnity
agreements consistent with the provisions of this Section 7.7 in favor of any
Indemnitee having or potentially having liability for any such indebtedness. The
termination of any proceeding by judgment, order or settlement does not create a
presumption that the Indemnitee did not meet the requisite standard of conduct
set forth in this Section 7.7.A. The termination of any proceeding by conviction
or upon a plea of nolo contendere or its equivalent, or an entry of an order of
probation prior to judgment, creates a rebuttable presumption that the
Indemnitee acted in a manner contrary to that specified in this Section 7.7.A
with respect to the subject matter of such proceeding. Any indemnification
pursuant to this Section 7.7 shall be made only out of the assets of the
Partnership, and any insurance proceeds from the liability policy covering the
General Partner and any Indemnitee, and neither the General Partner nor any
Limited Partner shall have any obligation to contribute to the capital of the
Partnership or otherwise provide funds to enable the Partnership to fund its
obligations under this Section 7.7.

 

B.            Reimbursement of Expenses. Reasonable expenses expected to be
incurred by an Indemnitee shall be paid or reimbursed by the Partnership in
advance of the final disposition of any and all claims, demands, actions, suits
or proceedings, civil, criminal, administrative or

 

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investigative made or threatened against an Indemnitee upon receipt by the
Partnership of (i) a written affirmation by the Indemnitee of the Indemnitee’s
good faith belief that the standard of conduct necessary for indemnification by
the Partnership as authorized in Section 7.7.A has been met and (ii) a written
undertaking by or on behalf of the Indemnitee to repay the amount if it shall
ultimately be determined that the standard of conduct has not been met.

 

C.            No Limitation of Rights. The indemnification provided by this
Section 7.7 shall be in addition to any other rights to which an Indemnitee or
any other Person may be entitled under any agreement, pursuant to any vote of
the Partners, as a matter of law or otherwise, and shall continue as to an
Indemnitee who has ceased to serve in such capacity unless otherwise provided in
a written agreement pursuant to which such Indemnitee is indemnified.

 

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

 

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

 

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

 

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

 

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

 

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

 

Section 7.8                                   Liability of the General Partner

 

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

 

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

 

C.            No Obligation to Consider Separate Interests of Limited Partners.
The Limited Partners expressly acknowledge that the General Partner is acting on
behalf of the Partnership, the Limited Partners, the General Partner’s
shareholders (and, to the extent separate, the shareholders of the General
Partner Entity), and that, except as set forth herein, the General Partner is
under no obligation to consider the separate interests of the Limited Partners
(including, without limitation, the tax consequences to Limited Partners or
Assignees) in deciding whether to cause the Partnership to take (or decline to
take) any actions, and that the General Partner shall not be liable for monetary
or other damages for losses sustained, liabilities incurred or benefits not
derived by Limited Partners in connection with any decisions or actions made or
taken or declined to be made or taken, provided that the General Partner has
acted pursuant to its authority under this Agreement.  Any decisions or actions
not taken by the General Partner in accordance with the terms of this Agreement
shall not constitute a breach of any duty owed to the Partnership or the Limited
Partners by law or equity, fiduciary or otherwise.

 

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

 

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

 

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

 

Section 7.9                                   Other Matters Concerning the
General Partner

 

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

 

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

 

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

 

D.            Actions to Maintain REIT Status or Avoid Taxation of the General
Partner Entity. 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 Entity to qualify as a REIT or (ii) to allow the General Partner Entity
to avoid incurring any liability for taxes under Section 857 or 4981 of the
Code, is expressly authorized under this Agreement and is deemed approved by all
of the Limited Partners.

 

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Section 7.10                            Reliance By Third Parties

 

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

 

Section 7.11                            Restrictions on General Partner’s
Authority

 

The General Partner may not take any action in contravention of an express
prohibition or limitation of this Agreement without the written Consent of (i)
all Partners adversely affected or (ii) such lower percentage of the Partnership
Interests held by Limited Partners as may be specifically provided for under a
provision of this Agreement or the Act.  The preceding sentence shall not apply
to any limitation or prohibition in this Agreement that expressly authorizes the
General Partner to take action (either in its discretion or in specified
circumstances) so long as the General Partner acts within the scope of such
authority.

 

Section 7.12                            Loans by Third Parties

 

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

 

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ARTICLE VIII
RIGHTS AND OBLIGATIONS OF LIMITED PARTNERS

 

Section 8.1                                   Limitation of Liability

 

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

 

Section 8.2                                   Management of Business

 

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

 

Section 8.3                                   Outside Activities of Limited
Partners

 

Subject to Section 7.5 hereof, and subject to any agreements entered into
pursuant to Section 7.6.B hereof and to any other agreements entered into by a
Limited Partner or its Affiliates with the General Partner, the Partnership or a
Subsidiary, any Limited Partner (other than the General Partner) and any
officer, director, employee, agent, trustee, Affiliate or stockholder of any
Limited Partner shall be entitled to and may have business interests and engage
in business activities in addition to those relating to the Partnership,
including business interests and activities in direct or indirect competition
with the Partnership. Neither the Partnership nor any Partners shall have any
rights by virtue of this Agreement in any business ventures of any Limited
Partner or Assignee. None of the Limited Partners (other than the General
Partner) or any other Person shall have any rights by virtue of this Agreement
or the partnership relationship established hereby in any business ventures of
any other Person (other than the General Partner to the extent expressly
provided herein), and no Person (other than the General Partner) shall have any
obligation pursuant to this Agreement to offer any interest in any such business
venture to the Partnership, any Limited Partner or any such other Person, even
if such opportunity is of a character which, if presented to the Partnership,
any Limited Partner or such other Person, could be taken by such Person.

 

Section 8.4                                   Return of Capital

 

Except pursuant to the right of redemption set forth in Section 8.6, no Limited
Partner shall be entitled to the withdrawal or return of its Capital
Contribution, except to the extent of

 

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

 

Section 8.5                                   Rights of Limited Partners
Relating to the Partnership

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

D.            Confidentiality. Notwithstanding any other provision of this
Section 8.5, the General Partner may keep confidential from the Limited
Partners, for such period of time as the General Partner determines in its sole
and absolute discretion, any information that (i) the General Partner reasonably
believes to be in the nature of trade secrets or other information the

 

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

 

Section 8.6                                   Redemption Right

 

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

 

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

 

(iii)          The Assignee of any Limited Partner may exercise the rights of
such Limited Partner pursuant to this Section 8.6, and such Limited Partner
shall be deemed to have assigned such rights to such Assignee and shall be bound
by the exercise of such rights by such Limited Partner’s Assignee. In connection
with any exercise of such rights by such Assignee on

 

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behalf of such Limited Partner, the Cash Amount shall be paid by the Partnership
directly to such Assignee and not to such Limited Partner.

 

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

 

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

 

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

 

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

 

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

 

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

 

E.             Additional Partnership Interests; Modification of Holding Period.
If the Partnership issues Partnership Interests to any Additional Limited
Partner pursuant to Article IV,

 

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

 

ARTICLE IX
BOOKS, RECORDS, ACCOUNTING AND REPORTS

 

Section 9.1                                   Records and Accounting

 

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

 

Section 9.2                                   Fiscal Year

 

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

 

Section 9.3                                   Reports

 

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

 

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

 

ARTICLE X
TAX MATTERS

 

Section 10.1                            Preparation of Tax Returns

 

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

 

Section 10.2                            Tax Elections

 

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

 

B.            Without limiting the foregoing, the Partners, intending to be
legally bound, hereby authorize the General Partner, on behalf of the
Partnership, to make an election (the “LV Safe Harbor Election”) to have the
“liquidation value” safe harbor provided in Proposed Treasury Regulation §
1.83-3(1) and the Proposed Revenue Procedure set forth in Internal Revenue
Service Notice 2005-43, as such safe harbor may be modified when such proposed
guidance is issued in final form or as amended by subsequently issued guidance
(the “LV Safe Harbor”), apply to any interest in the Partnership transferred to
a service provider while the LV Safe Harbor Election remains effective, to the
extent such interest meets the LV Safe Harbor requirements (collectively, such
interests are referred to as “LV Safe Harbor Interests”). The tax matters
partner is authorized and directed to execute and file the LV Safe Harbor
Election on behalf of the Partnership and the Partners. The Partnership and the
Partners (including any person to whom an interest in the Partnership is
transferred in connection with the performance of services) hereby agree to
comply with all requirements of the LV Safe Harbor (including forfeiture
allocations) with respect to all LV Safe Harbor Interests and to prepare and
file all U.S. federal income tax returns reporting the tax consequences of the
issuance and vesting of LV Safe

 

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Harbor Interests consistent with such final LV Safe Harbor guidance. The
Partnership is also authorized to take such actions as are necessary to achieve,
under the LV Safe Harbor, the effect that the election and compliance with all
requirements of the LV Safe Harbor referred to above would be intended to
achieve under Proposed Treasury Regulation § 1.83-3, including amending this
Agreement.

 

Section 10.3                            Tax Matters Partner

 

A.            General. The General Partner shall be the “tax matters partner” of
the Partnership for federal income tax purposes. Pursuant to Section 6223(c)(3)
of the Code, upon receipt of notice from the IRS of the beginning of an
administrative proceeding with respect to the Partnership, the tax matters
partner shall furnish the IRS with the name, address, taxpayer identification
number and profit interest of each of the Limited Partners and any Assignees;
provided, however, that such information is provided to the Partnership by the
Limited Partners.

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

Section 10.4                            Organizational Expenses

 

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

 

Section 10.5                            Withholding

 

Each Limited Partner hereby authorizes the Partnership to withhold from or pay
on behalf of or with respect to such Limited Partner any amount of U.S. federal,
state, local, or foreign taxes that the General Partner determines that the
Partnership is required to withhold or pay with respect to any cash or property
distributable, allocable or otherwise transferred to such Limited Partner
pursuant to this Agreement, including, without limitation, any taxes required to
be withheld or paid by the Partnership pursuant to Section 1441, 1442, 1445, or
1446 of the Code.  Any amount paid on behalf of or with respect to a Limited
Partner shall constitute a loan by the Partnership, to such Limited Partner,
which loan shall be repaid by such Limited Partner within fifteen (15) days
after notice from the General Partner that such payment must be made unless

 

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(i) the Partnership withholds such payment from a distribution which would
otherwise be made to the Limited Partner or (ii) the General Partner determines,
in its sole and absolute discretion, that such payment may be satisfied out of
the available funds of the Partnership which would, but for such payment, be
distributed to the Limited Partner. Any amounts withheld pursuant to the
foregoing clauses (i) or (ii) shall be treated as having been distributed or
otherwise paid to such Limited Partner.  Each Limited Partner hereby
unconditionally and irrevocably grants to the Partnership a security interest in
such Limited Partner’s Partnership Interest to secure such Limited Partner’s
obligation to pay to the Partnership any amounts required to be paid pursuant to
this Section 10.5. If a Limited Partner fails to pay any amounts owed to the
Partnership pursuant to this Section 10.5 when due, the General Partner may, in
its sole and absolute discretion, elect to make the payment to the Partnership
on behalf of such defaulting Limited Partner, and in such event shall be deemed
to have loaned such amount to such defaulting Limited Partner and shall succeed
to all rights and remedies of the Partnership as against such defaulting Limited
Partner (including, without limitation, the right to receive distributions). Any
amounts payable by a Limited Partner hereunder shall bear interest at the base
rate on corporate loans at large United States money center commercial banks, as
published from time to time in The Wall Street Journal, plus four (4) percentage
points (but not higher than the maximum rate that may be charged under law) from
the date such amount is due (i.e., fifteen (15) days after demand) until such
amount is paid in full.  Each Limited Partner shall take such actions as the
Partnership or the General Partner shall request to perfect or enforce the
security interest created hereunder.

 

ARTICLE XI
TRANSFERS AND WITHDRAWALS

 

Section 11.1                            Transfer

 

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

 

B.            General. No Partnership Interest shall be transferred, in whole or
in part, except in accordance with the terms and conditions set forth in this
Article XI. Any transfer or purported

 

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transfer of a Partnership Interest not made in accordance with this Article XI
shall be null and void.

 

Section 11.2                            Transfers of Partnership Interests of
General Partner

 

A.            General.  The General Partner may not transfer any of its
Partnership Interests except in connection with (i) a transaction permitted
under Section 11.2.B, (ii) any merger (including a triangular merger),
consolidation or other combination with or into another Person following the
consummation of which the equity holders of the surviving entity are
substantially identical to the shareholders of the General Partner Entity, or
(iii) as otherwise expressly permitted under this Agreement, nor shall the
General Partner withdraw as General Partner except in connection with a
transaction permitted under Section 11.2.B or any merger, consolidation, or
other combination permitted under clause (ii) of this Section 11.2.A.

 

B.            Termination Transactions. The General Partner Entity shall not
engage in any merger (including, without limitation, a triangular merger),
consolidation or other combination with or into another Person (other than any
transaction permitted by Section 11.2.A), sale of all or substantially all of
its assets or any reclassification, recapitalization or change of outstanding
Shares (other than a change in par value, or from par value to no par value, or
as a result of a subdivision or combination as described in the definition of
“Conversion Factor”) (“Termination Transaction”), unless (i)  following such
merger or other consolidation, substantially all of the assets of the surviving
entity consist of Partnership Units and (ii) in connection with which all
Partners either will receive, or will have the right to receive, for each
Partnership Unit an amount of cash, securities, or other property equal to the
product of the Conversion Factor and the greatest amount of cash, securities or
other property paid to a holder of Shares, if any, corresponding to such Unit in
consideration of one such Share at any time during the period from and after the
date on which the Termination Transaction is consummated; provided, however,
that, if in connection with the Termination Transaction, a purchase, tender or
exchange offer shall have been made to and accepted by the holders of the
percentage required for the approval of mergers under the organizational
documents of the General Partner Entity, each holder of Partnership Units shall
receive, or shall have the right to receive without any right of Consent set
forth above in this Section 11.2.B, the greatest amount of cash, securities, or
other property which such holder would have received had it exercised the
Redemption Right and received Shares in exchange for its Partnership Units
immediately prior to the expiration of such purchase, tender or exchange offer
and had thereupon accepted such purchase, tender or exchange offer.

 

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

 

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Section 11.3                            Limited Partners’ Rights to Transfer

 

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

 

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

 

C.            Permitted Transfers. A Limited Partner may transfer, with or
without the consent of the General Partner, all or a portion of its Partnership
Interest (i) in the case of a Limited Partner who is an individual, to a member
of his Immediate Family, any trust formed for the benefit of himself and/or
members of his Immediate Family, or any partnership, limited liability company,
joint venture, corporation or other business entity comprised only of himself
and/or members of his Immediate Family and entities the ownership interests in
which are owned by or for the benefit of himself and/or members of his Immediate
Family, (ii) in the case of a Limited Partner which is a trust, to the
beneficiaries of such trust, (iii) in the case of a Limited Partner which is a
partnership, limited liability company, joint venture, corporation or other
business entity to which Units were transferred pursuant to clause (i) above, to
its partners, owners or shareholders, as the case may be, who are members of the
Immediate Family of or are actually the Person(s) who transferred Partnership
Units to it pursuant to clause (i) above, (iv) in the case of a Limited Partner
which acquired Partnership Units as of the date hereof and which is a
partnership, limited liability company, joint venture, corporation or other
business entity, to its partners, owners, shareholders or Affiliates thereof, as
the case may be, or the Persons owning the beneficial interests in any of its
partners, owners or shareholders or Affiliates thereof (it being understood that
this clause (iv) will apply to all of each Person’s Interests whether the
Partnership Units relating thereto were acquired on the date hereof or
hereafter), (v) in the case of a Limited Partner which is a partnership, limited
liability company, joint venture, corporation or other business entity other
than any of the foregoing described in clause (iii) or (iv), in accordance with
the terms of any agreement between such Limited Partner and the Partnership
pursuant to which such Partnership Interest was issued, (vi) pursuant to a gift
or other transfer without consideration, (vii) pursuant to applicable laws of
descent or distribution, (viii) to

 

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another Limited Partner and (ix) pursuant to a grant of security interest or
other encumbrance effectuated in a bona fide transaction or as a result of the
exercise of remedies related thereto, subject to the provisions of
Section 11.3.E hereof. A trust or other entity will be considered formed “for
the benefit” of a Partner’s Immediate Family even though some other Person has a
remainder interest under or with respect to such trust or other entity.

 

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

 

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

 

Section 11.4                            Substituted Limited Partners

 

A.            Consent of General Partner. No Limited Partners shall have the
right to substitute a transferee as a Limited Partner in its place. The General
Partner shall, however, have the right to consent to the admission of a
transferee of the interest of a Limited Partner pursuant to this Section 11.4 as
a Substituted Limited Partner, which consent may be given or withheld by the
General Partner in its sole and absolute discretion. The General Partner’s
failure or refusal to permit a transferee of any such interests to become a
Substituted Limited Partner shall not give rise to any cause of action against
the Partnership, the General Partner or any Partner. The General Partner hereby
grants its consent to the admission as a Substituted Limited Partner to any bona
fide financial institution that loans money or otherwise extends credit to a
holder of Partnership Units and thereafter becomes the owner of such Partnership
Units pursuant to the exercise by such financial institution of its rights under
a pledge of such Partnership Units granted in connection with such loan or
extension of credit.

 

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

 

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

 

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

 

Section 11.5                            Assignees

 

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

 

Section 11.6                            General Provisions

 

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

 

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

 

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

 

D.            Allocations. If any Partnership Interest is transferred during any
quarterly segment of the Partnership’s fiscal year in compliance with the
provisions of this Article XI or

 

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

 

E.             Additional Restrictions.  Notwithstanding anything to the
contrary herein, and in addition to any other restrictions on transfer herein
contained, including, without limitation, the provisions of Article VII and this
Article XI, in no event may any transfer or assignment of a Partnership Interest
by any Partner (including pursuant to Section 8.6) be made without the express
consent of the General Partner, in its sole and absolute discretion, (i) to any
person or entity who lacks the legal right, power or capacity to own a
Partnership Interest; (ii) in violation of applicable law; (iii) of any
component portion of a Partnership Interest, such as the Capital Account, or
rights to distributions, separate and apart from all other components of a
Partnership Interest; (iv) if in the opinion of legal counsel to the Partnership
there is a significant risk that such transfer would cause a termination of the
Partnership for U.S. federal or state income tax purposes (except as a result of
the redemption or exchange for Shares of all Partnership Units held by all
Limited Partners other than the General Partner, or any Subsidiary of either, or
pursuant to a transaction expressly permitted under Section 11.2); (v) if in the
opinion of counsel to the Partnership, there is a significant risk that such
transfer would cause the Partnership to be treated as an association taxable as
a corporation for U.S. federal income tax purposes; (vi) if such transfer
requires the registration of such Partnership Interest pursuant to any
applicable federal or state securities laws; (vii) if such transfer is
effectuated through an “established securities market” or a “secondary market
(or the substantial equivalent thereof)” within the meaning of Section 7704 of
the Code or such transfer causes the Partnership to become a “publicly traded
partnership,” as such term is defined in Section 469(k)(2) or Section 7704(b) of
the Code (provided, however, that, this clause (vii) shall not be the basis for
limiting or restricting in any manner the exercise of the Redemption Right under
Section 8.6 unless, and only to the extent that, outside tax counsel provides to
the General Partner an opinion to the effect that, in the absence of such
limitation or restriction, there is a significant risk that the Partnership will
be treated as a “publicly traded partnership” and, by reason thereof, taxable as
a

 

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corporation); (viii) if such transfer subjects the Partnership or the activities
of the Partnership to regulation under the Investment Company Act of 1940, the
Investment Advisors Act of 1940 or ERISA, each as amended; or (ix) if in the
opinion of legal counsel for the Partnership, there is a risk that such transfer
would adversely affect the ability of the General Partner Entity to continue to
qualify as a REIT or subject the General Partner Entity to any additional taxes
under Section 857 or Section 4981 of the Code.

 

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

 

ARTICLE XII
ADMISSION OF PARTNERS

 

Section 12.1                            Admission of a Successor General Partner

 

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

 

Section 12.2                            Admission of Additional Limited Partners

 

A.            General. No Person shall be admitted as an Additional Limited
Partner without the consent of the General Partner, which consent shall be given
or withheld in the General

 

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Partner’s sole and absolute discretion. A Person who makes a Capital
Contribution to the Partnership in accordance with this Agreement or who
exercises an option to receive Partnership Units shall be admitted to the
Partnership as an Additional Limited Partner only with the consent of the
General Partner and only upon furnishing to the General Partner (i) evidence of
acceptance in form satisfactory to the General Partner of all of the terms and
conditions of this Agreement, including, without limitation, the power of
attorney granted in Section 15.11 and (ii) such other documents or instruments
as may be required in the discretion of the General Partner to effect such
Person’s admission as an Additional Limited Partner. The admission of any Person
as an Additional Limited Partner shall become effective on the date upon which
the name of such Person is recorded on the books and records of the Partnership,
following the consent of the General Partner to such admission.

 

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

 

Section 12.3                            Amendment of Agreement and Certificate
of Limited Partnership

 

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

 

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ARTICLE XIII
DISSOLUTION AND LIQUIDATION

 

Section 13.1                            Dissolution

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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Section 13.2                            Winding Up

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

B.            Deferred Liquidation. Notwithstanding the provisions of
Section 13.2.A which require liquidation of the assets of the Partnership, but
subject to the order of priorities set forth therein, if prior to or upon
dissolution of the Partnership the Liquidator determines that an immediate sale
of part or all of the Partnership’s assets would be impractical or would cause
undue loss to the Partners, the Liquidator may, in its sole and absolute
discretion, defer for a reasonable time the liquidation of any assets except
those necessary to satisfy liabilities of the Partnership (including to those
Partners as creditors) or distribute to the Partners, in lieu of cash,

 

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as tenants in common and in accordance with the provisions of Section 13.2.A,
undivided interests in such Partnership assets as the Liquidator deems not
suitable for liquidation. Any such distributions in kind shall be made only if,
in the good faith judgment of the Liquidator, such distributions in kind are in
the best interest of the Partners, and shall be subject to such conditions
relating to the disposition and management of such properties as the Liquidator
deems reasonable and equitable and to any agreements governing the operation of
such properties at such time. The Liquidator shall determine the fair market
value of any property distributed in kind using such reasonable method of
valuation as it may adopt.

 

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

 

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

 

B.                                     Restoration of Deficit Capital Accounts
Upon Liquidation of the Partnership. If any Partner has a deficit balance in its
Capital Account (after giving effect to all contributions, distributions and
allocations for all taxable years, including the year during which such
liquidation occurs), such Partner shall have no obligation to make any
contribution to the capital of the Partnership with respect to such deficit, and
such deficit shall not be considered a debt owed to the Partnership or to any
other Person for any purpose whatsoever, except as otherwise set forth in this
Section 13.3.B, or as otherwise expressly agreed in writing by the affected
Partner and the Partnership after the date hereof.  Notwithstanding the
foregoing, (i) if the General Partner has a deficit balance in its Capital
Account (after giving effect to all contributions, distributions, and
allocations for all Partnership years or portions thereof, including the year
during which such liquidation occurs), the General Partner shall contribute to
the capital of the Partnership the amount necessary to restore such deficit
balance to zero in

 

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compliance with Regulations Section 1.704-1(b)(2)(ii)(b)(3); (ii) if a DRO
Partner has a deficit balance in its Capital Account (after giving effect to all
contributions, distributions, and allocations for all Partnership Years or
portions thereof, including the year during which such liquidation occurs), such
DRO Partner shall be obligated to make a contribution to the Partnership with
respect to any such deficit balance in such DRO Partner’s Capital Account upon a
liquidation of the Partnership in an amount equal to the lesser of such deficit
balance or such DRO Partner’s DRO Amount; and (iii) the first sentence of this
Section 13.3.B shall not apply with respect to any other Partner to the extent,
but only to such extent, that such Partner previously has agreed in writing,
with the consent of the General Partner, to undertake an express obligation to
restore all or any portion of a deficit that may exist in its Capital Account
upon a liquidation of the Partnership.  No Limited Partner shall have any right
to become a DRO Partner, to increase its DRO Amount, or otherwise agree to
restore any portion of any deficit that may exist in its Capital Account without
the express written consent of the General Partner, in its sole and absolute
discretion.  Any contribution required of a Partner under this Section 13.3.B.
shall be made on or before the later of (i) the end of the Partnership Year in
which the interest is liquidated or (ii) the ninetieth (90th) day following the
date of such liquidation.  The proceeds of any contribution to the Partnership
made by a DRO Partner with respect to a deficit in such DRO Partner’s Capital
Account balance shall be treated as a Capital Contribution by such DRO Partner
and the proceeds thereof shall be treated as assets of the Partnership to be
applied as set forth in Section 13.2.A.

 

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

 

D.                                    Effect of the Death of a DRO Partner.
After the death of a DRO Partner who is an individual, the executor of the
estate of such DRO Partner may elect to reduce (or eliminate) the DRO Amount of
such DRO Partner. Such elections may be made by such executor by delivering

 

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

 

Section 13.4                            Rights of Limited Partners

 

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

 

Section 13.5                            Notice of Dissolution

 

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

 

Section 13.6                            Cancellation of Certificate of Limited
Partnership

 

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

 

Section 13.7                            Reasonable Time for Winding Up

 

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

 

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Section 13.8                            Waiver of Partition

 

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

 

Section 13.9                            Liability Of Liquidator

 

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

 

ARTICLE XIV
AMENDMENT OF PARTNERSHIP AGREEMENT; MEETINGS

 

Section 14.1                            Amendments

 

A.                                   General. Amendments to this Agreement may
be proposed by the General Partner or by any Limited Partner holding Partnership
Interests representing twenty-five percent (25%) or more of the Percentage
Interest of the Class A Units.  Following such proposal (except an amendment
governed by Section 14.1.B), the General Partner shall submit any proposed
amendment to the Limited Partners. The General Partner shall seek the written
Consent of the Partners as set forth in this Section 14.1 on the proposed
amendment or shall call a meeting to vote thereon and to transact any other
business that it may deem appropriate. For purposes of obtaining a written
Consent, the General Partner may require a response within a reasonable
specified time, but not less than fifteen (15) days, any failure to respond in
such time period shall constitute a vote in favor of the recommendation of the
General Partner. A proposed amendment shall be adopted and be effective as an
amendment hereto if it is approved by the General Partner and, except as
provided in Section 14.1.B, 14.1.C or 14.1.D, it receives the Consent of the
Partners holding Partnership Interests representing more than fifty percent
(50%) of the Percentage Interest of the Class A Units (including Class A Units
held by the General Partner).

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

(7)                                  to include provisions in the Agreement that
may be referenced in any rulings, regulations, notices, announcements, or other
guidance regarding the federal income tax treatment of compensatory partnership
interests issued and made effective after the date hereof or in connection with
any elections that the General Partner determines to be necessary or advisable
in respect of any such guidance.  Any such amendment may include, without
limitation, (a) a provision authorizing or directing the General Partner to make
any election under such guidance, (b) a covenant by the Partnership that all of
the Partners must (I) comply with the such guidance and (II) take all actions
(or, as the case may be, not take any action) necessary, including providing the
Partnership with any required information, to permit the Partnership to comply
with the requirements set forth or referred to in the Regulations for such
election or other related guidance from the IRS, and (c) an amendment to the
capital account maintenance provisions and the allocation provisions contained
in Exhibit B or Exhibit C of this Agreement so that such provisions comply with
(I) the provisions of the Code and the Treasury Regulations as they apply to the
issuance of compensatory partnership interests and (II) the requirements of such
guidance and any election made by the General Partner with respect thereto,
including, a provision requiring “forfeiture allocations” as appropriate.

 

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

 

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

 

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

 

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

 

Section 14.2                            Meetings of the Partners

 

A.                                   General. Meetings of the Partners may be
called by the General Partner and shall be called upon the receipt by the
General Partner of a written request by Limited Partners holding Partnership
Interests representing twenty-five percent (25%) or more of the Percentage
Interest of the Class A Units (including Class A Units held by the General
Partner). The call shall state the nature of the business to be transacted.
Notice of any such meeting shall be given to all Partners not less than seven
(7) days nor more than thirty (30) days prior to the date of such meeting.
Partners entitled to vote may vote in person or by proxy at such meeting.
Whenever the vote or Consent of Partners is permitted or required under this
Agreement, such vote or Consent may be given at a meeting of Partners or may be
given in accordance with the procedure prescribed in Section 14.1.A. Except as
otherwise expressly provided in this Agreement, the

 

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Consent of holders of Partnership Interests representing a majority of the
Percentage Interests of the Class A Units shall control (including Class A Units
held by the General Partner).

 

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

 

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

 

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

 

ARTICLE XV
GENERAL PROVISIONS

 

Section 15.1                            Addresses and Notice

 

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

 

Section 15.2                            Titles and Captions

 

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

 

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

 

Section 15.3                            Pronouns And Plurals

 

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

 

Section 15.4                            Further Action

 

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

 

Section 15.5                            Binding Effect

 

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

 

Section 15.6                            Creditors

 

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

 

Section 15.7                            Waiver

 

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

 

Section 15.8                            Counterparts

 

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

 

Section 15.9                            Applicable Law

 

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

 

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Section 15.10                     Invalidity Of Provisions

 

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

 

Section 15.11                     Power Of Attorney

 

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

 

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

 

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

 

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

 

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

 

Section 15.12                     Entire Agreement

 

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

 

Section 15.13                     No Rights As Shareholders

 

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

 

Section 15.14                     Limitation To Preserve REIT Status

 

To the extent that any amount paid or credited to the General Partner Entity or
any of its officers, trustees, employees or agents pursuant to Section 7.4 or
Section 7.7 would constitute gross income to the General Partner Entity for
purposes of Section 856(c)(2) or 856(c)(3) of the Code (a “General Partner
Payment”) then, notwithstanding any other provision of this

 

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Agreement, the amount of such General Partner Payment for any Fiscal Year shall
not exceed the lesser of:

 

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

 

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

 

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

 

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

 

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

 

 

GENERAL PARTNER:

 

 

 

 

 

RLJ Lodging Trust, a Maryland real estate investment trust

 

 

 

 

By:

/s/ Thomas J. Baltimore, Jr.

 

 

 

 

 

Name:

Thomas J. Baltimore, Jr.

 

 

Title:

President and Chief Executive Officer

 

 

 

 

 

LIMITED PARTNERS

 

 

 

By:

RLJ Lodging Trust, a Maryland real estate investment trust,

 

 

 

 

as Attorney-in-Fact for the Limited Partners

 

 

 

 

By:

/s/ Thomas J. Baltimore, Jr.

 

 

 

 

 

Name:

Thomas J. Baltimore, Jr.

 

 

Title:

President and Chief Executive Officer

 

[End of signatures]

 

S-1

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EXHIBIT A

 

FORM OF PARTNER REGISTRY

 

 

 

CLASS A UNITS

 

Name And Address Of 
Partner

 

Partnership
Units

 

Initial Capital
Account

 

Percentage
Interest (1)

 

 

 

 

 

 

 

 

 

GENERAL PARTNER:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

RLJ Lodging Trust

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

LIMITED PARTNERS:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

[NAME]

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

TOTAL CLASS A UNITS

 

 

 

 

 

100.00000

%

 

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

 

EXHIBIT B

 

CAPITAL ACCOUNT MAINTENANCE

 

1.                                      Capital Accounts of the Partners

 

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

 

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

 

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

 

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

 

(3)                                  Any income, gain or loss attributable to
the taxable disposition of any Partnership property shall be determined as if
the adjusted basis of such property as of such date

 

Ex. B-1

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

 

of disposition were equal in amount to the Partnership’s Carrying Value with
respect to such property as of such date.

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

Ex. B-2

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

 

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

 

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

 

2.                                      No Interest

 

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

 

3.                                      No Withdrawal

 

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

 

Ex. B-3

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

 

EXHIBIT C

 

SPECIAL ALLOCATION RULES

 

1.                                      Special Allocation Rules.

 

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

 

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

 

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

 

Ex. C-1

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

 

C.                                Qualified Income Offset. In the event any
Partner unexpectedly receives any adjustments, allocations or distributions
described in Regulations Sections 1.704-l(b)(2)(ii)(d)(4),
l.704-1(b)(2)(ii)(d)(5), or 1.704-l(b)(2)(ii)(d)(6), and after giving effect to
the allocations required under Sections 1.A and 1.B hereof with respect to such
Fiscal Year, such Partner has an Adjusted Capital Account Deficit, items of
Partnership income and gain (consisting of a pro rata portion of each item of
Partnership income, including gross income and gain for the Fiscal Year) shall
be specifically allocated to such Partner in an amount and manner sufficient to
eliminate, to the extent required by the Regulations, its Adjusted Capital
Account Deficit created by such adjustments, allocations or distributions as
quickly as possible. This Section 1.C is intended to constitute a “qualified
income offset” under Regulations Section 1.704-1(b)(2)(ii)(d) and shall be
interpreted consistently therewith.

 

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

 

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

 

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

 

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

 

Ex. C-2

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2.                                      Allocations for Tax Purposes

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

C.                                     To the extent Regulations promulgated
pursuant to Section 704(c) of the Code permit a Partnership to utilize
alternative methods to eliminate the disparities between the

 

Ex. C-3

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

 

Carrying Value of property and its adjusted basis, the General Partner shall
have the authority to elect the method to be used by the Partnership and such
election shall be binding on all Partners.

 

Ex. C-4

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EXHIBIT D

 

NOTICE OF REDEMPTION

 

The undersigned hereby irrevocably (i) redeems                   Partnership
Units in RLJ Lodging Trust, L.P. in accordance with the terms of the First
Amended and Restated Agreement of Limited Partnership of RLJ Lodging Trust,
L.P., as amended, and the Redemption Right referred to therein, (ii) surrenders
such Partnership Units and all right, title and interest therein and (iii)
directs that the Cash Amount or Shares Amount (as determined by the General
Partner) deliverable upon exercise of the Redemption Right be delivered to the
address specified below, and if Shares are to be delivered, such Shares be
registered or placed in the name(s) and at the address(es) specified below. The
undersigned hereby represents, warrants, and certifies that the undersigned (a)
has marketable and unencumbered title to such Partnership Units, free and clear
of the rights of or interests of any other person or entity, (b) has the full
right, power and authority to redeem and surrender such Partnership Units as
provided herein and (c) has obtained the consent or approval of all persons or
entities, if any, having the right to consult or approve such redemption and
surrender.

 

 

 

Dated:

 

 

Name of Limited Partner:

 

 

 

 

 

 

 

(Signature of Limited Partner)

 

 

 

 

 

 

 

(Street Address)

 

 

 

 

 

 

 

Ex. D-1

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

 

 

 

 

(City)

(State)

(Zip Code)

 

 

 

 

 

Signature Guaranteed by:

 

 

 

 

 

 

 

 

IF SHARES ARE TO BE ISSUED, ISSUE TO:

 

 

 

 

 

 

Name:

 

 

 

 

 

 

Social Security or tax identifying number:

 

 

 

 

Ex. D-2

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

 

EXHIBIT E

 

FORM OF DRO REGISTRY

 

 

 

DRO AMOUNT

 

PART I DRO PARTNERS

 

 

 

 

 

 

 

PART II DRO PARTNERS

 

 

 

 

Ex. E-1

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

 

EXHIBIT F

 

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

 

The undersigned holder of LTIP Units hereby irrevocably (i) elects to convert
         LTIP Units in RLJ Lodging Trust, L.P. (the “Partnership”) into Class A
Units in accordance with the terms of the First Amended and Restated Agreement
of Limited Partnership of the Partnership, as amended; and (ii) directs that any
cash in lieu of Class A Units that may be deliverable upon such conversion be
delivered to the address specified below.  The undersigned hereby represents,
warrants, and certifies that the undersigned (a) has title to such LTIP Units,
free and clear of the rights or interests of any other person or entity other
than the Partnership; (b) has the full right, power, and authority to cause the
conversion of such LTIP Units as provided herein; and (c) has obtained the
consent to or approval of all persons or entities, if any, having the right to
consent or approve such conversion.

 

 

 

Dated:

 

 

Name of Limited Partner:

 

 

 

 

 

 

 

(Signature of Limited Partner)

 

 

 

 

 

 

 

(Street Address)

 

 

 

 

 

 

 

(City)

(State)

(Zip Code)

 

Ex. F-1

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

 

 

Signature Guaranteed by:

 

 

 

 

 

 

 

Ex. F-2

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

 

EXHIBIT G

 

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

 

RLJ Lodging Trust, L.P. (the “Partnership”) hereby irrevocably elects to cause
the number of LTIP Units held by the holder of LTIP Units set forth below to be
converted into Class A Units in accordance with the terms of the First Amended
and Restated Agreement of Limited Partnership of the Partnership, as amended.

 

 

Name of Holder:

 

 

 

Date of this Notice:

 

 

 

 

 

Number of LTIP Units to be Converted:

 

 

 

Please Print: Exact Name as Registered with Partnership

 

Ex. G-1

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