Exhibit 10.1

AMENDED AND RESTATED

AGREEMENT OF LIMITED PARTNERSHIP

OF

FOUR CORNERS OPERATING PARTNERSHIP, LP

November 7, 2016

 

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TABLE OF CONTENTS

 

         Page        ARTICLE I DEFINED TERMS      1    ARTICLE II ORGANIZATIONAL
MATTERS      13   

Section 2.1

 

Organization

     13   

Section 2.2

 

Name

     14   

Section 2.3

 

Registered Office and Agent; Principal Office

     14   

Section 2.4

 

Term

     14    ARTICLE III PURPOSE      15   

Section 3.1

 

Purpose and Business

     15   

Section 3.2

 

Powers

     15    ARTICLE IV CAPITAL CONTRIBUTIONS AND ISSUANCES OF PARTNERSHIP
INTERESTS      16   

Section 4.1

 

Capital Contributions of the Partners

     16   

Section 4.2

 

Issuances of Partnership Interests

     16   

Section 4.3

 

No Preemptive Rights

     17   

Section 4.4

 

Other Contribution Provisions

     17   

Section 4.5

 

No Interest on Capital

     18    ARTICLE V DISTRIBUTIONS      18   

Section 5.1

 

Requirement and Characterization of Distributions

     18   

Section 5.2

 

Distributions in Kind

     20   

Section 5.3

 

Amounts Withheld

     20   

Section 5.4

 

Distributions upon Liquidation

     21   

Section 5.5

 

Revisions to Reflect Issuance of Partnership Interests

     21    ARTICLE VI ALLOCATIONS      21   

Section 6.1

 

Allocations for Capital Account Purposes

     21   

Section 6.2

 

Revisions to Allocations to Reflect Issuance of Partnership Interests

     23    ARTICLE VII MANAGEMENT AND OPERATIONS OF BUSINESS      24   

Section 7.1

 

Management

     24   

Section 7.2

 

Certificate of Limited Partnership

     28   

Section 7.3

 

Title to Partnership Assets

     29   

Section 7.4

 

Reimbursement of the General Partner

     29   

Section 7.5

 

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

     32   

Section 7.6

 

Transactions with Affiliates

     35   

Section 7.7

 

Indemnification

     35   

 

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Section 7.8

 

Liability of the General Partner

     37   

Section 7.9

 

Other Matters Concerning the General Partner

     39   

Section 7.10

 

Reliance by Third Parties

     39   

Section 7.11

 

Loans by Third Parties

     40    ARTICLE VIII RIGHTS AND OBLIGATIONS OF LIMITED PARTNERS      40   

Section 8.1

 

Limitation of Liability

     40   

Section 8.2

 

Management of Business

     40   

Section 8.3

 

Outside Activities of Limited Partners

     40   

Section 8.4

 

Return of Capital

     41   

Section 8.5

 

Rights of Limited Partners Relating to the Partnership

     41   

Section 8.6

 

Redemption Right

     42    ARTICLE IX BOOKS, RECORDS, ACCOUNTING AND REPORTS      45   

Section 9.1

 

Records and Accounting

     45   

Section 9.2

 

Fiscal Year

     46   

Section 9.3

 

Reports

     46    ARTICLE X TAX MATTERS      47   

Section 10.1

 

Preparation of Tax Returns

     47   

Section 10.2

 

Tax Elections

     47   

Section 10.3

 

Tax Partner and Partnership Tax Audit Matters

     47   

Section 10.4

 

Organizational Expenses

     50   

Section 10.5

 

Withholding

     50    ARTICLE XI TRANSFERS AND WITHDRAWALS      51   

Section 11.1

 

Transfer

     51   

Section 11.2

 

Transfers and Withdrawals by General Partner and General Partner Entity

     51   

Section 11.3

 

Transfers by Limited Partners

     52   

Section 11.4

 

Substituted Limited Partners

     54   

Section 11.5

 

Assignees

     54   

Section 11.6

 

General Provisions

     55    ARTICLE XII ADMISSION OF PARTNERS      57   

Section 12.1

 

Admission of a Successor General Partner

     57   

Section 12.2

 

Admission of Additional Limited Partners

     57   

Section 12.3

 

Amendment of Agreement and Certificate of Limited Partnership

     58    ARTICLE XIII DISSOLUTION AND LIQUIDATION      58   

Section 13.1

 

Dissolution

     58   

Section 13.2

 

Winding Up

     59   

Section 13.3

 

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

     60   

 

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Section 13.4

 

Rights of Limited Partners

     62   

Section 13.5

 

Notice of Dissolution

     62   

Section 13.6

 

Cancellation of Certificate of Limited Partnership

     62   

Section 13.7

 

Reasonable Time for Winding Up

     62   

Section 13.8

 

Waiver of Partition

     62   

Section 13.9

 

Liability of Liquidator

     62    ARTICLE XIV AMENDMENT OF PARTNERSHIP AGREEMENT; MEETINGS      62   

Section 14.1

 

Amendments

     62   

Section 14.2

 

Meetings of the Partners

     64    ARTICLE XV GENERAL PROVISIONS      65   

Section 15.1

 

Addresses and Notice

     65   

Section 15.2

 

Titles and Captions

     65   

Section 15.3

 

Pronouns and Plurals

     65   

Section 15.4

 

Further Action

     65   

Section 15.5

 

Binding Effect

     65   

Section 15.6

 

Creditors

     66   

Section 15.7

 

Waiver

     66   

Section 15.8

 

Counterparts

     66   

Section 15.9

 

Applicable Law

     66   

Section 15.10

 

Invalidity of Provisions

     66   

Section 15.11

 

Power of Attorney

     66   

Section 15.12

 

Entire Agreement

     68   

Section 15.13

 

No Rights as Shareholders

     68   

Section 15.14

 

Limitation to Preserve REIT Status

     68   

List of Exhibits

Exhibit A    Form of Partner Registry Exhibit B    Capital Account Maintenance
Exhibit C    Special Allocation Rules Exhibit D    Notice of Redemption Exhibit
E    Form of DRO Registry

 

 

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AMENDED AND RESTATED

AGREEMENT OF LIMITED PARTNERSHIP

OF

FOUR CORNERS OPERATING PARTNERSHIP, LP

THIS AMENDED AND RESTATED AGREEMENT OF LIMITED PARTNERSHIP (as may be further
amended, supplemented or restated from time to time, the “Agreement”) of Four
Corners Operating Partnership, LP (the “Partnership”) is dated as of November
__, 2016 and entered into by and among Four Corners GP, LLC, a Delaware limited
liability company, as the general partner (the “General Partner”), Four Corners
Property Trust, Inc. a Maryland corporation (the “Trust”) as a Limited Partner,
FCPT OP Holdings, LP, a Delaware limited partnership (“Holdings”) as a Limited
Partner, and the Persons whose names are set forth on the Partner Registry (as
hereinafter defined), together with any other Persons who become Partners in the
Partnership as provided herein.

WHEREAS, on August 11, 2015 (the “Formation Date”), the Partnership was formed
as a limited partnership pursuant to the Delaware Revised Uniform Limited
Partnership Act by the filing of the Certificate of Limited Partnership with the
Secretary of State of the State of Delaware, and the General Partner and the
Trust entered into an original agreement of limited partnership of the
Partnership effective as of the Formation Date (the “Original Partnership
Agreement”);

WHEREAS, on August 18, 2016, the Trust contributed an aggregate amount of 0.2%
of its limited partnership interests in the Partnership to Holdings and FCPT
TRS, LLC, a Delaware limited liability company and the general partner of
Holdings, with TRS subsequently contributing its limited partnership interests
in the Partnership to Holdings. As a result, Holdings owned a 0.2% limited
partnership interest in the Partnership as of August 18, 2016.

WHEREAS, the Partners (as hereinafter defined) now desire to amend and restate
the Original Partnership Agreement as set forth herein, which shall, amend,
restate and supersede the Original Partnership 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 Partnership 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.

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

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

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

“Adjusted Capital Account” means the Capital Account maintained for each Partner
as of the end of each Fiscal Year or other period (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.

“Affiliate” means, with respect to any Person, (i) any Person directly or
indirectly controlling, controlled by or under common control with such Person,
or (ii) any officer, director, manager, general partner or trustee of such
Person or any Person referred to in the foregoing clause (i). For purposes of
this definition, “control,” when used with respect to any Person, means the
power to direct the management and policies of such Person, directly or
indirectly, whether through the ownership of voting securities, by contract or
otherwise, and the terms “controlling” and “controlled” have meanings
correlative to the foregoing.

“Aggregate DRO Amount” means the aggregate balances of the DRO Amounts, if any,
of all DRO 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
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” has the meaning set forth in the Preamble.

 

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“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, cash of the Partnership, regardless of source (including Capital
Contributions and loans to the Partnership), that the General Partner, in its
sole and absolute discretion, determines is appropriate for distribution to the
Partners.

“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, New York or San Francisco, California 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 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 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, to the extent any of the following holds Class A
Units, (i) 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 Class A Units 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.

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

“Conversion 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 the
General Partner 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

 

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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.

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

“Current Partnership Audit Rules” has the meaning set forth in Section 10.3.A.

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

“Depreciation” means, for each Fiscal Year or other period, an amount equal to
the U.S. federal income tax depreciation, amortization, or other cost recovery
deduction allowable with respect to an asset for such year or other period,
except that if the Carrying Value of an asset differs from its adjusted basis
for U.S. federal income tax purposes at the beginning of such year or other
period, Depreciation shall be an amount as calculated in accordance with
Regulations Section 1.704-3; provided, however, that if the U.S. federal income
tax depreciation,

 

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amortization, or other cost recovery deduction for such year is zero and if
Depreciation is calculated in accordance with Regulations Section 1.704-3(b),
Depreciation shall be determined with reference to such beginning Carrying Value
using any reasonable method selected by the 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.

“Equity Incentive Plan” means any equity incentive or compensation plan
hereafter adopted by the Partnership, the General Partner or a General Partner
Entity, including, without limitation, the Trust’s 2015 Omnibus Incentive Plan,
as amended from time to time.

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

“Excluded Units” has the meaning set forth in Section 11.2.C.

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

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

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

“Formation Date” has the meaning set forth in the recitals hereto.

“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 Four Corners GP, LLC a Delaware limited liability
company, or its successor or permitted assignee, as general partner of the
Partnership.

 

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“General Partner Entity” means the General Partner; provided, however, that if
(i) the shares of common stock (or other comparable equity interests) of the
General Partner are at any time not Publicly Traded and (ii) the shares of
common stock (or other comparable equity interests) of an entity that owns,
directly or indirectly, fifty percent (50%) or more of the shares of common
stock (or other comparable equity interests) of the General Partner are Publicly
Traded, the term “General Partner Entity” shall refer to such entity whose
shares of common stock (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.

“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.

 

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“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) any direct or indirect trustee, manager, director, officer,
member, shareholder or partner of the Partnership, the General Partner, the
General Partner Entity or a Limited Partner, 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.

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

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

“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.

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

“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 the Equity Incentive Plan, or (ii) any Debt issued by the
General Partner that provides any of the rights described in clause (i).

 

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“Nonrecourse 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.

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

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

“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 Partner Nonrecourse Debt for a Fiscal Year shall be determined in
accordance with the rules of Regulations Section 1.704-2(i)(2).

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

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

“Partnership Approval” has the meaning set forth in Section 11.2.C.

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

 

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“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.A, 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.

“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 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 Partners at any time when there are Class B Units outstanding,
all Class B Units shall be treated as Class A Units.

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

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

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

“Qualified Assets” has the meaning set forth in Section 7.5.A.

“Qualified REIT Subsidiary” 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.

 

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“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).

“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.

“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 C, 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.

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

 

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“Share” means a share of common stock (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 organizational documents of the
General Partner Entity. Shares issued in lieu of the Cash Amount may be either
registered or unregistered Shares at the option of the General Partner. 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 the shares of common stock (or other comparable equity
interest) of the General Partner Entity.

“Shareholder Approval” has the meaning set forth in Section 11.2.B.

“Shareholder Vote” has the meaning set forth in Section 11.2.B.

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

“Specified Redemption Date” means the twentieth (20th) 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 (30th)
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.

“Tender Offer” 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.

 

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“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 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).

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. 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. Except as expressly provided herein, the rights and obligations of
the Partners and the administration and termination of the Partnership shall be
governed by the Act. The Partnership Interest of each Partner shall be personal
property for all purposes.

 

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

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

Section 2.2 Name

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

Section 2.3 Registered Office and Agent; Principal Office

The address of the registered office of the Partnership in the State of Delaware
shall be located at 3411 Silverside Road, Rodney Building #104, Wilmington,
Delaware 19810, and the registered agent for service of process on the
Partnership in the State of Delaware at such registered office shall be
Corporate Creations Network, Inc. The principal office of the Partnership shall
be 591 Redwood Highway, Suite 1150, Mill Valley, California 94941, 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 August 11, 2015, 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 Entity, at all times to be classified as a REIT,
unless the General Partner Entity 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 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 or its
Affiliates, members and shareholders.

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 (if such entity has chosen to attempt to
qualify as a REIT), (ii) could subject any of the General Partner or 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 any of 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

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. 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
date hereof in accordance with the terms of this Agreement. One thousand (1,000)
Partnership Units are held by the General Partner and are the General Partner
Interest of the General Partner. 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, provided that such Capital Account
deficit did not arise by reason of distributions in violation of this Agreement
or applicable law or other actions in violation of this Agreement or applicable
law.

Section 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 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 Entity unless either (a) the Partnership Interests
are issued in connection with the grant, award or issuance of Shares or other
equity interests in the General Partner Entity (including a transaction
described in Section 7.5.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 Entity in accordance with

 

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this Section 4.2.A, or (b) 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 5.5, Section 6.2 and Section 8.6) as it deems
necessary to reflect the issuance of such Partnership Interests.

B. Classes of Partnership Units. From and after the date of the Agreement, the
Partnership shall have two classes of Partnership Units entitled “Class A
Units,” “Class B Units,” and such additional classes of Partnership Units as may
be created by the General Partner pursuant to Section 4.2.A. Class A Units,
Class B Units or a class of Partnership Interests created pursuant to
Section 4.2.A, 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.

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 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.

 

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Section 4.5 No Interest on Capital

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

ARTICLE V

DISTRIBUTIONS

Section 5.1 Requirement and Characterization of Distributions

A. Distribution of Operating Income. 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. If the General
Partner Entity has chosen to attempt to qualify as a REIT, 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 in a manner that
would not cause any such distribution or portion thereof to be treated as part
of a sale of property to the 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 Entity 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, if any, 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) (if
applicable), 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).

 

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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 pursuant to
Section 5.1.A. (a “Distribution Period”), Class B Units are outstanding on the
Partnership Record Date for such Distribution Period, the General Partner shall
allocate the Available Cash with respect to such Distribution Period available
for distribution with respect to the Class A Units and Class B Units
collectively between the Partners who are holders of Class A Units (“Class A”)
and the Partners who are holders of Class B Units (“Class B”) as follows:

 

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

 

            A x Y             (A x Y) + (B x X)

 

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

 

            B x X             (A x Y) + (B x X)

 

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

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

 

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

 

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

 

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

 

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

 

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

 

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

Section 5.2 Distributions in Kind

The General Partner may determine, in its sole and absolute discretion, to make
a distribution in kind of Partnership assets to the holders of Partnership
Interests, and such assets shall be distributed in such a fashion as to ensure
that the fair market value is distributed and allocated in the same manner as a
cash distribution in accordance with Articles V, VI and XIII hereof.

Section 5.3 Amounts Withheld

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

 

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Section 5.4 Distributions upon Liquidation

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

Section 5.5 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 terms
of the issuance of such Partnership Interests. Such revisions shall not require
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 to the extent that Net Loss previously
allocated to the General Partner pursuant to Section 6.1.B(6) exceed Net Income
previously allocated to the General Partner pursuant to this clause (1);

 

  (2) second, to each DRO Partner until the cumulative Net Income allocated to
such DRO Partner under this clause (2) equals the cumulative Net Loss allocated
to 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 Loss
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 Loss 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 Loss allocated to such Partners under
Section 6.1.B(3);

 

  (5)

fifth, to the holders of any Partnership Interests that are entitled to any
preference in distribution in accordance with the rights of any other class of
Partnership Interests until each such Partnership Interest has been allocated,
on a cumulative

 

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  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);

 

  (6) sixth, to the holders of any Partnership Interests that are not entitled
to any preference upon liquidation until the cumulative Net Income allocated
under this clause (6) equals the cumulative Net Loss allocated to such Partners
under Section 6.1.B(2); and

 

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

 

  (1) first, to the holders of Partnership Interests that are not entitled to
any preference in distribution or with respect to which distributions are not
limited to any preference in distribution, in proportion to, and to the extent
that, their share of the Net Income previously allocated pursuant to
Section 6.1.A(7) 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 Loss 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 Loss 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
Loss 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 Loss 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 unless and to
the extent provided otherwise in an agreement between any Partner and 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.

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.

 

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ARTICLE VII

MANAGEMENT AND OPERATIONS OF BUSINESS

Section 7.1 Management

A. Powers of General Partner. Except as otherwise expressly provided in this
Agreement, all management powers over the business and affairs of the
Partnership are and shall be exclusively vested in the General Partner, and no
Limited Partner shall have any right to participate in or exercise control or
management power over the business and affairs of the Partnership. The General
Partner may not be removed by the Limited Partners with or without cause. In
addition to the powers now or hereafter granted a general partner of a limited
partnership under applicable law or which are granted to the General Partner
under any other provision of this Agreement, the General Partner 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 chooses to attempt to qualify as a REIT)
to avoid the payment of any U.S. federal income tax (including, for this
purpose, any excise tax pursuant to Section 4981 of the Code) and to make
distributions to its shareholders sufficient to permit the 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, consolidation,
reorganization 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;

 

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  (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, its Subsidiaries, the Partnership’s
Subsidiaries and any of their Affiliates) and the repayment of obligations of
the Partnership and its Subsidiaries and any other Person in which the
Partnership has an equity investment and the making of capital contributions to,
and equity investments in, 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, including waivers of conflicts of interest
and the payment of their expenses and compensation out of the Partnership’s
assets;

 

  (12) the maintenance of such insurance (including, without limitation,
directors, trustees and officers insurance) for the benefit of the Partnership
and the Partners (including, without limitation, the General Partner Entity) and
the directors, trustees and officers thereof as the General Partner deems
necessary or appropriate;

 

25

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  (13) the formation of, or acquisition of an interest (including non-voting
interests in entities controlled by Affiliates of the Partnership or the General
Partner or third parties) in, and the contribution of property to, any further
limited or general partnerships, joint ventures, limited liability companies,
corporations or other relationships that it deems desirable (including, without
limitation, the acquisition of interests in, and the contributions of funds or
property to, or making of loans to, its Subsidiaries and any other Person in
which it has an equity investment from time to time, or the incurrence of
indebtedness on behalf of such Persons or the guarantee of the obligations of
such Persons); provided, however, that as long as the General Partner Entity has
determined to attempt 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 or any Subsidiary 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 or any Subsidiary of the Partnership, the
commencement or defense of suits, legal proceedings, administrative proceedings,
arbitrations or other forms of dispute resolution, the representation of the
Partnership or any Subsidiary 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 or any
Subsidiary of 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 and transfer of
Partnership Units, the admission of any Additional Limited Partner or any
Substituted Limited Partner or otherwise;

 

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

 

  (25) the issuance of additional Partnership Units, as appropriate and in the
General Partner’s sole and absolute discretion, in connection with capital
contributions by Additional Limited Partners and additional capital
contributions by Partners pursuant to Article IV hereof;

 

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

 

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

 

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

 

27

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

 

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

B. No Approval by Limited Partners. 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 fullest extent permitted under the Act or other applicable law, rule or
regulation. 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 collective benefit of the Partnership, the
Limited Partners and the shareholders of the General Partner or the General
Partner Entity.

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 and
(ii) liability insurance for the Indemnitees hereunder, and (iii) such other
insurance as the General Partner, in its sole and absolute discretion,
determines to be necessary.

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

Section 7.2 Certificate of Limited Partnership

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

 

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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 Section 10.3.C and the provisions of Articles V and VI
regarding distributions, payments and allocations to which it may be entitled),
the General Partner shall not be compensated for its services as the general
partner of the Partnership.

B. Responsibility for Partnership, 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 General Partner shall be reimbursed on a monthly basis, or such
other basis as the General Partner may determine in its sole and absolute
discretion, for all expenses it incurs relating to or resulting from the
ownership and operation of, or for the benefit of, the Partnership (including,
without limitation, (i) expenses relating to the ownership of interests in and
operation of the Partnership, (ii) compensation of the officers and employees
including, without limitation, payments under any stock option or incentive plan
that provides for stock units, or other phantom stock, pursuant to which
employees will receive payments based upon dividends on or the value of Shares,
(iii) auditing expenses, (iv) director fees and expenses of the General Partner
Entity, (v) all costs and expenses of being a public company, including costs of
filings with the Securities and Exchange Commission, reports and other
distributions to its shareholders, and (vi) all costs and expenses associated
with litigation involving the General Partner and the General Partner Entity,
the Partnership or any Subsidiary); provided, however, that (i) the amount of
any such

 

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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) if the General Partner or General
Partner Entity qualifies as a REIT, the Partnership shall not be responsible for
any taxes that the 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 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. Repurchases of Shares. If the General Partner Entity exercises its rights
under its organizational documents to purchase Shares or otherwise elects or is
required to purchase from its shareholders Shares in connection with a share
repurchase or similar program or otherwise, or for the purpose of delivering
such Shares to satisfy an obligation under any dividend reinvestment or equity
purchase program adopted by the 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

 

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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. 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 Section 7.5.B 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), (a) 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, (b) 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
(c) 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 form (i.e., where the Parent Entity holds substantially all of its
assets and conducts substantially all of its operations through a partnership,
limited liability company or other entity (referred to as an “Operating
Entity”)) (“UPREIT”) and the General Partner Entity

 

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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
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 Entity 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 Consent of the Outside Limited Partners, the assets
of the General Partner Entity shall be limited to the following:

(1) Partnership Interests and permitted debt obligations of the Partnership (as
contemplated by Section 7.5.F);

(2) 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);

(3) interests, rights, options, warrants or convertible or exchangeable
securities of the Partnership;

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

(5) 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;

(6) 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;

 

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(7) equity or debt securities of Kerrow Holdings, LLC and Kerrow Restaurants,
LLC;

(8) 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; and

(9) equity interests in Qualified REIT Subsidiaries and limited liability
companies (or other entities disregarded from their sole owner for U.S. federal
income tax purposes, including wholly owned grantor trusts) whose assets consist
solely of the assets described in clauses (1) through (8) above (the assets
described in clauses (1) through (9) of this Section 7.5.A, the “Qualified
Assets”).

B. Repurchase of Shares and Other Securities. If the General Partner Entity
exercises its rights under its organizational documents to purchase Shares or
otherwise elects to purchase from the holders thereof Shares, other equity
securities of the General Partner Entity, New Securities or Convertible Funding
Debt, then the General Partner Entity shall cause the Partnership to purchase
from the General Partner Entity (a) 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 (b) 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. Equity Incentive Plan. If, at any time or from time to time, the General
Partner Entity sells or otherwise issues Shares pursuant to any Equity Incentive
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 and the Partnership shall issue to the General Partner
Entity an amount of additional Partnership Units equal to the number of Shares
so sold or issued divided by the Conversion Factor. If the Partnership or the
General Partner Entity acquires Shares as a result of the forfeiture of such
Shares under any Equity Incentive 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.

D. Issuances of Shares and Other Securities. So long as the common shares of the
General Partner Entity are Publicly Traded, 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

 

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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. Funding Debt. The General Partner or the General Partner Entity or any wholly
owned Subsidiary of either of them may incur a Funding Debt, including, without
limitation, a Funding Debt that is convertible into Shares or otherwise
constitutes a class of New Securities (“Convertible Funding Debt”), subject to
the condition that the 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, if the General Partner Entity attempts to qualify as a REIT, 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.

F. Capital Contributions of the General Partner. The Capital Contributions by
the General Partner pursuant to Sections 7.5.C and 7.5.D will be deemed to equal
the cash contributed by the General Partner plus, (i) 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 (ii) in the case of Partnership Units issued pursuant to
Section 7.5.C, an amount equal to the difference between the Value of the Shares
sold pursuant to the Equity Incentive Plan and the net proceeds of such sale.

 

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G. 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.

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 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. To the fullest extent permitted by law, the Partnership shall
indemnify each Indemnitee from and against any and all losses, claims, damages,
liabilities, joint or several, expenses (including, without limitation,
attorneys’ fees and other legal fees and expenses), judgments, fines,
settlements and other amounts, arising from or in connection with any and all
claims, demands, subpoenas, requests for information, formal or informal
investigations, actions, suits or proceedings, whether civil, criminal,
administrative or investigative, incurred by the Indemnitee and relating to the
Partnership, the General Partner or the General Partner Entity or the direct or
indirect operation of, or the direct or indirect 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

 

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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. To the fullest extent permitted by law, reasonable
expenses expected to be incurred by an Indemnitee shall be paid or reimbursed by
the Partnership in advance of the final disposition of any and all claims,
demands, actions, suits or proceedings, civil, criminal, administrative or
investigative made or threatened against an Indemnitee upon receipt by the
Partnership of (i) a written affirmation by the Indemnitee of the Indemnitee’s
good faith belief that the standard of conduct necessary for indemnification by
the Partnership as authorized in this Section 7.7 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.

 

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

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

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

Section 7.8 Liability of the General Partner

A. General. Notwithstanding anything to the contrary set forth in this
Agreement, to the fullest extent permitted by law, 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 or accountable for monetary
or other damages or otherwise 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. Tax Consequences of General Partner Entity and Limited Partners. 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. In
addition, in exercising its authority under this Agreement with respect to other
matters, the General Partner may, but shall be under no obligation to, take into
account the tax consequences to any Partner (including the General Partner
Entity) of any action taken (or not taken) by the General Partner. No decision
or action (or failure to act) contemplated by the preceding sentence shall
constitute a breach of any duty owed to the Partnership or the Limited Partners
by law or equity, fiduciary or otherwise. The General Partner and the
Partnership shall not have liability to any Limited Partner for monetary or
other damages or otherwise for losses sustained, liabilities incurred or
benefits not derived by such Limited Partner in connection with any taking or
omission to take any such actions by the General Partner 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.

 

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C. No Obligation to Consider Separate Interests of Limited Partners or
Shareholders. The Limited Partners expressly acknowledge that the General
Partner is acting on behalf of the Partnership, its equityholders (and, to the
extent separate, the equityholders of the General Partner Entity), and the
equityholders of the Limited Partners, collectively, and that, except as
otherwise set forth herein, the General Partner is under no obligation to
consider or give priority to 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. Any decisions or actions taken or not taken in accordance
with the terms of this Agreement shall not constitute a breach of any duty owed
to the Partnership or the Limited Partners by law or equity, fiduciary or
otherwise. The General Partner and the Partnership shall not have liability to
any Limited Partner for monetary or other damages or otherwise for losses
sustained, liabilities incurred or benefits not derived by such Limited Partner
in connection with any taking or omission to take any such actions by the
General Partner 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.

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 liable to the Partnership or any Partner for any misconduct or negligence
on the part of any such agent appointed by the General Partner in good faith.

E. Effect of Amendment. Notwithstanding any other provision contained herein,
any amendment, modification or repeal of this Section 7.9 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
or any other Person bound by this Agreement 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, 7.1.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.

G. Reliance on this Agreement. To the extent that, at law or in equity, the
General Partner in its capacity as a Limited Partner, has duties (including
fiduciary duties) and liabilities relating thereto to the Partnership or the
Limited Partners, the General Partner shall not be liable to the Partnership or
to any other Partner for its good faith reliance on the provisions of this
Agreement. The provisions of this Agreement, to the extent that they restrict or
eliminate the duties and liabilities of the General Partner or any other Person
under the Act or otherwise existing at law or in equity, are agreed by the
Partners to replace such other duties and liabilities of the General Partner.

 

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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, if
the General Partner Entity attempts to qualify as a REIT, 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.

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

 

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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 Loans by Third Parties

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

ARTICLE VIII

RIGHTS AND OBLIGATIONS OF LIMITED PARTNERS

Section 8.1 Limitation of Liability

The Limited Partners, including the General Partner Entity, in its capacity as a
Limited Partner, 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, manager, employee, agent, trustee, Affiliate, member or
shareholder 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,

 

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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, officer, director, manager, employee, agent, trustee, Affiliate,
member, shareholder or Assignee of any Limited Partner. 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 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 business 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 (including such administrative charges as the General Partner may
establish from time to time):

 

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

 

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

 

  (3) 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;

 

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

 

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  (5) 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.

C. Notice of Extraordinary Transaction of the General Partner Entity. Prior to
making any extraordinary distributions of cash or property to its shareholders
or effecting an Extraordinary Transaction, the General Partner Entity shall
provide written notice to the Limited Partners of its intention to effect such
distribution or Extraordinary Transaction at least twenty (20) Business Days (or
such shorter period determined by the General Partner Entity in its sole and
absolute discretion) prior to the record date to determine shareholders eligible
to receive such distribution or to vote upon such Extraordinary Transaction (or,
if no such record date is applicable, at least twenty (20) Business Days (or
such shorter period determined by the General Partner Entity in its sole and
absolute discretion) before consummation of such distribution or Extraordinary
Transaction). 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, to use such information during such period of
confidentiality solely for purposes of determining whether to exercise the
Redemption Right (if applicable) and to execute a confidentiality agreement
provided by the General Partner Entity; 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 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.

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 six
months 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 or a Class B Unit (if other than the General Partner

 

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Entity or any Subsidiary of the General Partner Entity) shall have the right
(the “Redemption Right”) to require the Partnership to redeem such Partnership
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
Entity) by the holder of the Partnership Units who is exercising the Redemption
Right (the “Redeeming Partner”). A Limited Partner may exercise the Redemption
Right from time to time, without limitation as to frequency, with respect to
part or all of the Partnership Units that it owns, as selected by the Limited
Partner, provided, however, that a Limited Partner may not exercise the
Redemption Right for fewer than one thousand (1,000) Partnership Units of a
particular class unless such Redeeming Partner then holds fewer than one
thousand (1,000) Partnership Units in that class, in which event the Redeeming
Partner must exercise the Redemption Right for all of the Partnership Units held
by such Redeeming Partner in that class, and provided further that, with respect
to a Limited Partner which is an entity, such Limited Partner may exercise the
Redemption Right for fewer than one thousand (1,000) Partnership Units without
regard to whether or not such Limited Partner is exercising the Redemption Right
for all of the Partnership Units held by such Limited Partner as long as such
Limited Partner is exercising the Redemption Right on behalf of one or more of
its equity owners in respect of one hundred percent (100%) of such equity
owners’ interests in such Limited Partner. For purposes hereof, a Class A Unit
issued upon conversion of a Class B Unit shall be deemed to have been issued
when the Class B Unit was issued.

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

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

(iv) Notwithstanding the foregoing, and subject to Section 8.6.B(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 participate in such Extraordinary
Transaction (or if none, ending on the date of consummation of such distribution
or Extraordinary Transaction). If this subparagraph (iv) applies, the Specified
Redemption Date is the date on which the 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.

 

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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 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. Payment of the Redemption Amount in the form of Shares
shall be in Shares duly authorized, validly issued, fully paid and nonassessable
and if applicable, free and clear of any pledge, lien, encumbrance or
restriction, other than those provided in the organizational documents of the
General Partner Entity, the Securities Act, relevant state securities or blue
sky laws and any applicable registration rights agreement with respect to such
Shares entered into by the Redeeming Partner, and shall bear a legend in form
and substance determined by the General Partner Entity. 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 8.6B 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.

(ii) If the General Partner 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

 

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transfer of Shares in the organizational documents of the General Partner
Entity, (iii) 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 Entity’s Shares being owned by fewer
than 100 persons (determined without reference to rules of attribution), (iv)
without limiting the foregoing, result in the General Partner Entity 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 Entity, the
Partnership or a subsidiary of the Partnership 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 Federal, state or
local 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, the General Partner may 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

 

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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 shall be the calendar year.

Section 9.3 Reports

A. Annual Reports. If and to the extent that the General Partner Entity mails
its annual report to its shareholders, as soon as practicable, but in no event
later than the date on such reports are mailed, 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 “Big Four” firm of independent public accountants selected by the
General Partner Entity.

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 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.

C. The General Partner shall have satisfied its obligations under Sections 9.3.A
and 9.3.B by (i) to the extent the General Partner Entity or the Partnership is
subject to periodic reporting requirements under the Exchange Act, filing the
quarterly and annual reports required thereunder within the time periods
provided for the filing of such reports, including any permitted extensions, or
(ii) posting or making available the reports required by this Section 9.3 on the
website maintained from time to time by the Partnership or the General Partner
Entity, provided that such reports are able to be printed or downloaded from
such website.

 

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ARTICLE X

TAX MATTERS

Section 10.1 Preparation of Tax Returns

The General Partner shall arrange for the preparation and timely filing of all
returns of Partnership income, gains, deductions, losses and other items
required of the Partnership for U.S. federal and state income tax purposes and
shall use all reasonable efforts to furnish, within ninety (90) days of the
close of each taxable year, the tax information reasonably required by Limited
Partners for 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. To the extent provided for in Treasury Regulations, revenue rulings, revenue
procedures and/or other IRS guidance issued after the date hereof, the
Partnership is hereby authorized to, and at the direction of the General Partner
shall, elect a safe harbor under which the fair market value of any Partnership
Interests issued in connection with the performance of services after the
effective date of such Treasury Regulations (or other guidance) will be treated
as equal to the liquidation value of such Partnership Interests (i.e., a value
equal to the total amount that would be distributed with respect to such
interests if the Partnership sold all of its assets for their fair market value
immediately after the issuance of such Partnership Interests, satisfied its
liabilities (excluding any non-recourse liabilities to the extent the balance of
such liabilities exceeds the fair market value of the assets that secure them)
and distributed the net proceeds to the Partners under the terms of this
Agreement). In the event that the Partnership makes a safe harbor election as
described in the preceding sentence, each Partner hereby agrees to comply with
all safe harbor requirements with respect to transfers of such Partnership
Interests while the safe harbor election remains effective.

Section 10.3 Tax Partner and Partnership Tax Audit Matters

A. General. The General Partner shall be the “tax partner” of the Partnership
for federal, state and local income tax administrative or judicial proceedings
(such administrative proceedings being referred to as a “tax audit” and such
judicial proceedings being referred to as a “judicial review”) and is treated as
the “tax matters partner” pursuant to Section 6231(a)(7) of the Code as in
effect on November 1, 2015 (Subchapter C of Chapter 63 of the Code as in effect
on November 1, 2015 referred to as the “Current Partnership Audit Rules”) and
the “partnership representative” pursuant to Section 6223(a) of the Code as
included in the Bipartisan Budget Act of 2015 (with the changes to Subchapter C
of Chapter 63 of the Code as made by the Bipartisan Budget Act of 2015 referred
to as the “2015 Budget Act Partnership Audit Rules”). The General Partner is
authorized to conduct all tax audits and judicial reviews for the Partnership.
So long as Section 6223(c)(3) of the Current Partnership Audit Rules is in
effect, upon receipt of notice from the IRS of the beginning of an
administrative proceeding with respect to the Partnership, the tax 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.

 

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

 

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

 

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

 

  (3) to seek judicial review of any adjustment assessed by the IRS or any other
tax authority, including the filing of a petition for readjustment with the Tax
Court or the filing of a complaint for refund with the United States Claims
Court or the District Court of the United States for the district in which the
Partnership’s principal place of business is located;

 

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

 

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

 

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

 

  (7) 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 including, without limitation, the
following acts to the extent that the 2015 Budget Act Partnership Audit Rules
apply to the Company and its current and former Partners:

 

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

 

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

 

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

The taking of any action and the incurring of any expense by the tax partner in
connection with any such audit or proceeding referred to in clause (7) above,
except to the extent required by law, is a matter in the sole and absolute
discretion of the tax partner and the provisions relating to indemnification of
the General Partner set forth in Section 7.8 shall be fully applicable to the
tax partner in its capacity as such. In addition, the General Partner or General
Partner Entity shall be entitled to indemnification set forth in Section 7.8 for
any liability for tax imposed on the Company under the 2015 Budget Act
Partnership Audit Rules that is collected from the General Partner or General
Partner Entity.

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

 

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

 

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

 

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

D. Authorization for Amendment. In addition to the foregoing, and
notwithstanding any other provision of this Agreement, including, without
limitation, Section 14.1 of this Agreement, the General Partner is authorized
(without any requirement of the consent or approval of any other Partners) to
make all such amendments to this Section 10.3 as it shall determine, in its sole
judgment, to be necessary, desirable or appropriate to implement the 2015 Budget
Act Partnership Audit Rules and any regulations, procedures, rulings, notices,
or other administrative interpretations thereof promulgated by the U.S. Treasury
Department.

E. Reimbursement. The tax partner shall receive no compensation for its
services. All third party costs and expenses incurred by the tax 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 partner in discharging its duties hereunder, so long as the compensation
paid by the Partnership for such services is reasonable.

 

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F. Survival. The obligations of each Partner under this Section 10.3 shall
survive such Partner’s withdrawal from the Company, and each Partner agrees to
execute such documentation requested by the Company at the time of such
Partner’s withdrawal from the Company to acknowledge and confirm such Partner’s
continuing obligations under this Section 10.3.

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 withheld with respect to a Limited Partner pursuant
to this Section 10.5 shall be treated as paid or distributed, as applicable, to
such Limited Partner for all purposes under this Agreement to the extent that
the Partnership is contemporaneously making distributions against which such
amount can be offset. Any amount paid on behalf of or with respect to a Limited
Partner, in excess of any such amount of contemporaneous distributions against
which such amount paid can be offset, shall constitute a loan by the Partnership
to such Limited Partner, which loan shall be repaid by such Limited Partner
within fifteen (15) days after notice from the General Partner that such payment
must be made unless (i) the Partnership withholds such payment from a
distribution which would otherwise be made to the Limited Partner or (ii) the
General Partner determines, in its sole and absolute discretion, that such
payment may be satisfied out of the available funds of the Partnership which
would, but for such payment, be distributed to the Limited Partner. Any amounts
withheld pursuant to the foregoing clauses (i) or (ii) shall be treated as
having been distributed or otherwise paid to such Limited Partner. Each Limited
Partner hereby unconditionally and irrevocably grants to the Partnership a
security interest in such Limited Partner’s Partnership Interest to secure such
Limited Partner’s obligation to pay to the Partnership any amounts required to
be paid pursuant to this Section 10.5. 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 applicable law) from the date such
amount is due (i.e., fifteen (15) days after demand) until such amount is paid
in full. Each Limited Partner shall take such actions as the Partnership or the
General Partner shall request to perfect or enforce the security interest
created hereunder.

 

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ARTICLE XI

TRANSFERS AND WITHDRAWALS

Section 11.1 Transfer

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

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

Section 11.2 Transfers and Withdrawals by General Partner and General Partner
Entity

A. General. Neither the General Partner nor the General Partner Entity shall
transfer any of its Partnership Interests, and, if the General Partner Entity is
not the General Partner, the General Partner Entity may not transfer any of its
direct or indirect interests in the General Partner, or withdraw from the
Partnership, except (i) in connection with a transaction permitted under Section
11.2.B, (ii) in connection with any merger (including a triangular merger),
consolidation or other combination with or into another Person following the
consummation of which the equity holders of the surviving entity are
substantially identical to the shareholders of the General Partner Entity, (iii)
with the Consent of the Outside Limited Partners; (iv) to any Person that is, at
the time of such transfer, an Affiliate of the General Partner Entity that is
controlled by the General Partner Entity, including any Qualified REIT
Subsidiary.

B. Extraordinary Transactions. Notwithstanding the restrictions set forth in
Section 11.2.A or any other provision of this Agreement, 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, sale of all or substantially all of its assets or any reclassification,
recapitalization or other change in outstanding Shares (other than a change in
par value, or from par value to no par value, or as a result of a subdivision or
combination as described in the definition of Conversion Factor) (each, an
“Extraordinary Transaction”), unless, in connection with such Extraordinary
Transaction:

 

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all Partners either will receive, or will have the right to receive, for each
Partnership Unit cash, securities or other property in the same form as, and
equal in amount to the product of the Conversion Factor and the greatest amount
of, the cash, securities or other property paid to a holder of Shares, if any,
corresponding to such Partnership Unit in consideration of one such Share at any
time during the period from and after the date on which the Extraordinary
Transaction is consummated; provided, however, that if in connection with the
Extraordinary Transaction, a purchase, tender or exchange offer (a “Tender
Offer”) shall have been made to and accepted by the holders of the percentage
required for the approval of mergers under the organizational documents of the
General Partner Entity, each holder of Partnership Units shall receive, or shall
have the right to receive, the greatest amount of cash, securities, or other
property which such holder would have received had it exercised the Redemption
Right and received Shares in exchange for its 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 of the Partnership other than the General Partner, unless the
successor general partner (i) is a direct or indirect controlled Affiliate of
the General Partner, and (ii) executes and delivers a counterpart to this
Agreement in which such successor general partner agrees to be fully bound by
all of the terms and conditions contained herein that are applicable to the
General Partner.

Section 11.3 Transfers by Limited Partners

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 (other than the General Partner and the General
Partner Entity, in their capacities as Limited Partners) may not transfer any
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 Sections 11.4, 11.5 and 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 Partners, for
the purpose of settling or managing the estate and such power as the
Incapacitated Limited Partner possessed to transfer all or any part of his, her
or 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. Subject to Sections 11.3.D, 11.3.E, 11.4, 11.5 and 11.6,
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

 

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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 Partnership 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 Partnership Interests whether the
Partnership Units relating thereto were acquired on the date hereof or
hereafter), (v) in the case of a Limited Partner which is a partnership, limited
liability company, joint venture, corporation or other business entity other
than any of the foregoing described in clause (iii) or (iv), in accordance with
the terms of any agreement between such Limited Partner and the Partnership
pursuant to which such Partnership Interest was issued, (vi) pursuant to a gift
or other transfer without consideration, (vii) pursuant to applicable laws of
descent or distribution, (viii) to another Limited Partner, and (ix) pursuant to
a grant of security interest or other encumbrance thereof effectuated in a bona
fide pledge transaction with a bona fide financial institution as a result of
the exercise of remedies related thereto, subject to the provisions of Section
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; provided that the General Partner may waive the receipt of any
such opinion as a condition.

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.

 

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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 (including any
transferees permitted by Section 11.3). 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 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 or
advisable, in the sole and absolute discretion of the General Partner, to effect
the admission, each in form and substance reasonably satisfactory to the General
Partner.

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 Loss, 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.

 

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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 and the
transferee of such Partnership Units being admitted to the Partnership as a
Substituted Limited Partner, 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 where such transferee was admitted as a Substituted Limited Partner
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 ten (10) Business Days prior notice to the General Partner, unless the
General Partner otherwise agrees.

D. Allocations. If any Partnership Interest is transferred during any the Fiscal
Year in compliance with the provisions of this Article XI or redeemed or
transferred pursuant to Section 8.6, Net Income, Net Loss, each item thereof and
all other items attributable to such interest for such Fiscal Year shall be
divided and allocated between the transferor 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 Loss, each item thereof and all other
items attributable to such interest for such Fiscal Year shall be prorated based
upon the applicable method selected by the General Partner). Solely for purposes
of making such allocations, at the discretion of the General Partner, 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 contained herein or in any
Equity Incentive Plan, 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

 

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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 cease to be classified as a partnership for U.S.
federal income tax purposes (except as a result of the redemption or exchange
for Shares of all Units held by all Limited Partners other than the General
Partner, or any Subsidiary of either, or pursuant to a transaction expressly
permitted under Section 11.2); (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 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; (ix) if the General Partner Entity attempts
to qualify as a REIT and, 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 and 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 ensure 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.

 

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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 Partner’s sole and absolute discretion. A Person who makes a Capital
Contribution to the Partnership in accordance with this Agreement 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 Loss, 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 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 monthly proration
method, in which event Net Income, Net Loss, and each item thereof would be
prorated based upon the applicable period selected by the General Partner).
Solely for purposes of making such allocations, at the discretion of the General
Partner, 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.

 

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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.

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 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; or

(v) 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 Consent of the
Partners holding more than 50% of the Percentage Interests represented by the
Class A Units 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) Fifth, the balance, if any, to the Partners, in proportion to their
respective positive Capital Account balances, determined 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, other than reimbursement of
its expenses as provided in Section 7.4.

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

 

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

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

B. Restoration of Deficit Capital Accounts Upon Liquidation of the Partnership.
If any Partner has a deficit balance in its Capital Account (after giving effect
to all contributions, distributions and allocations for all taxable years,
including the year during which such liquidation occurs), such Partner shall
have no obligation to make any contribution to the capital of the Partnership
with respect to such deficit, and such deficit shall not be considered a debt
owed to the Partnership or to any other Person for any purpose whatsoever,
except as otherwise set forth in this Section 13.3.B, or as otherwise expressly
agreed in writing by the affected Partner and the Partnership after the date
hereof. Notwithstanding the foregoing, (i) if the General Partner has a deficit
balance in its Capital Account (after giving effect to all contributions,
distributions, and allocations for all Fiscal Years or portions thereof,
including the year during which such liquidation occurs), the General Partner
shall contribute to the capital of the Partnership the amount necessary to
restore such deficit balance to zero in compliance with Regulations
Section 1.704-1(b)(2)(ii)(b)(3); (ii) if a DRO Partner has a deficit balance in
its Capital Account (after giving effect to all contributions, distributions,
and allocations for all Fiscal 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

 

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

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

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

 

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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.

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 7.8.

ARTICLE XIV

AMENDMENT OF PARTNERSHIP

AGREEMENT; MEETINGS

Section 14.1 Amendments

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

 

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(i) any amendment to Section 8.6, its related defined terms or otherwise
affecting the operation of the Conversion Factor or the Redemption Right, except
as permitted pursuant to Section 8.6.E, in each case in a manner that adversely
affects the Limited Partners in any material respects;

(ii) any amendment to Article V, its related defined terms or otherwise
affecting the rights of the Limited Partners to receive the distributions
payable to them hereunder, other than in connection with the creation or
issuance of new or additional Partnership Interests pursuant to Section 4.2 and
except as permitted pursuant to Section 4.2 and Section 5.5, in each case in a
manner that adversely affects the Limited Partners in any material respects;

(iii) any amendment to Article VI, its related defined terms or otherwise that
would materially alter the Partnership’s allocation of Profit and Loss to the
Limited Partners, other than in connection with the creation or issuance of new
or additional Partnership Interests pursuant to Section 4.2 and except as
permitted pursuant to Section 6.2;

(iv) any amendment that would (x) convert a Limited Partner’s interest in the
Partnership into a general partner’s interest, (y) modify the limited liability
of a Limited Partner, or (z) impose on the Limited Partners any obligation to
make additional Capital Contributions to the Partnership, or

(v) any amendment to Section 4.2.A (proviso only), Section 7.5, Section 11.2,
Section 11.3 and this Section 14.1.A, in each case together with their related
defined terms.

B. The General Partner shall notify the Limited Partners in writing of any
amendment or waiver not requiring the Consent of the Outside Limited Partners
made pursuant to Section 14.1.A in the next regular communication to the Limited
Partners or within ninety (90) days of such amendment, whichever is earlier. For
any amendment or waiver requiring the Consent of the Outside Limited Partners
pursuant to Section 14.1.A, the General Partner shall seek the written Consent
of the Partners as set forth in Section 14.2 on such proposed amendments or
waivers or shall call a meeting to vote thereon and to transact any other
business that it may deem appropriate. For purposes of obtaining a written
Consent, the General Partner may require a response within a reasonable
specified time, but not less than seven (7) days, and failure to respond in such
time period shall constitute a vote in favor of the recommendation of the
General Partner. Any such proposed amendment or waiver shall be adopted and be
effective as an amendment or waiver hereto if it is approved by the General
Partner and receives the Consent of the Outside Limited Partners, as applicable,
in accordance with Sections 14.1.A.

C. 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 Outside Limited Partners and without any
notice requirement.

 

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Section 14.2 Meetings of the Partners

A. General. Meetings of the Partners may be called 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 or more than
thirty (30) days prior to the date of such meeting. Partners may vote in person
or by proxy at such meeting. Whenever the vote or Consent of Partners is
permitted or required under this Agreement, such vote or Consent may be given at
a meeting of Partners or may be given in accordance with the procedure
prescribed in Section 14.1.B. Except as otherwise expressly provided in this
Agreement, the Consent of holders of Partnership Interests representing a
majority of the Percentage Interests of the Class A Units shall control
(including Class A Units held by the 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. Votes. On matters on which Limited Partners are entitled to vote, each
Limited Partner shall have the number of votes equal to the number of Class A
Units held.

E. 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 deem appropriate.

F. Record Date. The General Partner may set, in advance, the Partnership Record
Date for the purpose of determining the Partners (i) entitled to Consent to any
action, (ii) entitled to receive notice of or vote at any meeting of the
Partners or (iii) in order to make a determination of Partners for any other
proper purpose. Such date, in any case, (x) shall not be prior to the close of
business on the day the Partnership Record Date is fixed and shall be not more
than ninety (90) days and, in the case of a meeting of the Partners, not less
than ten (10) days, before the date on which the meeting is to be held or
Consent is to be given and (y) shall be, with respect to the determination of
the existence of Partnership Approval, the record date

 

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established by the General Partner for the approval of its shareholders for the
event constituting an Extraordinary Transaction. If no record date is fixed, the
record date for the determination of Partners entitled to notice of or to vote
at a meeting of the Partners shall be at the close of business on the day on
which the notice of the meeting is sent, and the record date for any other
determination of Partners shall be the effective date of such Partner action,
distribution or other event. When a determination of the Partners entitled to
vote at any meeting of the Partners has been made as provided in this section,
such determination shall apply to any adjournment thereof.

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 or when sent by first class United
States mail or by other means of written communication (including, but not
limited to, via e-mail) to the 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 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.

 

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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.

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

 

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  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.

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.

 

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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

If the General Partner Entity attempts to qualify as a REIT, 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 for purposes of
Section 856(c)(2) or 856(c)(3) of the Code (a “General Partner Payment”) then,
notwithstanding any other provision of this Agreement, the amount of such
General Partner 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 (I) of Section 856(c)(2) of
the Code over (b) the amount of gross income (within the meaning of
Section 856(c)(2) of the Code) derived by the 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 Fiscal Years, and if

 

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not paid within such five 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: FOUR CORNERS GP, LLC By:  

/s/ Gerald R. Morgan

       Gerald R. Morgan, President LIMITED PARTNERS: TRUST: FOUR CORNERS
PROPERTY TRUST, INC. By:  

/s/ Gerald R. Morgan

       Gerald R. Morgan, President HOLDINGS: FCPT OP HOLDINGS, LP By:   FCPT
TRS, LLC,   its General Partner           By:  

/s/ Gerald R. Morgan

    Gerald R. Morgan, President

[Signature Page to Amended and Restated

Agreement of Limited Partnership]

 

S-1

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EXHIBIT A

FORM OF PARTNER REGISTRY

 

     CLASS A UNITS  

Name and Address of Partner

   Partnership
Units      Capital
Account Balance (as
of the date hereof)      Percentage
Interest  

GENERAL PARTNER:

Four Corners GP, LLC

591 Redwood Highway, Suite 1150

Mill Valley, California 94941

Attn:

Facsimile:

        

LIMITED PARTNERS:

        

FOUR CORNERS PROPERTY TRUST, INC.

591 Redwood Highway, Suite 1150

Mill Valley, California 94941

Attn:

Facsimile:

        

[NAME]

        

[NAME]

           

 

 

       

 

 

 

TOTAL PARTNERSHIP UNITS

     Class A Units            100.000%   

 

Exhibit A-1

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EXHIBIT B

CAPITAL ACCOUNT MAINTENANCE

1. Capital Accounts of the Partners

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

B. For purposes of computing Net Income, Net Loss or the amount of any item of
income, gain, loss and deduction to be reflected in the 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 Net Income, Net Loss and all items of income, gain, loss and
deduction shall be made without regard to any adjustments to the adjusted bases
of the assets of the Partnership pursuant to Sections 754 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 Net Income, Net Loss and all items of income, gain, loss
and deduction shall be made without regard to the fact that items described in
Sections 705(a)(l)(B) or 705(a)(2)(B) of the Code are not includible in gross
income or are neither currently deductible nor capitalized for federal income
tax purposes.

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

 

Exhibit B-1

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

(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 1 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; (c) immediately prior to the liquidation of the Partnership
within the meaning of Regulations Section 1.704-l(b)(2)(ii)(g); (d) immediately
prior to the grant of an interest in the Partnership (other than a de minimis
interest) as consideration for the provision of services to or for the benefit
of the Partnership by an existing Partner acting in a Partner capacity or by a
new partner acting in a Partner capacity or in anticipation of becoming a
Partner; and (e) at such other times as permitted or required under Regulations;
provided, however, that adjustments pursuant to clauses (a), (b), (d) and (e)
(to the extent not required by Regulations) above shall be made only if the
General Partner determines that such adjustments are necessary or appropriate to
reflect the relative economic interests of the Partners in the Partnership.

(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 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

 

Exhibit B-2

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

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.

 

Exhibit B-3

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EXHIBIT C

SPECIAL ALLOCATION RULES

1. Special Allocation Rules.

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

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

B. Partner Minimum Gain Chargeback. Notwithstanding any other provision of
Section 6.1 of this Agreement or any other provisions of this Exhibit C (except
Section 1.A hereof), if there is a net decrease in Partner Minimum Gain
attributable to 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)(4). 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.

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

 

Exhibit C-1

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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.

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

 

Exhibit C-2

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I. The allocations set forth in clauses (A) through (F) of this Section 1
(“Regulatory Allocations”) are intended to comply with certain regulatory
requirements, including the requirements of Regulations Section 1.704-1(b) and
1.704-2. Notwithstanding the provisions of Section 6.1 of the Agreement, the
Regulatory Allocations shall be taken into account in allocating other items of
income, gain, loss and deduction among the Partners so that, to the extent
possible without violating the requirements giving rise to the Regulatory
Allocations, the net amount of such allocations of other items and the
Regulatory Allocations to each Partner shall be equal to the net amount that
would have been allocated to each such Partner if the Regulatory Allocations had
not been made.

2. Allocations for Tax Purposes

A. Except as otherwise provided in this Section 2, for federal income tax
purposes, each item of income, gain, loss and deduction shall be allocated among
the 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.

 

Exhibit C-3

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

 

Exhibit C-4

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EXHIBIT D

NOTICE OF REDEMPTION

The undersigned hereby irrevocably (i) redeems
                                     Partnership Units in Four Corners Operating
Partnership, L.P. in accordance with the terms of the Amended and Restated
Agreement of Limited Partnership of Four Corners Operating Partnership, 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)     

 

    

 

     (City)                     (State)                     (Zip Code)     
Signature Guaranteed by:     

 

 

Exhibit D-1

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IF SHARES ARE TO BE ISSUED, ISSUE TO:

Name:                                          
                                   

Social Security or tax identifying number:
                                         
                                                                    

 

Exhibit D-2

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EXHIBIT E

FORM OF DRO REGISTRY

 

PART I DRO PARTNERS    DRO AMOUNT PART II DRO PARTNERS   

 

Exhibit E-1