EX-10.2 AGREEMENT OF LIMITED PARTNERSHIP



 







Exhibit 10.2





AGREEMENT OF LIMITED PARTNERSHIP

OF

WELLS TOTAL RETURN OPERATING PARTNERSHIP, L.P.




 









 





AGREEMENT OF LIMITED PARTNERSHIP

OF

WELLS TOTAL RETURN OPERATING PARTNERSHIP, L.P.




RECITALS




     Wells Total Return Operating Partnership, L.P. (the “Partnership”) was formed as a limited
partnership under the laws of the State of Delaware, pursuant to a Certificate of Limited
Partnership filed with the Office of the Secretary of State of the State of Delaware effective as
of March 29, 2007. This Agreement of Limited Partnership (the “Agreement”) is entered into this
18th day of April, 2007 between Wells Total Return REIT, Inc., a Maryland corporation
and the Limited Partners set forth on Exhibit A hereto.



AGREEMENT




     NOW, THEREFORE, in consideration of the foregoing, of mutual covenants between the parties
hereto, and of other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the parties hereto agree as follows:



ARTICLE I

DEFINED TERMS




     The following defined terms used in this Agreement shall have the meanings specified below:



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



     “Additional Funds” has the meaning set forth in Section 4.03 hereof.



     “Additional Securities” means any additional REIT Shares (other than REIT Shares issued in
connection with an exchange pursuant to Section 8.05 hereof) or rights, options, warrants or
convertible or exchangeable securities containing the right to subscribe for or purchase REIT
Shares.



     “Administrative Expenses” means (i) all administrative and operating costs and expenses
incurred by the Partnership, (ii) those administrative costs and expenses of the General Partner,
including any salaries or other payments to directors, officers or employees of the General
Partner, and any accounting and legal expenses of the General Partner, which expenses, the Partners
have agreed, are expenses of the Partnership and not the General Partner, and (iii) to the extent
not included in clause (ii) above, REIT Expenses; provided, however, that Administrative Expenses
shall not include any administrative costs and expenses incurred by the General Partner that are
attributable to Properties or partnership interests in a Subsidiary Partnership that are owned by
the General Partner directly.



 









 





     “Affiliate” means, (i) any Person that, directly or indirectly, controls or is controlled by
or is under common control with such Person, (ii) any other Person that owns, beneficially,
directly or indirectly, 10% or more of the outstanding capital stock, shares or equity interests of
such Person, or (iii) any officer, director, employee, partner or trustee of such Person or any
Person controlling, controlled by or under common control with such Person (excluding trustees and
persons serving in similar capacities who are not otherwise an Affiliate of such Person). For the
purposes of this definition, “control” (including the correlative meanings of the terms “controlled
by” and “under common control with”), as used with respect to any Person, shall mean the
possession, directly or indirectly, of the power to direct or cause the direction of the management
and policies of such Person, through the ownership of voting securities or partnership interests or
otherwise.



     “Agreed Value” means the fair market value of a Partner’s non-cash Capital Contribution as of
the date of contribution as agreed to by such Partner and the General Partner. The names and
addresses of the Partners, number of Partnership Units or Special Partnership Units issued to each
Partner, and the Agreed Value of non-cash Capital Contributions as of the date of contribution is
set forth on Exhibit A.



     “Agreement” means this Agreement of Limited Partnership.



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



     “Asset Manager” means Wells Fund Management, Inc., a Georgia corporation.



     “Capital Account” has the meaning provided in Section 4.04 hereof.



     “Capital Contribution” means the total amount of cash and the Agreed Value of any Property or
other asset contributed or agreed to be contributed, as the context requires, to the Partnership by
each Partner pursuant to the terms of the Agreement. Any reference to the Capital Contribution of
a Partner shall include the Capital Contribution made by a predecessor holder of the Partnership
Interest of such Partner.



     “Cash Amount” means an amount of cash per Partnership Unit equal to the product of the REIT
Shares Amount multiplied by the then current price per REIT Share set forth in the applicable
Prospectus as of the date of any Notice of Redemption delivered by any Limited Partner to the
General Partner.



     “Certificate” means any instrument or document that is required under the laws of the State of
Delaware, or any other jurisdiction in which the Partnership conducts business, to be signed and
sworn to by the Partners of the Partnership (either by themselves or pursuant to the
power-of-attorney granted to the General Partner in Section 8.02 hereof) and filed for recording in
the appropriate public offices within the State of Delaware or such other jurisdiction to perfect
or maintain the Partnership as a limited partnership, to effect the admission, withdrawal, or
substitution of any Partner of the



 









 







Partnership, or to protect the limited liability of the Limited Partners as limited partners under
the laws of the State of Delaware or such other jurisdiction.



     “Code” means the Internal Revenue Code of 1986, as amended, and as hereafter amended from time
to time. Reference to any particular provision of the Code shall mean that provision in the Code
at the date hereof and any successor provision of the Code.



     “Commission” means the U.S. Securities and Exchange Commission.



     “Conversion Factor” means 1.0, provided that in the event that the General Partner (i)
declares or pays a dividend on its outstanding REIT Shares in REIT Shares or makes a distribution
to all holders of its outstanding REIT Shares in REIT Shares, (ii) subdivides its outstanding REIT
Shares, or (iii) combines its outstanding REIT Shares into a smaller number of REIT Shares, the
Conversion Factor shall be adjusted by multiplying the Conversion Factor by a fraction, the
numerator of which shall be the number of REIT Shares issued and outstanding on the record date for
such dividend, distribution, subdivision or combination (assuming for such purposes that such
dividend, distribution, subdivision or combination has occurred as of such time), and the
denominator of which shall be the actual number of REIT Shares (determined without the above
assumption) issued and outstanding on such date and, provided further, that in the event that an
entity other than an Affiliate of the General Partner shall become General Partner pursuant to any
merger, consolidation or combination of the General Partner with or into another entity (the
“Successor Entity”), the Conversion Factor shall be adjusted by multiplying the Conversion Factor
by the number of shares of the Successor Entity into which one REIT Share is converted pursuant to
such merger, consolidation or combination, determined as of the date of such merger, consolidation
or combination. Any adjustment to the Conversion Factor shall become effective immediately after
the effective date of such event retroactive to the record date, if any, for such event; provided,
however, that if the General Partner receives a Notice of Redemption after the record date, but
prior to the effective date of such dividend, distribution, subdivision or combination, the
Conversion Factor shall be determined as if the General Partner had received the Notice of
Redemption immediately prior to the record date for such dividend, distribution, subdivision or
combination.



     “Event of Bankruptcy” as to any Person means the filing of a petition for relief as to such
Person as debtor or bankrupt under the Bankruptcy Code of 1978 or similar provision of law of any
jurisdiction (except if such petition is contested by such Person and has been dismissed within 90
days); insolvency or bankruptcy of such Person as finally determined by a court proceeding; filing
by such Person of a petition or application to accomplish the same or for the appointment of a
receiver or a trustee for such Person or a substantial part of his assets; commencement of any
proceedings relating to such Person as a debt or under any other reorganization, arrangement,
insolvency, adjustment of debt or liquidation law of any jurisdiction, whether now in existence or
hereinafter in effect, either by such Person or by another, provided that if such proceeding is
commenced by another, such Person indicates his approval of such proceeding, consents thereto or
acquiesces therein, or such proceeding is contested by such Person and has not been finally
dismissed within 90 days.



 









 





     “General Partner” means Wells Total Return REIT, Inc. a Maryland corporation, and any Person
that becomes a substitute or additional General Partner as provided herein, and any of their
successors as General Partner.



     “General Partnership Interest” means a Partnership Interest held by the General Partner that
is a general partnership interest.



     “Indemnitee” means (i) the General Partner or a director, officer or employee of the General
Partner or Partnership, (ii) the Asset Manager or a director, officer or employee of the Asset
Manager or another agent of the Asset Manager if such agent is an Affiliate of the Asset Manager,
and (iii) such other Persons (including Affiliates of the General Partner, the Asset Manager or the
Partnership) as the General Partner may designate from time to time, in its sole and absolute
discretion.



     “Independent Director” means a director of the General Partner who is not an officer or
employee of the General Partner, any Affiliate of an officer or employee or any Affiliate of (i)
any lessee of any property of the General Partner or any Subsidiary of the General Partner, (ii)
any Subsidiary of the General Partner, or (iii) any partnership that is an Affiliate of the General
Partner.



     “Limited Partner” means any Person named as a Limited Partner on Exhibit A attached
hereto, and any Person who becomes a Substitute or Additional Limited Partner, in such Person’s
capacity as a Limited Partner in the Partnership.



     “Limited Partnership Interest” means the ownership interest of a Limited Partner in the
Partnership at any particular time, including the right of such Limited Partner to any and all
benefits to which such Limited Partner may be entitled as provided in this Agreement and in the
Act, together with the obligations of such Limited Partner to comply with all the provisions of
this Agreement and of such Act.



     “Liquidity Event” means the sale of all or substantially all of the assets of the Partnership
and the General Partner or the merger of the Partnership or the General Partner with any Person
other than an Affiliate thereof or an Affiliate of the Advisor.



     “Listing” means the listing of the common stock of the Partnership or the General Partner on a
national securities exchange or automated quotation system.



     “Loss” has the meaning provided in Section 5.01(f) hereof.



     “Notice of Redemption” means the Notice of Exercise of Redemption Right substantially in the
form attached as Exhibit B hereto.



     “NYSE” means the New York Stock Exchange.



     “Offer” has the meaning set forth in Section 7.01(c) hereof.



 









 





     “Offering” means the initial offer and sale by the General Partner and the purchase by the
Distributor (as defined in the Prospectus) of REIT Shares for sale to the public.



     “OP Unitholders” means all holders of Partnership Interests other than Special OP Unitholders
who do not own Partnership Units in addition to their Special Partnership Units.



     “Partner” means any General Partner or Limited Partner.



     “Partner Nonrecourse Debt Minimum Gain” has the meaning set forth in Regulations Section
1.704-2(i). A Partner’s share of Partner Nonrecourse Debt Minimum Gain shall be determined in
accordance with Regulations Section 1.704-2(i)(5).



     “Partnership” means Wells Total Return Operating Partnership, L.P., a Delaware limited
partnership.



     “Partnership Interest” means an ownership interest in the Partnership held by either a Limited
Partner or the General Partner and includes any and all benefits to which the holder of such a
Partnership Interest may be entitled as provided in this Agreement, together with all obligations
of such Person to comply with the terms and provisions of this Agreement.



     “Partnership Minimum Gain” is determined in accordance with Regulations Section 1.704-2(d). A
Partner’s share of Partnership Minimum Gain shall be determined in accordance with Regulations
Section 1.704-2(g)(1).



     “Partnership Record Date” means the record date established by the General Partner for the
distribution of cash pursuant to Section 5.02 hereof, which record date shall be the same as the
record date established by the General Partner for a distribution to its shareholders of some or
all of its portion of such distribution.



     “Partnership Unit” means a fractional, undivided share of the Partnership Interests of all
Partners issued hereunder excluding the Partnership Interest represented by Special Partnership
Units. The allocation of Partnership Units among the Partners shall be as set forth on Exhibit
A, as may be amended from time to time.



     “Percentage Interest” means the percentage ownership interest in the Partnership of each
Partner, as determined by dividing the Partnership Units owned by a Partner by the total number of
Partnership Units then outstanding. The Percentage Interest of each Partner shall be as set forth
on Exhibit A, as may be amended from time to time.



     “Person” means any individual, partnership, corporation, joint venture, trust or other entity.



     “Profit” has the meaning provided in Section 5.01(f) hereof.



 









 





     “Property” means any office or industrial property or other investment in which the
Partnership holds an ownership interest.



     “Prospectus” means the final prospectus delivered to purchasers of REIT Shares in the
Offering, and includes the amendment to the Prospectus to be filed by the General Partner on each
business day reflecting the then current price per REIT Share.



     “Redemption Amount” means either the Cash Amount or the REIT Shares Amount, as selected by the
General Partner in its sole and absolute discretion pursuant to Section 8.05(b) hereof.



     “Redemption Right” has the meaning provided in Section 8.05(a) hereof.



     “Redeeming Partner” has the meaning provided in Section 8.05(a) hereof.



     “Regulations” means the federal income tax regulations issued under the Code, as amended and
as hereafter amended from time to time. Reference to any particular provision of the Regulations
shall mean that provision of the Regulations on the date hereof and any successor provision of the
Regulations.



     “REIT” means a real estate investment trust as defined in Sections 856 through 860 of the
Code.



     “REIT Expenses” means (i) costs and expenses relating to the formation and continuity of
existence and operation of the General Partner and any Subsidiaries thereof (which Subsidiaries
shall, for purposes hereof, be included within the definition of General Partner), including taxes,
fees and assessments associated therewith, any and all costs, expenses or fees payable to any
director, officer, or employee of the General Partner, (ii) costs and expenses relating to any
public offering and registration of securities by the General Partner and all statements, reports,
fees and expenses incidental thereto, including, without limitation, underwriting discounts,
selling commissions or distribution charges applicable to any such offering of securities, and any
costs and expenses associated with any claims made by any holders of such securities or any
underwriters, placement agents, distributors or selling dealers thereof, (iii) costs and expenses
associated with any redemption of any securities by the General Partner, (iv) costs and expenses
associated with the preparation and filing of any periodic or other reports and communications by
the General Partner under federal, state or local laws or regulations, including filings with the
Commission, (v) costs and expenses associated with compliance by the General Partner with laws,
rules and regulations promulgated by any regulatory body, including the Commission and any
securities exchange, (vi) costs and expenses associated with any 401(k) plan, incentive plan, bonus
plan or other plan providing for compensation for the employees of the General Partner, (vii) costs
and expenses incurred by the General Partner relating to any issuing or redemption of Partnership
Interests, and (viii) all other operating or administrative costs or expenses of the General
Partner incurred in the ordinary course of its business on behalf of or in connection with the
Partnership.



 









 





     “REIT Share” means a share of common stock, par value $0.01 per share, in the General Partner
(or successor entity, as the case may be).



     “REIT Shares Amount” means a number of REIT Shares equal to the product of the number of
Partnership Units offered for redemption by a Redeeming Partner, multiplied by the Conversion
Factor as adjusted to and including the Specified Redemption Date; provided that in the event the
General Partner issues to all holders of REIT Shares rights, options, warrants or convertible or
exchangeable securities entitling the shareholders to subscribe for or purchase REIT Shares, or any
other securities or property (collectively, the “rights”), and the rights have not expired at the
Specified Redemption Date, then the REIT Shares Amount shall also include the rights issuable to a
holder of the REIT Shares Amount of REIT Shares on the record date fixed for purposes of
determining the holders of REIT Shares entitled to rights.



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



     “Service” means the Internal Revenue Service.



     “Special OP Unitholders” means the holders of the Special Partnership Units.



     “Special Partnership Interest” means the percentage ownership interest in the Partnership of
each Special OP Unitholder, as determined by dividing the Special Partnership Units owned by each
Special OP Unitholder by the total number of Special Partnership Units then outstanding. The
Special Percentage Interest of each Partner shall be as set forth on Exhibit A, as such Exhibit may
be amended from time to time.



     “Special Partnership Unit” means a unit of a series of Limited Partnership Interests,
designated as Special Partnership Units, issued pursuant to Section 4.02. The number of Special
Partnership Units outstanding and the Special Percentage Interests in the Partnership represented
by such Special Partnership Units are set forth on Exhibit A, as such Exhibit may be amended from
time to time.



     “Specified Redemption Date” has the meaning provided in Section 8.05(a).



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



     “Subsidiary Partnership” means any partnership of which the partnership interests therein are
owned by the General Partner or a wholly-owned subsidiary of the General Partner.



     “Substitute Limited Partner” means any Person admitted to the Partnership as a Limited Partner
pursuant to Section 9.03 hereof.



     “Successor Entity” has the meaning provided in the definition of “Conversion Factor” contained
herein.



 









 





     “Surviving General Partner” has the meaning set forth in Section 7.01(d) hereof.



     “Termination Event” means the termination of the Advisory Agreement other than for “cause” (as
defined in the Advisory Agreement).



     “Transaction” has the meaning set forth in Section 7.01(c) hereof.



     “Transfer” has the meaning set forth in Section 9.02(a) hereof.



     “Value” means, with respect to any security, the average of the daily market price of such
security for the ten consecutive trading days immediately preceding the date of such valuation.
The market price for each such trading day shall be: (i) if security is listed or admitted to
trading on any securities exchange or the NYSE, the sale 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, regular way, on
such day, (ii) if security is not listed or admitted to trading on any securities exchange or the
NYSE, the last reported sale price on such day or, if no sale takes place on such day, the average
of the closing bid and asked prices on such day, as reported by a reliable quotation source
designated by the General Partner, or (iii) if security is not listed or admitted to trading on any
securities exchange or the NYSE and no such last reported sale price or closing bid and asked
prices are available, the average of the reported high bid and low asked prices on such day, as
reported by a reliable quotation source designated by the General Partner, or if there shall be no
bid and asked prices on such day, the average of the high bid and low asked prices, as so reported,
on the most recent day (not more than ten days prior to the date in question)for which prices have
been so reported; provided that if there are no bid and asked prices reported during the ten days
prior to the date in question, the value of the security shall be determined by the General Partner
acting in good faith on the basis of such quotations and other information as it considers, in its
reasonable judgment, appropriate. In the event the security includes any additional rights, 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.



ARTICLE II

PARTNERSHIP FORMATION AND IDENTIFICATION




     2.01 Formation. The Partners hereby agree to form the Partnership pursuant to the Act
and upon the terms and conditions set forth in this Agreement.



     2.02 Name, Office and Registered Agent. The name of the Partnership is Wells Total
Return Operating Partnership, L.P. The specified office and place of business of the Partnership
shall be 6200 The Corners Parkway, Suite 250, Norcross, Georgia 30092. The General Partner may at
any time change the location of such office, provided the General Partner gives notice to the
Partners of any such change. The name and address of the Partnership’s registered agent is The
Corporation Trust Company, Corporation Trust Center, 1209 Orange Street, Wilmington, New Castle
County, Delaware 19801.



 









 




The sole duty of the registered agent as such is to forward to the Partnership any notice that is
served on him as registered agent.




     2.03 Partners.



     (a) The General Partner of the Partnership is Wells Total Return REIT, Inc., a Maryland
corporation. Its principal place of business is the same as that of the Partnership.



     (b) The Limited Partners are those Persons identified as Limited Partners on Exhibit A
hereto, as amended from time to time.



     2.04 Term and Dissolution.



     (a) The Partnership shall have perpetual duration, except that the Partnership shall be
dissolved upon the first to occur of any of the following events:




     (i) The occurrence of an Event of Bankruptcy as to a General Partner or the
dissolution, death, removal or withdrawal of a General Partner unless the business of the
Partnership is continued pursuant to Section 7.03(b) hereof; provided that if a General
Partner is on the date of such occurrence a partnership, the dissolution of such General
Partner as a result of the dissolution, death, withdrawal, removal or Event of Bankruptcy
of a partner in such partnership shall not be an event of dissolution of the Partnership if
the business of such General Partner is continued by the remaining partner or partners,
either alone or with additional partners, and such General Partner and such partners comply
with any other applicable requirements of this Agreement;




     (ii) The passage of 90 days after the sale or other disposition of all or
substantially all of the assets of the Partnership (provided that if the Partnership
receives an installment obligation as consideration for such sale or other disposition, the
Partnership shall continue, unless sooner dissolved under the provisions of this Agreement,
until such time as such note or notes are paid in full); or




     (iii) The election by the General Partner that the Partnership should be dissolved.



     (b) Upon dissolution of the Partnership (unless the business of the Partnership is continued
pursuant to Section 7.03(b) hereof), the General Partner (or its trustee, receiver, successor or
legal representative) shall amend or cancel the Certificate and liquidate the Partnership’s assets
and apply and distribute the proceeds thereof in accordance with Section 5.06 hereof.
Notwithstanding the foregoing, the liquidating General Partner may either (i) defer liquidation of,
or withhold from distribution for a reasonable time, any assets of the Partnership (including those
necessary to satisfy the Partnership’s debts and obligations) or (ii) distribute the assets to the
Partners in kind.



 









 





     2.05 Filing of Certificate and Perfection of Limited Partnership. The General Partner
shall execute, acknowledge, record and file at the expense of the Partnership, the Certificate and
any and all amendments thereto and all requisite fictitious name statements and notices in such
places and jurisdictions as may be necessary to cause the Partnership to be treated as a limited
partnership under, and otherwise to comply with, the laws of each state or other jurisdiction in
which the Partnership conducts business.



     2.06 Certificates Describing Partnership Units. At the request of a Limited Partner,
the General Partner, at its option, may issue a certificate summarizing the terms of such Limited
Partner’s interest in the Partnership, including the number of Partnership Units and Special
Partnership Units owned and the Percentage Interest and the Special Partnership Interest
represented by such Partnership Units and Special Partnership Units as of the date of such
certificate. Any such certificate (i) shall be in form and substance as approved by the General
Partner, (ii) shall not be negotiable and (iii) shall bear a legend to the following effect:



     This certificate is not negotiable. The Partnership Units and the Special Partnership Units
represented by this certificate are governed by and transferable only in accordance with the
provisions of the Agreement of Limited Partnership of Wells Total Return Operating Partnership,
L.P., as amended from time to time.



ARTICLE III

BUSINESS OF THE PARTNERSHIP




     The purpose and nature of the business to be conducted by the Partnership is (i) to conduct
any business that may be lawfully conducted by a limited partnership organized pursuant to the Act,
provided, however, that such business shall be limited to and conducted in such a manner as to
permit the General Partner at all times to qualify as a REIT, unless the General Partner otherwise
ceases to qualify as a REIT, (ii) to enter into any partnership, joint venture or other similar
arrangement to engage in the foregoing or the ownership of interests in any entity engaged in the
foregoing and (iii) to do anything necessary or incidental to the foregoing. In connection with
the foregoing, and without limiting the General Partner’s right in its sole and absolute discretion
to cease qualifying as a REIT, the Partners acknowledge that the General Partner’s current status
as a REIT and the avoidance of income and excise taxes on the General Partner inures to the benefit
of all the Partners and not solely to the General Partner. Notwithstanding the foregoing, the
Limited Partners agree that the General Partner may terminate its status as a REIT under the Code
at any time to the full extent permitted under the Articles of Incorporation. The General Partner
shall also be empowered to do any and all acts and things necessary or prudent to ensure that the
Partnership will not be classified as a “publicly traded partnership” for purposes of Section 7704
of the Code.



 









 





ARTICLE IV

CAPITAL CONTRIBUTIONS AND ACCOUNTS




     4.01 Capital Contributions. The General Partner and the Limited Partner have made
capital contributions to the Partnership in exchange for the Partnership Interests set forth
opposite their names on Exhibit A, as amended from time to time.



     4.02 Additional Capital Contributions and Issuance of Additional Partnership
Interests. Except as provided in this Section 4.02 or in Section 4.03, the Partners shall have
no right or obligation to make any additional Capital Contributions or loans to the Partnership.
The General Partner may contribute additional capital to the Partnership, from time to time, and
receive additional Partnership Interests in respect thereof, in the manner contemplated in this
Section 4.02.



(a) Issuances of Additional Partnership Interests.





     (i) General. The General Partner is hereby authorized to cause the
Partnership to issue such additional Partnership Interests in the form of Partnership Units
for any Partnership purpose at any time or from time to time, to the Partners (including
the General Partner) or to other Persons for such consideration and on such terms and
conditions as shall be established by the General Partner in its sole and absolute
discretion, all without the approval of any Limited Partners. Any additional Partnership
Interests issued thereby may be issued in one or more classes, or one or more series of any
of such classes, with such designations, preferences and relative, participating, optional
or other special rights, powers and duties, including rights, powers and duties senior to
Limited Partnership Interests, all as shall be determined by the General Partner in its
sole and absolute discretion and without the approval of any Limited Partner, subject to
Delaware law, including, without limitation, (i) the allocations of items of Partnership
income, gain, loss, deduction and credit to each such class or series of Partnership
Interests; (ii) the right of each such class or series of Partnership Interests to share in
Partnership distributions; and (iii) the rights of each such class or series of Partnership
Interests upon dissolution and liquidation of the Partnership; provided, however, that no
additional Partnership Interests shall be issued to the General Partner unless:




(1)(A) the additional Partnership Interests are issued in connection with an
issuance of REIT Shares or other interests in the General Partner, which shares or
interests have designations, preferences and other rights, all such that the
economic interests are substantially similar to the designations, preferences and
other rights of the additional Partnership Interests issued to the General Partner
by the Partnership in accordance with this Section 4.02 and (B) the General Partner
shall make a Capital Contribution to the Partnership in an amount equal to the
proceeds raised in connection with the issuance of such shares of stock of or other
interests in the General Partner;



 









 






(2) the additional Partnership Interests are issued in exchange for property owned
by the General Partner with a fair market value, as determined by the General
Partner, in good faith, equal to the value of the Partnership Interests; or




(3) the additional Partnership Interests are issued to all Partners in proportion
to their respective Percentage Interests.



     In addition, the General Partner may acquire Partnership Interests from other Partners
pursuant to this Agreement. In the event that the Partnership issues Partnership Interests
pursuant to this Section 4.02(a), the General Partner shall make such revisions to this Agreement
(without any requirement of receiving approval of the Limited Partners) as it deems necessary to
reflect the issuance of such additional Partnership Interests and any special rights, powers, and
duties associated therewith.



     Without limiting the foregoing, the General Partner is expressly authorized to cause the
Partnership to issue Partnership Units for less than fair market value, so long as the General
Partner concludes in good faith that such issuance is in the best interests of the General Partner
and the Partnership.




     (ii) Upon Issuance of Additional Securities. The General Partner shall not
issue any additional REIT Shares (other than REIT Shares issued in connection with a
redemption pursuant to Section 8.05 hereof) or rights, options, warrants or convertible or
exchangeable securities containing the right to subscribe for or purchase REIT Shares
(collectively, “Additional Securities”) other than to all holders of REIT Shares, unless
(A) the General Partner shall cause the Partnership to issue to the General Partner, as the
General Partner may designate, Partnership Interests or rights, options, warrants or
convertible or exchangeable securities of the Partnership having designations, preferences
and other rights, all such that the economic interests are substantially similar to those
of the Additional Securities, and (B) the General Partner contributes the net proceeds from
the issuance of such Additional Securities and from any exercise of rights contained in
such Additional Securities, directly and through the General Partner, to the Partnership;
provided, however, that the General Partner is allowed to issue Additional Securities in
connection with an acquisition of a property to be held directly by the General Partner.
Without limiting the foregoing, the General Partner is expressly authorized to issue
Additional Securities for less than fair market value, and to cause the Partnership to
issue to the General Partner corresponding Partnership Interests, so long as (x) the
General Partner concludes in good faith that such issuance is in the best interests of the
General Partner and the Partnership, including without limitation, the issuance of REIT
Shares and corresponding Partnership Units pursuant to an employee share purchase plan
providing for employee purchases of REIT Shares at a discount from fair market value or
employee stock options that have an exercise price that is less than the fair market value
of the REIT Shares, either at the time of issuance or at the time of exercise, and (y) the
General Partner contributes all proceeds from such issuance to the Partnership. For
example, in the event the General Partner issues



 









 







REIT Shares for a cash purchase price and contributes all of the proceeds of such
issuance to the Partnership as required hereunder, the General Partner shall be issued a
number of additional Partnership Units equal to the product of (A) the number of such REIT
Shares issued by the General Partner, the proceeds of which were so contributed, multiplied
by (B) a fraction, the numerator of which is 100%, and the denominator of which is the
Conversion Factor in effect on the date of such contribution.




     (b) Certain Deemed Contributions of Proceeds of Issuance of REIT Shares. In
connection with any and all issuances of REIT Shares, the General Partner shall make
Capital Contributions to the Partnership of the proceeds therefrom; provided that if the
proceeds actually received and contributed by the General Partner are less than the gross
proceeds of such issuance as a result of any underwriter’s discount, distribution charge or
other expenses paid or incurred in connection with such issuance, then the General Partner
shall be deemed to have made Capital Contributions to the Partnership in the aggregate
amount of the gross proceeds of such issuance and the Partnership shall be deemed
simultaneously to have paid such expenses in accordance with Section 6.05 hereof and in
connection with the required issuance of additional Partnership Units to the General
Partner for such Capital Contributions pursuant to Section 4.02(a) hereof.



     4.03 Additional Funding. If the General Partner determines that it is in the best
interests of the Partnership to provide for additional Partnership funds (“Additional Funds”) for
any Partnership purpose, the General Partner may (i) cause the Partnership to obtain such funds
from outside borrowings, or (ii) have the General Partner or any of its Affiliates provide such
Additional Funds to the Partnership through loans or otherwise. In no event may the General
Partner require the Limited Partners to make Capital Contributions other than the Capital
Contributions made by such Limited Partners at the time of acquisition of their Limited Partnership
Interests.



     4.04 Capital Accounts. A separate capital account (a “Capital Account”) shall be
established and maintained for each Partner in accordance with Regulations Section
1.704-1(b)(2)(iv). If (i) a new or existing Partner acquires an additional Partnership Interest in
exchange for more than a de minimis Capital Contribution, (ii) the Partnership distributes to a
Partner more than a de minimis amount of Partnership property as consideration for a Partnership
Interest, or (iii) the Partnership is liquidated within the meaning of Regulation Section
1.704-1(b)(2)(ii)(g), the General Partner shall revalue the property of the Partnership to its fair
market value (as determined by the General Partner, in its sole and absolute discretion, and taking
into account Section 7701(g) of the Code) in accordance with Regulations Section
1.704-1(b)(2)(iv)(f). When the Partnership’s property is revalued by the General Partner, the
Capital Accounts of the Partners shall be adjusted in accordance with Regulations Sections
1.704-1(b)(2)(iv)(f) and (g), which generally require such Capital Accounts to be adjusted to
reflect the manner in which the unrealized gain or loss inherent in such property (that has not
been reflected in the Capital Accounts previously) would be allocated among the Partners pursuant
to Section 5.01 if there were a taxable disposition of such property for its fair market value (as



 









 







determined by the General Partner, in its sole and absolute discretion, and taking into account
Section 7701(g) of the Code) on the date of the revaluation.



     4.05 Percentage Interests. If the number of outstanding Partnership Units increases
or decreases during a taxable year, each Partner’s Percentage Interest shall be adjusted by the
General Partner effective as of the effective date of each such increase or decrease to a
percentage equal to the number of Partnership Units held by such Partner divided by the aggregate
number of Partnership Units outstanding after giving effect to such increase or decrease. If the
Partners’ Percentage Interests are adjusted pursuant to this Section 4.05, the Profits and Losses
for the taxable year in which the adjustment occurs shall be allocated between the part of the year
ending on the day when the Partners’ Percentage Interests are adjusted and the part of the year
beginning on the following day either (i) as if the taxable year had ended on the date of the
adjustment or (ii) based on the number of days in each part. The General Partner, in its sole and
absolute discretion, shall determine which method shall be used to allocate Profits and Losses for
the taxable year in which the adjustment occurs. The allocation of Profits and Losses for the
earlier part of the year shall be based on the Percentage Interests before adjustment, and the
allocation of Profits and Losses for the later part shall be based on the adjusted Percentage
Interests.



     4.06 No Interest on Contributions. No Partner shall be entitled to interest on its
Capital Contribution.



     4.07 Return of Capital Contributions. No Partner shall be entitled to withdraw any
part of its Capital Contribution or its Capital Account or to receive any distribution from the
Partnership, except as specifically provided in this Agreement. Except as otherwise provided
herein, there shall be no obligation to return to any Partner or withdrawn Partner any part of such
Partner’s Capital Contribution for so long as the Partnership continues in existence.



     4.08 No Third Party Beneficiary. No creditor or other third party having dealings
with the Partnership shall have the right to enforce the right or obligation of any Partner to make
Capital Contributions or loans or to pursue any other right or remedy hereunder or at law or in
equity, it being understood and agreed that the provisions of this Agreement shall be solely for
the benefit of, and may be enforced solely by, the parties hereto and their respective successors
and assigns. None of the rights or obligations of the Partners herein set forth to make Capital
Contributions or loans to the Partnership shall be deemed an asset of the Partnership for any
purpose by any creditor or other third party, nor may such rights or obligations be sold,
transferred or assigned by the Partnership or pledged or encumbered by the Partnership to secure
any debt or other obligation of the Partnership or of any of the Partners. In addition, it is the
intent of the parties hereto that no distribution to any Limited Partner shall be deemed a return
of money or other property in violation of the Act. However, if any court of competent
jurisdiction holds that, notwithstanding the provisions of this Agreement, any Limited Partner is
obligated to return such money or property, such obligation shall be the obligation of such Limited
Partner and not of the General Partner. Without limiting the



 









 







generality of the foregoing, a deficit Capital Account of a Partner shall not be deemed to be a
liability of such Partner nor an asset or property of the Partnership.



ARTICLE V

PROFITS AND LOSSES; DISTRIBUTIONS




     5.01 Allocation of Profit and Loss.



     (a) General. Subject to Section 5.01(d), after making any allocations required pursuant to
Section 5.01(b), 5.01(c) and 5.01(g), Profit and Loss of the Partnership for each fiscal year or
other applicable period of the Partnership shall be allocated among the Partners in accordance with
their respective Percentage Interests.



     (b) Minimum Gain Chargeback. Notwithstanding any provision to the contrary, (i) any expense
of the Partnership that is a “nonrecourse deduction” within the meaning of Regulations Section
1.704-2(b)(1) shall be allocated in accordance with the Partners’ respective Percentage Interests,
(ii) any expense of the Partnership that is a “partner nonrecourse deduction” within the meaning of
Regulations Section 1.704-2(i)(2) shall be allocated to the Partner that bears the “economic risk
of loss” of such deduction in accordance with Regulations Section 1.704-2(i)(1), (iii) if there is
a net decrease in Partnership Minimum Gain within the meaning of Regulations Section 1.704-2(f)(1)
for any Partnership taxable year, then, subject to the exceptions set forth in Regulations Section
1.704-2(f)(2), (3), (4) and (5), items of gain and income shall be allocated among the Partners in
accordance with Regulations Section 1.704-2(f) and the ordering rules contained in Regulations
Section 1.704-2(j), and (iv) if there is a net decrease in Partner Nonrecourse Debt Minimum Gain
within the meaning of Regulations Section 1.704-2(i)(4) for any Partnership taxable year, then,
subject to the exceptions set forth in Regulations Section 1.704(2)(g), items of gain and income
shall be allocated among the Partners in accordance with Regulations Section 1.704-2(i)(4) and the
ordering rules contained in Regulations Section 1.704-2(j). A Partner’s “interest in partnership
profits” for purposes of determining its share of the nonrecourse liabilities of the Partnership
within the meaning of Regulations Section 1.752-3(a)(3) shall be such Partner’s Percentage
Interest.



     (c) Qualified Income Offset. If a Partner receives in any taxable year an adjustment,
allocation, or distribution described in subparagraphs (4), (5), or (6) of Regulations Section
1.704-1(b)(2)(ii)(d) that causes or increases a deficit balance in such Partner’s Capital Account
that exceeds the sum of such Partner’s shares of Partnership Minimum Gain and Partner Nonrecourse
Debt Minimum Gain, as determined in accordance with Regulations Sections 1.704-2(g) and 1.704-2(i),
such Partner shall be allocated specially for such taxable year (and, if necessary, later taxable
years) items of income and gain in an amount and manner sufficient to eliminate such deficit
Capital Account balance as quickly as possible as provided in Regulations Section
1.704-1(b)(2)(ii)(d). After the occurrence of an allocation of income or gain to a Partner in
accordance with this Section 5.01(c), to the extent permitted by Regulations Section 1.704-1(b),
items of expense or loss shall be allocated to such Partner in an amount



 









 







necessary to offset the income or gain previously allocated to such Partner under this Section
5.01(c).



     (d) Capital Account Deficits. Loss shall not be allocated to a Limited Partner to the extent
that such allocation would cause a deficit in such Partner’s Capital Account (after reduction to
reflect the items described in Regulations Section 1.704-1(b)(2)(ii)(d)(4), (5) and (6)) to exceed
the sum of such Partner’s shares of Partnership Minimum Gain and Partner Nonrecourse Debt Minimum
Gain. Any Loss in excess of that limitation shall be allocated to the General Partner. After the
occurrence of an allocation of Loss to the General Partner in accordance with this Section 5.01(d),
to the extent permitted by Regulations Section 1.704-1(b), Profit shall be allocated to such
Partner in an amount necessary to offset the Loss previously allocated to each Partner under this
Section 5.01(d).



     (e) Allocations Between Transferor and Transferee. If a Partner transfers any part or all of
its Partnership Interest, the distributive shares of the various items of Profit and Loss allocable
among the Partners during such fiscal year of the Partnership shall be allocated between the
transferor and the transferee Partner either (i) as if the Partnership’s fiscal year had ended on
the date of the transfer, or (ii) based on the number of days of such fiscal year that each was a
Partner without regard to the results of Partnership activities in the respective portions of such
fiscal year in which the transferor and the transferee were Partners. The General Partner, in its
sole and absolute discretion, shall determine which method shall be used to allocate the
distributive shares of the various items of Profit and Loss between the transferor and the
transferee Partner.



     (f) Definition of Profit and Loss. “Profit” and “Loss” and any items of income, gain,
expense, or loss referred to in this Agreement shall be determined in accordance with federal
income tax accounting principles, as modified by Regulations Section 1.704-1(b)(2)(iv), except that
Profit and Loss shall not include items of income, gain and expense that are specially allocated
pursuant to Sections 5.01(b), 5.01(c), or 5.01(g). All allocations of income, Profit, gain, Loss,
and expense (and all items contained therein) for federal income tax purposes shall be identical to
all allocations of such items set forth in this Section 5.01, except as otherwise required by
Section 704(c) of the Code and Regulations Section 1.704-1(b)(4). The General Partner shall have
the authority to elect the method to be used by the Partnership for allocating items of income,
gain, and expense as required by Section 704(c) of the Code including a method that may result in a
Partner receiving a disproportionately larger share of the Partnership tax depreciation deductions,
and such election shall be binding on all Partners.



     (g) Special Allocation of Gains to Special OP Unitholders. For any year in which Special OP
Unitholders receive distributions pursuant to Section 8.06 of this Agreement, net capital gains
realized in such year by the Partnership shall be specially allocated to the Special OP Unitholders
in proportion to, and to the extent of, such distributions.



 









 





     5.02 Distribution of Cash.



     (a) The Partnership shall distribute cash on a quarterly (or, at the election of the General
Partner, more frequent) basis, in an amount determined by the General Partner in its sole and
absolute discretion, to the Partners who are Partners on the Partnership Record Date with respect
to such quarter (or other distribution period) in accordance with their respective Percentage
Interests on the Partnership Record Date; provided, however, that if a new or existing Partner
acquires an additional Partnership Interest in exchange for a Capital Contribution on any date
other than the next day after a Partnership Record Date, the cash distribution attributable to such
additional Partnership Interest relating to the Partnership Record Date next following the issuance
of such additional Partnership Interest (or relating to the Partnership Record Date if such
Partnership Interest was acquired on a Partnership Record Date) shall be reduced in the proportion
to (i) the number of days that such additional Partnership Interest is held by such Partner bears
to (ii) the number of days between such Partnership Record Date (including such Partnership Record
Date) and the immediately preceding Partnership Record Date.



     (b) Except for distributions pursuant to Section 5.06 of this Agreement in connection with the
dissolution and liquidation of the Partnership and subject to the provisions of Section 5.02(c),
5.02(d), 5.03, 5.05, and 8.06(b) of this Agreement, all distributions of cash shall be made to the
OP Unitholders in accordance with their respective Percentage Interests on the Partnership Record
Date.



     (c) Notwithstanding any other provision of this Agreement, the General Partner is authorized
to take any action that it determines to be necessary or appropriate to cause the Partnership to
comply with any withholding requirements established under the Code or any other federal, state or
local law including, without limitation, pursuant to Sections 1441, 1442, 1445 and 1446 of the
Code. To the extent that the Partnership is required to withhold and pay over to any taxing
authority any amount resulting from the allocation or distribution of income to the Partner or
assignee (including by reason of Section 1446 of the Code), either (i) if the actual amount to be
distributed to the Partner equals or exceeds the amount required to be withheld by the Partnership,
the amount withheld shall be treated as a distribution of cash in the amount of such withholding to
such Partner, or (ii) if the actual amount to be distributed to the Partner is less than the amount
required to be withheld by the Partnership, the amount required to be withheld shall be treated as
a loan (a “Partnership Loan”) from the Partnership to the Partner on the day the Partnership pays
over such amount to a taxing authority to the extent of such excess. A Partnership Loan shall be
repaid through withholding by the Partnership with respect to subsequent distributions to the
applicable Partner or assignee. In the event that a Limited Partner (a “Defaulting Limited
Partner”) fails to pay any amount owed to the Partnership with respect to the Partnership Loan
within 15 days after demand for payment thereof is made by the Partnership on the Limited Partner,
the General Partner, in its sole and absolute discretion, may elect to make the payment to the
Partnership on behalf of such Defaulting Limited Partner. In such event, on the date of payment,
the General Partner shall be deemed to have extended a loan (a “General Partner Loan”) to



 









 







the Defaulting Limited Partner in the amount of the payment made by the General Partner and shall
succeed to all rights and remedies of the Partnership against the Defaulting Limited Partner as to
that amount. Without limitation, the General Partner shall have the right to receive any
distributions that otherwise would be made by the Partnership to the Defaulting Limited Partner
until such time as the General Partner Loan has been paid in full, and any such distributions so
received by the General Partner shall be treated as having been received by the Defaulting Limited
Partner and immediately paid to the General Partner.



     Any amounts treated as a Partnership Loan or a General Partner Loan pursuant to this Section
5.02(b) shall bear interest at the lesser of (i) the base rate on corporate loans at large United
States money center commercial banks, as published from time to time in The Wall Street Journal, or
(ii) the maximum lawful rate of interest on such obligation, such interest to accrue from the date
the Partnership or the General Partner, as applicable, is deemed to extend the loan until such loan
is repaid in full.



     (d) In no event may a Partner receive a distribution of cash with respect to a Partnership
Unit if such Partner is entitled to receive a cash dividend as the holder of record of a REIT Share
for which all or part of such Partnership Unit has been or will be exchanged.



     5.03 REIT Distribution Requirements. The General Partner shall use its reasonable
efforts to cause the Partnership to distribute amounts sufficient to enable the General Partner to
pay shareholder dividends that will allow the General Partner to (i) meet its distribution
requirement for qualification as a REIT as set forth in Section 857 of the Code and (ii) avoid any
federal income or excise tax liability imposed by the Code.



     5.04 No Right to Distributions In Kind. No Partner shall be entitled to demand
property other than cash in connection with any distributions by the Partnership.



     5.05 Limitations of Return of Capital Contributions. Notwithstanding any of the
provisions of this Article V, but subject to Section 8.05, no Partner shall have the right to
receive and the General Partner shall not have the right to make, a distribution that includes a
return of all or part of a Partner’s Capital Contributions, unless after giving effect to the
return of a Capital Contribution, the sum of all Partnership liabilities, other than the
liabilities to a Partner for the return of his Capital Contribution, does not exceed the fair
market value of the Partnership’s assets.



     5.06 Distributions Upon Liquidation. Upon liquidation of the Partnership, after
payment of, or adequate provision for, debts and obligations of the Partnership, including any
Partner loans, any remaining assets of the Partnership shall be distributed to all Partners in
accordance with Section 5.02(b). To the extent deemed advisable by the General Partner,
appropriate arrangements (including the use of a liquidating trust) may be made to assure that
adequate funds are available to pay any contingent debts or obligations.



 









 





     5.07 Substantial Economic Effect. It is the intent of the Partners that the
allocations of Profit and Loss under the Agreement have substantial economic effect (or be
consistent with the Partners’ interests in the Partnership in the case of the allocation of losses
attributable to nonrecourse debt) within the meaning of Section 704(b) of the Code as interpreted
by the Regulations promulgated pursuant thereto. Article V and other relevant provisions of this
Agreement shall be interpreted in a manner consistent with such intent.



ARTICLE VI

RIGHTS, OBLIGATIONS AND POWERS OF THE GENERAL PARTNER




     6.01 Management of the Partnership.



     (a) Except as otherwise expressly provided in this Agreement, the General Partner shall have
full, complete and exclusive discretion to manage and control the business of the Partnership for
the purposes herein stated, and shall make all decisions affecting the business and assets of the
Partnership. Subject to the restrictions specifically contained in this Agreement, the powers of
the General Partner shall include, without limitation, the authority to take the following actions
on behalf of the Partnership:




     (i) to acquire, purchase, own, operate, lease and dispose of any real property and any
other property or assets including, but not limited to notes and mortgages, that the
General Partner determines are necessary or appropriate or in the best interests of the
business of the Partnership;




     (ii) to construct buildings and make other improvements on the properties owned or
leased by the Partnership;




     (iii) to authorize, issue, sell, redeem or otherwise purchase any Partnership
Interests or any securities (including secured and unsecured debt obligations of the
Partnership, debt obligations of the Partnership convertible into any class or series of
Partnership Interests, or options, rights, warrants or appreciation rights relating to any
Partnership Interests) of the Partnership;




     (iv) to borrow or lend money for the Partnership, issue or receive evidences of
indebtedness in connection therewith, refinance, increase the amount of, modify, amend or
change the terms of, or extend the time for the payment of, any such indebtedness, and
secure such indebtedness by mortgage, deed of trust, pledge or other lien on the
Partnership’s assets;




     (v) to pay, either directly or by reimbursement, for all operating costs and general
administrative expenses of the Partnership to third parties or to the General Partner or
its Affiliates as set forth in this Agreement;




     (vi) to guarantee or become a co maker of indebtedness of the General Partner or any
Subsidiary thereof, refinance, increase the amount of, modify, amend or change the terms
of, or extend the time for the payment of, any such



 









 






guarantee or indebtedness, and secure such guarantee or indebtedness by mortgage, deed
of trust, pledge or other lien on the Partnership’s assets;




     (vii) to use assets of the Partnership (including, without limitation, cash on hand)
for any purpose consistent with this Agreement, including, without limitation, payment,
either directly or by reimbursement, of all operating costs and general administrative
expenses of the General Partner, the Partnership or any Subsidiary of either, to third
parties or to the General Partner as set forth in this Agreement;




     (viii) to lease all or any portion of any of the Partnership’s assets, whether or not
the terms of such leases extend beyond the termination date of the Partnership and whether
or not any portion of the Partnership’s assets so leased are to be occupied by the lessee,
or, in turn, subleased in whole or in part to others, for such consideration and on such
terms as the General Partner may determine;




     (ix) to prosecute, defend, arbitrate, or compromise any and all claims or liabilities
in favor of or against the Partnership, on such terms and in such manner as the General
Partner may reasonably determine, and similarly to prosecute, settle or defend litigation
with respect to the Partners, the Partnership, or the Partnership’s assets;




     (x) to file applications, communicate, and otherwise deal with any and all
governmental agencies having jurisdiction over, or in any way affecting, the Partnership’s
assets or any other aspect of the Partnership business;




     (xi) to make or revoke any election permitted or required of the Partnership by any
taxing authority;




     (xii) to maintain such insurance coverage for public liability, fire and casualty, and
any and all other insurance for the protection of the Partnership, for the conservation of
Partnership assets, or for any other purpose convenient or beneficial to the Partnership,
in such amounts and such types, as it shall determine from time to time;




     (xiii) to determine whether or not to apply any insurance proceeds for any property to
the restoration of such property or to distribute the same;




     (xiv) to establish one or more divisions of the Partnership, to hire and dismiss
employees of the Partnership or any division of the Partnership, and to retain legal
counsel, accountants, consultants, real estate brokers, and such other persons, as the
General Partner may deem necessary or appropriate in connection with the Partnership
business and to pay therefore such reasonable remuneration as the General Partner may deem
reasonable and proper;



 









 






     (xv) to retain other services of any kind or nature in connection with the Partnership
business, and to pay therefore such remuneration as the General Partner may deem reasonable
and proper;




     (xvi) to negotiate and conclude agreements on behalf of the Partnership with respect
to any of the rights, powers and authority conferred upon the General Partner;




     (xvii) to maintain accurate accounting records and to file promptly all federal, state
and local income tax returns on behalf of the Partnership;




     (xviii) to distribute Partnership cash or other Partnership assets in accordance with
this Agreement;




     (xix) to form or acquire an interest in, and contribute property to, any further
limited or general partnerships, joint ventures or other relationships that it deems
desirable (including, without limitation, the acquisition of interests in, and the
contributions of property to, its Subsidiaries and any other Person in which it has an
equity interest from time to time);




     (xx) to establish Partnership reserves for working capital, capital expenditures,
contingent liabilities, or any other valid Partnership purpose; and




     (xxi) to merge, consolidate or combine the Partnership with or into another person;




     (xxii) to do any and all acts and things necessary or prudent to ensure that the
Partnership will not be classified as a “publicly traded partnership” for purposes of
Section 7704 of the Code; and




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



     (b) Except as otherwise provided herein, to the extent the duties of the General Partner
require expenditures of funds to be paid to third parties, the General Partner shall not have any
obligations hereunder except to the extent that partnership funds are reasonably available to it
for the performance of such duties, and nothing herein contained shall be deemed to authorize or
require the General Partner, in its capacity as such, to expend its individual funds for payment to
third parties or to undertake any individual liability or obligation on behalf of the Partnership.



 









 





     6.02 Delegation of Authority. The General Partner may delegate any or all of its
powers, rights and obligations hereunder, and may appoint, employ, contract or otherwise deal with
any Person for the transaction of the business of the Partnership, which Person may, under
supervision of the General Partner, perform any acts or services for the Partnership as the General
Partner may approve.



     6.03 Indemnification.



     (a) To the maximum extent permitted by Delaware law in effect from time to time, the
Partnership shall indemnify any Indemnitee from and against any claim or liability to which such
Person may become subject or which such Person may incur by reason of his service on behalf of the
Partnership and, without requiring a preliminary determination of the ultimate entitlement to
indemnification, shall pay or reimburse any Indemnitee reasonable expenses in advance of final
disposition of a proceeding.



     (b) Neither the amendment nor repeal of this Section 6.03, nor the adoption or amendment of
any other provision of the Agreement inconsistent with Section 6.03, shall apply to or affect in
any respect the applicability with respect to any act or failure to act which occurred prior to
such amendment, repeal or adoption.



     (c) The indemnification provided by this Section 6.03 shall be in addition to any other rights
to which an Indemnitee or any other Person may be entitled under any agreement, pursuant to any
vote of the Partners, as a matter of law or otherwise, and shall continue as to an Indemnitee who
has ceased to serve in such capacity.



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



     (e) For purposes of this Section 6.03, the Partnership shall be deemed to have requested an
Indemnitee to serve as fiduciary of an employee benefit plan whenever the performance by it of its
duties to the Partnership also imposes duties on, or otherwise involves services by, it to the plan
or participants or beneficiaries of the plan; excise taxes assessed on an Indemnitee with respect
to an employee benefit plan pursuant to applicable law shall constitute fines within the meaning of
this Section 6.03; and actions taken or omitted by the Indemnitee with respect to an employee
benefit plan in the performance of its duties for a purpose reasonably believed by it to be in the
interest of the participants and beneficiaries of the plan shall be deemed to be for a purpose
which is not opposed to the best interests of the Partnership.



     (f) In no event may an Indemnitee subject the Limited Partners to personal liability by reason
of the indemnification provisions set forth in this Agreement.



     (g) An Indemnitee shall not be denied indemnification in whole or in part under this Section
6.03 because the Indemnitee had an interest in the transaction with



 









 







respect to which the indemnification applies if the transaction was otherwise permitted by the
terms of this Agreement.



     (h) The provisions of this Section 6.03 are for the benefit of the Indemnitees, their heirs,
successors, assigns and administrators and shall not be deemed to create any rights for the benefit
of any other Persons.



     (i) Notwithstanding anything in this Section 6.03 to the contrary, if the General Partner
would be prohibited under the Articles of Incorporation from providing the indemnification or
advancement of expenses otherwise called for by this Section 6.03, then the Partnership shall not
provide such indemnification or advancement of expenses.



     6.04 Liability of the General Partner.



     (a) Notwithstanding anything to the contrary set forth in this Agreement, the General Partner
shall not be liable for monetary damages to the Partnership or any Partners for losses sustained or
liabilities incurred as a result of errors in judgment or of any act or omission if the General
Partner acted in good faith. The General Partner shall not be in breach of any duty that the
General Partner may owe to the Limited Partners or the Partnership or any other Persons under this
Agreement or of any duty stated or implied by law or equity provided the General Partner, acting in
good faith, abides by the terms of this Agreement.



     (b) The Limited Partners expressly acknowledge that the General Partner is acting on behalf of
the Partnership, itself and its shareholders collectively, that the General Partner is under no
obligation to consider the separate interests of the Limited Partners (including, without
limitation, the tax consequences to Limited Partners or the tax consequences of some, but not all,
of the Limited Partners) in deciding whether to cause the Partnership to take (or decline to take)
any actions. In the event of a conflict between the interests of its shareholders on one hand and
the Limited Partners on the other, the General Partner shall endeavor to resolve the conflict in a
manner not adverse to either its shareholders or the Limited Partners; provided, however, that for
so long as the General Partner directly owns a controlling interest in the Partnership, any such
conflict that the General Partner, in its sole and absolute discretion, determines cannot be
resolved in a manner not adverse to either its shareholders or the Limited Partner shall be
resolved in favor of the shareholders. The General Partner shall not be liable for monetary
damages for losses sustained, liabilities incurred, or benefits not derived by Limited Partners in
connection with such decisions, provided that the General Partner has acted in good faith.



     (c) Subject to its obligations and duties as General Partner set forth in Section 6.01 hereof,
the General Partner may exercise any of the powers granted to it under this Agreement and perform
any of the duties imposed upon it hereunder either directly or by or through its agents. The
General Partner shall not be responsible for any misconduct or negligence on the part of any such
agent appointed by it in good faith.



 









 





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



     (e) Any amendment, modification or repeal of this Section 6.04 or any provision hereof shall
be prospective only and shall not in any way affect the limitations on the General Partner’s
liability to the Partnership and the Limited Partners under this Section 6.04 as in effect
immediately prior to such amendment, modification or repeal with respect to matters occurring, in
whole or in part, prior to such amendment, modification or repeal, regardless of when claims
relating to such matters may arise or be asserted.



     6.05 Reimbursement of General Partner.



     (a) Except as provided in this Section 6.05 and elsewhere in this Agreement (including the
provisions of Articles 5 and 6 regarding distributions, payments, and allocations to which it may
be entitled), the General Partner shall not be compensated for its services as general partner of
the Partnership.



     (b) The General Partner shall be reimbursed on a monthly basis, or such other basis as the
General Partner may determine in its sole and absolute discretion, for all Administrative Expenses
and for all amounts that the General Partner disburses in connection with any redemption of REIT
Shares.



     6.06 Outside Activities. Subject to the Articles of Incorporation and any agreements
entered into by the General Partner or its Affiliates with the Partnership or a Subsidiary, any
officer, director, employee, agent, trustee, Affiliate or shareholder of the General Partner shall
be entitled to and may have business interests and engage in business activities in addition to
those relating to the Partnership, including business interests and activities substantially
similar or identical to those of the Partnership. Neither the Partnership nor any of the Limited
Partners shall have any rights by virtue of this Agreement in any such business ventures, interest
or activities. None of the Limited Partners nor any other Person shall have any rights by virtue
of this Agreement or the partnership relationship established hereby in any such business ventures,
interests or activities, and the General Partner shall have no obligation pursuant to this
Agreement to offer any interest in any such business ventures, interests and activities to the
Partnership or any Limited Partner, even if such opportunity is of a character which, if presented
to the Partnership or any Limited Partner, could be taken by such Person.



 









 





     6.07 Employment or Retention of Affiliates.



     (a) Any Affiliate of the General Partner may be employed or retained by the Partnership and
may otherwise deal with the Partnership (whether as a buyer, lessor, lessee, manager, furnisher of
goods or services, broker, advisor, agent, lender or otherwise) and may receive from the
Partnership any compensation, price, or other payment therefore which the General Partner
determines to be fair and reasonable.



     (b) The Partnership may lend or contribute to its Subsidiaries or other Persons in which it
has an equity investment, and such Persons may borrow funds from the Partnership, on terms and
conditions established in the sole and absolute discretion of the General Partner. The foregoing
authority shall not create any right or benefit in favor of any Subsidiary or any other Person.



     (c) The Partnership may transfer assets to joint ventures, other partnerships, corporations or
other business entities in which it is or thereby becomes a participant upon such terms and subject
to such conditions as the General Partner deems are consistent with this Agreement and applicable
law.



     (d) Except as expressly permitted by this Agreement, neither the General Partner nor any of
its Affiliates shall sell, transfer or convey any property to, or purchase any property from, the
Partnership, directly or indirectly, except pursuant to transactions that are on terms that are
fair and reasonable to the Partnership.



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



     6.09 Miscellaneous. In the event the General Partner redeems any REIT Shares, then
the General Partner shall cause the Partnership to purchase from the General Partner a number of
Partnership Units as determined based on the application of the Conversion Factor on the same terms
that the General Partner exchanged such REIT Shares. Moreover, if the General Partner makes a cash
tender offer or other offer to acquire REIT Shares, then the General Partner shall cause the
Partnership to make a corresponding offer to the General Partner to acquire an equal number of
Partnership Units held by the General Partner. In the event any REIT Shares are exchanged by the



 









 







General Partner pursuant to such offer, the Partnership shall redeem an equivalent number of the
General Partner’s Partnership Units for an equivalent purchase price based on the application of
the Conversion Factor.



ARTICLE VII

CHANGES IN GENERAL PARTNER




     7.01 Transfer of the General Partner’s Partnership Interest.



     (a) The General Partner shall not transfer all or any portion of its General Partnership
Interest or withdraw as General Partner except as provided in or in connection with a transaction
contemplated by Section 7.01(c), (d) or (e).



     (b) [reserved]




     (c) Except as otherwise provided in Section 7.01(d) or (e) hereof, the General Partner shall
not engage in any merger, consolidation or other combination with or into another Person or sale of
all or substantially all of its assets, (other than in connection with a change in the General
Partner’s state of incorporation or organizational form) in each case which results in a change of
control of the General Partner (a “Transaction”), unless:




     (i) the consent of the holders of a majority of the Partnership Units (including the
Partnership Units held by the General Partner or an Affiliate thereof) and the holders of a
majority of the Special Partnership Units is obtained;




(ii) as a result of such Transaction all Limited Partners will receive (A) for each
Partnership Unit an amount of cash, securities, or other property equal to the product of
the Conversion Factor and the greatest amount of cash, securities or other property paid in
the Transaction to a holder of one REIT Share in consideration of one REIT Share, provided
that if, in connection with the Transaction, a purchase, tender or exchange offer (“Offer’)
shall have been made to and accepted by the holders of more than 50% of the outstanding
REIT Shares, each holder of Partnership Units shall be given the option to exchange its
Partnership Units for the greatest amount of cash, securities, or other property which a
Limited Partner would have received had it (a) exercised its Redemption Right and (b) sold,
tendered or exchanged pursuant to the Offer the REIT Shares received upon exercise of the
Redemption Right immediately prior to the expiration of the Offer and (B) for each Special
Partnership Unit an amount of cash, securities or other property (as applicable based upon
the type of consideration and the proportions thereof paid to holders of REIT Shares in the
Transaction) equal to the fair market value of such Special Partnership Unit at such time
as determined in good faith by the General Partner by reference to the value paid for the
REIT Shares; or




          (iii) the General Partner is the surviving entity in the Transaction and either (A)
the holders of REIT Shares do not receive cash, securities, or other



 









 







property in the Transaction or (B) all Limited Partners (other than the General Partner or
any Subsidiary) receive an amount of cash, securities, or other property (expressed as an
amount per REIT Share) that is no less than the product of the Conversion Factor and the
greatest amount of cash, securities, or other property (expressed as an amount per REIT
Share) received in the Transaction by any holder of REIT Shares and (2) in exchange for
their Special Partnership Units, an amount of cash, securities or other property (as
applicable based upon the type of consideration and proportion thereof paid to holders of
REIT Shares in the Transaction) equal to the fair market value of such special Partnership
Units at such time as determined in good faith by the General Partner by reference to the
value paid for the REIT Shares.



     (d) Notwithstanding Section 7.01(c), the General Partner may merge with or into or consolidate
with another entity if immediately after such merger or consolidation (i) substantially all of the
assets of the successor or surviving entity (the “Survivor”), other than Partnership Units held by
the General Partner, are contributed, directly or indirectly, to the Partnership as a Capital
Contribution in exchange for Partnership Units with a fair market value equal to the value of the
assets so contributed as determined by the Survivor in good faith and (ii) the Survivor expressly
agrees to assume all obligations of the General Partner, as appropriate, hereunder. Upon such
contribution and assumption, the Survivor shall have the right and duty to amend this Agreement as
set forth in this Section 7.01(d). The Survivor shall in good faith arrive at a new method for the
calculation of the Cash Amount, the REIT Shares Amount and Conversion Factor for a Partnership Unit
after any such merger or consolidation so as to approximate the existing method for such
calculation as closely as reasonably possible. Such calculation shall take into account, among
other things, the kind and amount of securities, cash and other property that was receivable upon
such merger or consolidation by a holder of REIT Shares or options, warrants or other rights
relating thereto, and to which a holder of Partnership Units could have acquired had such
Partnership Units been exchanged immediately prior to such merger or consolidation. Such amendment
to this Agreement shall provide for adjustment to such method of calculation, which shall be as
nearly equivalent as may be practicable to the adjustments provided for with respect to the
Conversion Factor. The Survivor also shall in good faith modify the definition of REIT Shares and
make such amendments to Section 8.05 hereof so as to approximate the existing rights and
obligations set forth in Section 8.05 as closely as reasonably possible. The above provisions of
this Section 7.0 1(d) shall similarly apply to successive mergers or consolidations permitted
hereunder.



 









 





     (e) Notwithstanding Section 7.01(c),





     (i) a General Partner may transfer all or any portion of its General Partnership
Interest to (a) a wholly-owned Subsidiary of such General Partner or (B) the owner of all
of the ownership interests of such General Partner, and following a transfer of all of its
General Partnership Interest, may withdraw as General Partner; and




     (ii) the General Partner may engage in Transactions not required by law or by the
rules of any national securities exchange on which the REIT Shares are listed to be
submitted to the vote of the holders of the REIT Shares.



     7.02 Admission of a Substitute or Additional General Partner. A Person shall be
admitted as a substitute or additional General Partner of the Partnership only if the following
terms and conditions are satisfied:



     (a) the Person to be admitted as a substitute or additional General Partner shall have
accepted and agreed to be bound by all the terms and provisions of this Agreement by executing a
counterpart thereof and such other documents or instruments as may be required or appropriate in
order to effect the admission of such Person as a General Partner, and a certificate evidencing the
admission of such Person as a General Partner shall have been filed for recordation and all other
actions required by Section 2.05 hereof in connection with such admission shall have been
performed;



     (b) if the Person to be admitted as a substitute or additional General Partner is a
corporation or a partnership it shall have provided the Partnership with evidence satisfactory to
counsel for the Partnership of such Person’s authority to become a General Partner and to be bound
by the terms and provisions of this Agreement; and



     (c) counsel for the Partnership shall have rendered an opinion (relying on such opinions from
other counsel and the state or any other jurisdiction as may be necessary) that the admission of
the person to be admitted as a substitute or additional General Partner is in conformity with the
Act, that none of the actions taken in connection with the admission of such Person as a substitute
or additional General Partner will cause (i) the Partnership to be classified other than as a
partnership for federal income tax purposes, or (ii) the loss of any Limited Partner’s limited
liability.



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



     (a) Upon the occurrence of an Event of Bankruptcy as to a General Partner (and its removal
pursuant to Section 7.04(a) hereof) or the death, withdrawal, removal or dissolution of a General
Partner (except that, if a General Partner is on the date of such occurrence a partnership, the
withdrawal, death, dissolution, Event of Bankruptcy as to, or removal of a partner in, such
partnership shall be deemed not to be a dissolution of such General Partner if the business of such
General Partner is continued by the remaining partner or partners), the Partnership shall be
dissolved and terminated unless the Partnership is continued pursuant to Section 7.03(b) hereof.
The merger of the



 









 







General Partner with or into any entity that is admitted as a substitute or successor General
Partner pursuant to Section 7.02 hereof shall not be deemed to be the withdrawal, dissolution or
removal of the General Partner.



     (b) Following the occurrence of an Event of Bankruptcy as to a General Partner (and its
removal pursuant to Section 7.04(a) hereof) or the death, withdrawal, removal or dissolution of a
General Partner (except that, if a General Partner is on the date of such occurrence a partnership,
the withdrawal, death, dissolution, Event of Bankruptcy as to, or removal of a partner in, such
partnership shall be deemed not to be a dissolution of such General Partner if the business of such
General Partner is continued by the remaining partner or partners), the Limited Partners, within 90
days after such occurrence, may elect to continue the business of the Partnership for the balance
of the term specified in Section 2.04 hereof by selecting, subject to Section 7.02 hereof and any
other provisions of this Agreement, a substitute General Partner by consent of a majority in
interest of the Limited Partners. If the Limited Partners elect to continue the business of the
Partnership and admit a substitute General Partner, the relationship with the Partners and of any
Person who has acquired an interest of a Partner in the Partnership shall be governed by this
Agreement.



     7.04 Removal of a General Partner.



     (a) Upon the occurrence of an Event of Bankruptcy as to, or the dissolution of, a General
Partner, such General Partner shall be deemed to be removed automatically; provided, however, that
if a General Partner is on the date of such occurrence a partnership, the withdrawal, death,
dissolution, Event of Bankruptcy as to or removal of a partner in such partnership shall be deemed
not to be a dissolution of the General Partner if the business of such General Partner is continued
by the remaining partner or partners. The Limited Partners may not remove the General Partner,
with or without cause.



     (b) If a General Partner has been removed pursuant to this Section 7.04 and the Partnership is
continued pursuant to Section 7.03 hereof, such General Partner shall promptly transfer and assign
its General Partnership Interest in the Partnership to the substitute General Partner approved by a
majority in interest of the Limited Partners in accordance with Section 7.03(b) hereof and
otherwise admitted to the Partnership in accordance with Section 7.02 hereof. At the time of
assignment, the removed General Partner shall be entitled to receive from the substitute General
Partner the fair market value of the General Partnership Interest of such removed General Partner
as reduced by any damages caused to the Partnership by such General Partner. Such fair market
value shall be determined by an appraiser mutually agreed upon by the General Partner and a
majority in interest of the Limited Partners within 10 days following the removal of the General
Partner. In the event that the parties are unable to agree upon an appraiser, the removed General
Partner and a majority in interest of the Limited Partners each shall select an appraiser. Each
such appraiser shall complete an appraisal of the fair market value of the removed General
Partner’s General Partnership Interest within 30 days of the General Partner’s removal, and the
fair market value of the removed General Partner’s General Partnership Interest shall be the
average of the two appraisals; provided, however, that if the higher appraisal exceeds the lower
appraisal by more than 20% of the



 









 







amount of the lower appraisal, the two appraisers, no later than 40 days after the removal of
the General Partner, shall select a third appraiser who shall complete an appraisal of the fair
market value of the removed General Partner’s General Partnership Interest no later than 60 days
after the removal of the General Partner. In such case, the fair market value of the removed
General Partner’s General Partnership Interest shall be the average of the two appraisals closest
in value.



     (c) The General Partnership Interest of a removed General Partner, during the time after
removal until transfer under Section 7.04(b), shall be converted to that of a special Limited
Partner; provided, however, such removed General Partner shall not have any rights to participate
in the management and affairs of the Partnership, and shall not be entitled to any portion of the
income, expense, profit, gain or loss allocations or cash distributions allocable or payable, as
the case may be, to the Limited Partners. Instead, such removed General Partner shall receive and
be entitled only to retain distributions or allocations of such items that it would have been
entitled to receive in its capacity as General Partner, until the transfer is effective pursuant to
Section 7.04(b).



     (d) All Partners shall have given and hereby do give such consents, shall take such actions
and shall execute such documents as shall be legally necessary and sufficient to effect all the
foregoing provisions of this Section.



ARTICLE VIII

RIGHTS AND OBLIGATIONS OF THE LIMITED PARTNERS




     8.01 Management of the Partnership. The Limited Partners shall not participate in the
management or control of Partnership business nor shall they transact any business for the
Partnership, nor shall they have the power to sign for or bind the Partnership, such powers being
vested solely and exclusively in the General Partner.



     8.02 Power of Attorney. Each Limited Partner hereby irrevocably appoints the General
Partner its true and lawful attorney-in-fact, who may act for each Limited Partner and in its name,
place and stead, and for its use and benefit, to sign, acknowledge, swear to, deliver, file or
record, at the appropriate public offices, any and all documents, certificates, and instruments as
may be deemed necessary or desirable by the General Partner to carry out fully the provisions of
this Agreement and the Act in accordance with their terms, which power of attorney is coupled with
an interest and shall survive the death, dissolution or legal incapacity of the Limited Partner, or
the transfer by the Limited Partner of any part or all of its Partnership Interest.



     8.03 Limitation on Liability of Limited Partners. No Limited Partner shall be liable
for any debts, liabilities, contracts or obligations of the Partnership. A Limited Partner shall
be liable to the Partnership only to make payments of its Capital Contribution, if any, as and when
due hereunder. After its Capital Contribution is fully paid, no Limited Partner shall, except as
otherwise required by the Act, be required to make any further Capital Contributions or other
payments or lend any funds to the Partnership.



 









 





     8.04 [reserved]



     8.05 Redemption Right.



     (a) Subject to Sections 8.05(b), 8.05(c), 8.05(d), and 8.05(e) and the provisions of any
agreements between the Partnership and one or more Limited Partners with respect to Partnership
Units held by them, each Limited Partner, other than the General Partner, shall have the right (the
“Redemption Right”) to require the Partnership to redeem, on a date that is not later than 30 days
after the date set forth on the Notice of Redemption (the “Specified Redemption Date”), all or a
portion of the Partnership Units held by such Limited Partner at a price equal to and in the form
of the Cash Amount to be paid by the Partnership; provided that such Partnership Units shall have
been outstanding for at least one year. The Redemption Right shall be exercised pursuant to a
Notice of Redemption delivered to the Partnership (with a copy to the General Partner) by the
Limited Partner who is exercising the Redemption Right (the “Redeeming Partner”); provided,
however, that the Partnership shall not be obligated to satisfy such Redemption Right if the
General Partner elects to purchase the Partnership Units subject to the Notice of Redemption
pursuant to Section 8.05(b). A Limited Partner may not exercise the Redemption Right for less than
1,000 Partnership Units or, if such Limited Partner holds less than 1,000 Partnership Units, all of
the Partnership Units held by such Partner. The Redeeming Partner shall have no right, with
respect to any Partnership Units so exchanged, to receive any distribution paid with respect to
Partnership Units if the record date for such distribution is on or after the Specified Redemption
Date.



     (b) Notwithstanding the provisions of Section 8.05(a), a Limited Partner that exercises the
Redemption Right shall be deemed to have offered to sell the Partnership Units described in the
Notice of Redemption to the General Partner, and the General Partner may, in its sole and absolute
discretion, elect to purchase directly and acquire such Partnership Units by paying to the
Redeeming Partner either the Cash Amount or the REIT Shares Amount, as elected by the General
Partner (in its sole and absolute discretion), on the Specified Redemption Date, whereupon the
General Partner shall acquire the Partnership Units offered for exchange by the Redeeming Partner
and shall be treated for all purposes of this Agreement as the owner of such Partnership Units. If
the General Partner shall elect to exercise its right to purchase Partnership Units under this
Section 8.05(b) with respect to a Notice of Redemption, it shall so notify the Redeeming Partner
within five Business Days after the receipt by the General Partner of such Notice of Redemption.
Unless the General Partner (in its sole and absolute discretion) shall exercise its right to
purchase Partnership Units from the Redeeming Partner pursuant to this Section 8.05(b), the General
Partner shall not have any obligation to the Redeeming Partner or the Partnership with respect to
the Redeeming Partner’s exercise of the Redemption Right. In the event the General Partner shall
exercise its right to purchase Partnership Units with respect to the exercise of a Redemption Right
in the manner described in the first sentence of this Section 8.05(b), the Partnership shall have
no obligation to pay any amount to the Redeeming Partner with respect to such Redeeming Partner’s
exercise of such Redemption Right, and each of the Redeeming Partner, the Partnership, and the
General Partner, as the case may be, shall treat the transaction between the General Partner, as
the case may be, and the Redeeming Partner for federal



 









 







income tax purposes as a sale of the Redeeming Partner’s Partnership Units to the General
Partner, as the case may be. Each Redeeming Partner agrees to execute such documents as the
General Partner may reasonably require in connection with the issuance of REIT Shares upon exercise
of the Redemption Right.



     (c) Notwithstanding the provisions of Section 8.05(a) and 8.05(b), a Limited Partner shall not
be entitled to exercise the Redemption Right if the delivery of REIT Shares to such Partner on the
Specified Redemption Date by the General Partner pursuant to Section 8.05(b) (regardless of whether
or not the General Partner would in fact exercise its rights under Section 8.05(b)) would (i)
result in such Partner or any other person owning, directly or indirectly, REIT Shares in excess of
the Ownership Limitation (as defined in the Articles of Incorporation and calculated in accordance
therewith), except as provided in the Articles of Incorporation, (ii) result in REIT Shares being
owned by fewer than 100 persons (determined without reference to any rules of attribution), except
as provided in the Articles of Incorporation, (iii) result in the General Partner being “closely
held” within the meaning of Section 856(h) of the Code, or (iv) cause the General Partner to own,
directly or constructively, 10% or more of the ownership interests in a tenant, within the meaning
of Section 856(d)(2)(B) of the Code. The General Partner, in its sole and absolute discretion, may
waive the restriction on exchange set forth in this Section 8.05(c).



     (d) Any Cash Amount to be paid to a Redeeming Partner pursuant to this Section 8.05 shall be
paid on the Specified Redemption Date; provided, however, that the General Partner may elect to
cause the Specified Redemption Date to be delayed for up to an additional 180 days to the extent
required for the General Partner to cause additional REIT Shares to be issued to provide financing
to be used to make such payment of the Cash Amount. Notwithstanding the foregoing, the General
Partner agrees to use its best efforts to cause the closing of the acquisition of redeemed
Partnership Units hereunder to occur as quickly as reasonably possible.



     (e) Notwithstanding any other provision of this Agreement, the General Partner shall place
appropriate restrictions on the ability of the Limited Partners to exercise their Redemption Rights
as and if deemed necessary to ensure that the Partnership does not constitute a “publicly traded
partnership” under section 7704 of the Code. If and when the General Partner determines that
imposing such restrictions is necessary, the General Partner shall give prompt written notice
thereof (a “Restriction Notice”) to each of the Limited Partners, which notice shall be accompanied
by a copy of an opinion of counsel to the Partnership which states that, in the opinion of such
counsel, restrictions are necessary in order to avoid the Partnership being treated as a “publicly
traded partnership” under section 7704 of the Code.



     8.06
Redemption of Special Partnership Units. Upon the earliest to occur of (i) the
termination or nonrenewal of the Advisory Agreement, (ii) a Liquidity Event or (iii) the Listing,
the Special OP Unitholders shall have the right to require the Partnership to redeem the Special
Partnership Units as provided in this Section 8.06.



 









 





     (a) If the Advisory Agreement is terminated by the General Partner for “cause” (as defined in
the Advisory Agreement), all of the Special Partnership Units shall be redeemed by the Partnership
for $1, effective as of the date of the termination of the Advisory Agreement.



     (b) Upon the occurrence of a Liquidity Event, a Listing or the termination of the Advisory
Agreement by the General Partner other than for “cause” (as defined in the Advisory Agreement”),
the Special Partnership Units shall be redeemed for an aggregate amount equal to 15% of the net
proceeds of such event; provided, that, if a Liquidity Event, Termination Event or Listing shall
occur prior to the fifth anniversary of the date of this Agreement, the Special Partnership Units
shall be redeemed for an amount equal to the greater of (i) 15% of the net proceeds of such event
or (ii) the total organizational and offering expenses incurred by the Advisor and its affiliates
in connection with the offering of the shares of the General Partner; provided further, that, no
payments shall be made unless and until the OP Unitholders have received, in the aggregate,
cumulative distributions from operating income, sales proceeds and other sources in an amount equal
to their Capital Contributions to the Partnership (less any amounts received in redemption of their
Partnership Interests) plus a 10.0% cumulative non-compounded annual pre-tax return thereon;



     (c) Upon the termination of the Advisory Agreement other than for “cause” (as defined in the
Advisory Agreement) shall consist of a non-interest bearing promissory note that will be repaid,
subject to Section 8.06(b), using the net proceeds of a Liquidity Event or a Listing in connection
with or following the occurrence of such termination. In addition, the amount of the promissory
note issued in connection with a Termination Event will be subject to reduction as of the date of
the Liquidity Event or Listing by an amount that will ensure that, in connection with the Liquidity
Event or Listing, the holder of the promissory note does not receive in excess of 15.0% of the
distributions of the net proceeds that are made or are deemed to be made by the Partnership after
the OP Unitholders have received or are deemed to have received aggregate, cumulative distributions
equal to their Capital Contributions to the Partnership (less any amounts received in redemption of
their Partnership Interests) plus a 10.0% cumulative noncompounded annual pre-tax return thereon.



     (d) In the event of a Listing, the Special Partnership Units shall be redeemed for an
aggregate amount equal to the proceeds that would have been received if the Partnership had sold
all of its assets at a price equal to the market value of all of the REIT Shares outstanding on the
date of the Listing, calculated based on the average closing price, or average of bid and ask
prices, as the case may be, during the 30-day period beginning 90 days after such Listing. Payment
to the Special OP Unitholders upon a Listing shall be in the form of REIT Shares, valued as set
forth in the preceding sentence.



     (e) The net proceeds of a termination of the Advisory Agreement other than for “cause” shall
be calculated as if the General Partner had sold all of its assets at a price equal to the price
per REIT Share as of the date of such termination multiplied by



 









 







the number of REIT Shares of the General Partner outstanding as of the close of business on the
date of such termination, without taking into effect purchases or redemptions to be effected as of
such date.



ARTICLE IX

TRANSFERS AND REDEMPTIONS OF LIMITED PARTNERSHIP INTERESTS




     9.01 Purchase for Investment.



     (a) Each Limited Partner hereby represents and warrants to the General Partner and to the
Partnership that the acquisition of his Partnership Interests is made as a principal for his
account for investment purposes only and not with a view to the resale or distribution of such
Partnership Interest.



     (b) Each Limited Partner agrees that he will not sell, assign or otherwise transfer his
Partnership Interest or any fraction thereof, whether voluntarily or by operation of law or at
judicial sale or otherwise, to any Person who does not make the representations and warranties to
the General Partner set forth in Section 9.0 1(a) above and similarly agree not to sell, assign or
transfer such Partnership Interest or fraction thereof to any Person who does not similarly
represent, warrant and agree.



     9.02 Restrictions on Transfer of Limited Partnership Interests.



     (a) Subject to the provisions of 9.02(b), (c) and (d), no Limited Partner may offer, sell,
assign, hypothecate, pledge or otherwise transfer all or any portion of his Limited Partnership
Interest, or any of such Limited Partner’s economic rights as a Limited Partner, whether
voluntarily or by operation of law or at judicial sale or otherwise (collectively, a “Transfer”)
without the consent of the General Partner, which consent may be granted or withheld in its sole
and absolute discretion. Any such purported transfer undertaken without such consent shall be
considered to be null and void ab initio and shall not be given effect. The General Partner may
require, as a condition of any Transfer to which it consents, that the transferor assume all costs
incurred by the Partnership in connection therewith.



     (b) No Limited Partner may withdraw from the Partnership other than as a result of a permitted
Transfer (i.e., a Transfer consented to as contemplated by clause (a) above or clause (c) below or
a Transfer pursuant to 9.05 below) of all of his Partnership Units pursuant to this Article IX or
pursuant to a redemption of all of his Partnership Units pursuant to 8.05 or pursuant to the
redemption of his Special Partnership Units pursuant to Section 8.06. Upon the permitted Transfer
or redemption of all of a Limited Partner’s Partnership Units, such Limited Partner shall cease to
be a Limited Partner.



     (c) Subject to 9.02(d), (e) and (f) below, a Limited Partner may Transfer, with the consent of
the General Partner, all or a portion of his Partnership Units to (i) a parent or parent’s spouse,
natural or adopted descendant or descendants, spouse of such descendant, or brother or sister, or a
trust created by such Limited Partner for the benefit of such Limited Partner and/or any such
person(s), of which trust such Limited Partner or



 









 







any such person(s) is a trustee, (ii) a corporation controlled by a Person or Persons named in
(i) above, or (iii) if the Limited Partner is an entity, its beneficial owners.



     (d) No Limited Partner may effect a Transfer of its Limited Partnership Interest, in whole or
in part, if, in the opinion of legal counsel for the Partnership, such proposed Transfer would
violate any applicable federal or state securities or blue sky law (including investment
suitability standards).



     (e) No Transfer by a Limited Partner of its Partnership Units, in whole or in part, may be
made to any Person if (i) in the opinion of legal counsel for the Partnership, the transfer would
result in the Partnership’s being treated as an association taxable as a corporation (other than a
qualified REIT subsidiary within the meaning of Section 856(i) of the Code), (ii) in the opinion of
legal counsel for the Partnership, it would adversely affect the ability of the General Partner to
continue to qualify as a REIT or subject the General Partner to any additional taxes under Section
857 or Section 4981 of the Code, or (iii) such transfer is effectuated through an “established
securities market” or a “secondary market (or the substantial equivalent thereof)” within the
meaning of Section 7704 of the Code.



     (f) No transfer of any Partnership Units may be made to a lender to the Partnership or any
Person who is related (within the meaning of Regulations Section 1.752-4(b)) to any lender to the
Partnership whose loan constitutes a nonrecourse liability (within the meaning of Regulations
Section 1.752-1(a)(2)), without the consent of the General Partner, which may be withheld in its
sole and absolute discretion, provided that as a condition to such consent the lender will be
required to enter into an arrangement with the Partnership and the General Partner to exchange or
redeem for the Cash Amount any Partnership Units in which a security interest is held
simultaneously with the time at which such lender would be deemed to be a partner in the
Partnership for purposes of allocating liabilities to such lender under Section 752 of the Code.



     (g) Any Transfer in contravention of any of the provisions of this Article IX shall be void
and ineffectual and shall not be binding upon, or recognized by, the Partnership.



     (h) Prior to the consummation of any Transfer under this Article IX, the transferor and/or the
transferee shall deliver to the General Partner such opinions, certificates and other documents as
the General Partner shall request in connection with such Transfer.



     9.03 Admission of Substitute Limited Partner.



     (a) Subject to the other provisions of this Article IX, an assignee of the Limited Partnership
Interest of a Limited Partner (which shall be understood to include any purchaser, transferee,
donee, or other recipient of any disposition of such Limited Partnership Interest) shall be deemed
admitted as a Limited Partner of the Partnership only with the consent of the General Partner and]
upon the satisfactory completion of the following:



 









 






     (i) The assignee shall have accepted and agreed to be bound by the terms and
provisions of this Agreement by executing a counterpart or an amendment thereof, including
a revised Exhibit A, and such other documents or instruments as the General Partner
may require in order to effect the admission of such Person as a Limited Partner.




     (ii) To the extent required, an amended Certificate evidencing the admission of such
Person as a Limited Partner shall have been signed, acknowledged and filed for record in
accordance with the Act.




     (iii) The assignee shall have delivered a letter containing the representation set
forth in Section 9.01(a) hereof and the agreement set forth in Section 9.01(b) hereof.




     (iv) If the assignee is a corporation, partnership or trust, the assignee shall have
provided the General Partner with evidence satisfactory to counsel for the Partnership of
the assignee’s authority to become a Limited Partner under the terms and provisions of this
Agreement.




     (v) The assignee shall have executed a power of attorney containing the terms and
provisions set forth in Section 8.02 hereof.




     (vi) The assignee shall have paid all legal fees and other expenses of the Partnership
and the General Partner and filing and publication costs in connection with its
substitution as a Limited Partner.




     (vii) The assignee has obtained the prior written consent of the General Partner to
its admission as a Substitute Limited Partner, which consent may be given or denied in the
exercise of the General Partner’s sole and absolute discretion.



     (b) For the purpose of allocating Profits and Losses and distributing cash received by the
Partnership, a Substitute Limited Partner shall be treated as having become, and appearing in the
records of the Partnership as, a Partner upon the filing of the Certificate described in Section
9.03(a)(ii) hereof or, if no such filing is required, the later of the date specified in the
transfer documents or the date on which the General Partner has received all necessary instruments
of transfer and substitution.



     (c) The General Partner shall cooperate with the Person seeking to become a Substitute Limited
Partner by preparing the documentation required by this Section and making all official filings and
publications. The Partnership shall take all such action as promptly as practicable after the
satisfaction of the conditions in this Article IX to the admission of such Person as a Limited
Partner of the Partnership.



     9.04 Rights of Assignees of Partnership Interests.



     (a) Subject to the provisions of Sections 9.01 and 9.02 hereof, except as required by
operation of law, the Partnership shall not be obligated for any purposes



 









 







whatsoever to recognize the assignment by any Limited Partner of its Partnership Interest
until the Partnership has received notice thereof.



     (b) Any Person who is the assignee of all or any portion of a Limited Partner’s Limited
Partnership Interest, but does not become a Substitute Limited Partner and desires to make a
further assignment of such Limited Partnership Interest, shall be subject to all the provisions of
this Article IX to the same extent and in the same manner as any Limited Partner desiring to make
an assignment of its Limited Partnership Interest.



     9.05 Effect of Bankruptcy, Death, Incompetence or Termination of a Limited Partner.
The occurrence of an Event of Bankruptcy as to a Limited Partner, the death of a Limited Partner or
a final adjudication that a Limited Partner is incompetent (which term shall include, but not be
limited to, insanity) shall not cause the termination or dissolution of the Partnership, and the
business of the Partnership shall continue if an order for relief in a bankruptcy proceeding is
entered against a Limited Partner, the trustee or receiver of his estate or, if he dies, his
executor, administrator or trustee, or, if he is finally adjudicated incompetent, his committee,
guardian or conservator, shall have the rights of such Limited Partner for the purpose of settling
or managing his estate property and such power as the bankrupt, deceased or incompetent Limited
Partner possessed to assign all or any part of his Partnership Interest and to join with the
assignee in satisfying conditions precedent to the admission of the assignee as a Substitute
Limited Partner.



     9.06 Joint Ownership of Interests. A Partnership Interest may be acquired by two
individuals as joint tenants with right of survivorship, provided that such individuals either are
married or are related and share the same home as tenants in common. The written consent or vote
of both owners of any such jointly held Partnership Interest shall be required to constitute the
action of the owners of such Partnership Interest; provided, however, that the written consent of
only one joint owner will be required if the Partnership has been provided with evidence
satisfactory to the counsel for the Partnership that the actions of a single joint owner can bind
both owners under the applicable laws of the state of residence of such joint owners. Upon the
death of one owner of a Partnership Interest held in a joint tenancy with a right of survivorship,
the Partnership Interest shall become owned solely by the survivor as a Limited Partner and not as
an assignee. The Partnership need not recognize the death of one of the owners of a jointly-held
Partnership Interest until it shall have received notice of such death. Upon notice to the General
Partner from either owner, the General Partner shall cause the Partnership Interest to be divided
into two equal Partnership Interests, which shall thereafter be owned separately by each of the
former owners.



     9.07 Redemption of Partnership Units. The General Partner will cause the Partnership
to redeem Partnership Units, to the extent it shall have legally available funds therefor, at any
time the General Partner redeems shares of beneficial interest in itself. The number and class or
series of Partnership Units redeemed and the redemption price shall equal the number (multiplied by
the Conversion Factor) of shares of beneficial interest the General Partner redeems and the
redemption price at which the General Partner redeems such shares, respectively.



 









 





ARTICLE X

BOOKS AND RECORDS; ACCOUNTING; TAX MATTERS




     10.01 Books and Records. At all times during the continuance of the Partnership, the
Partners shall keep or cause to be kept at the Partnership’s specified office true and complete
books of account in accordance with generally accepted accounting principles, including: (a) a
current list of the full name and last known business address of each Partner, (b) a copy of the
Certificate of Limited Partnership and all certificates of amendment thereto, (c) copies of the
Partnership’s federal, state and local income tax returns and reports, (d) copies of the Agreement
and any financial statements of the Partnership for the three most recent years and (e) all
documents and information required under the Act. Any Partner or its duly authorized
representative, upon paying the costs of collection, duplication and mailing, shall be entitled to
inspect or copy such records during ordinary business hours.



     10.02 Custody of Partnership Funds, Bank Accounts.



     (a) All funds of the Partnership not otherwise invested shall be deposited in one or more
accounts maintained in such banking or brokerage institutions as the General Partner shall
determine, and withdrawals shall be made only on such signature or signatures as the General
Partner may, from time to time, determine.



     (b) All deposits and other funds not needed in the operation of the business of the
Partnership may be invested by the General Partner in investment grade instruments (or investment
companies whose portfolio consists primarily thereof), government obligations, certificates of
deposit, bankers’ acceptances and municipal notes and bonds. The funds of the Partnership shall
not be commingled with the funds of any other Person except for such commingling as may necessarily
result from an investment in those investment companies permitted by this Section 10.02(b).



     10.03 Fiscal and Taxable Year. The fiscal and taxable year of the Partnership shall
be the calendar year.



     10.04 Annual Tax Information and Report. Within 75 days after the end of each fiscal
year of the Partnership, the General Partner shall furnish to each person who was a Limited Partner
at any time during such year the tax information necessary to file such Limited Partner’s
individual tax returns as shall be reasonably required by law.



     10.05 Tax Matters Partner, Tax Elections, Special Basis Adjustments.



     (a) The General Partner shall be the Tax Matters Partner of the Partnership within the meaning
of Section 6231(a)(7) of the Code. As Tax Matters Partner, the General Partner shall have the
right and obligation to take all actions authorized and required, respectively, by the Code for the
Tax Matters Partner. The General Partner shall have the right to retain professional assistance in
respect of any audit of the Partnership by the Service and all out-of-pocket expenses and fees
incurred by the General Partner on behalf of the Partnership as Tax Matters Partner shall
constitute Partnership expenses. In the event the General Partner receives notice of a final



 









 







Partnership adjustment under Section 6223(a)(2) of the Code, the General Partner shall either
(i) file a court petition for judicial review of such final adjustment within the period provided
under Section 6226(a) of the Code, a copy of which petition shall be mailed to all Limited Partners
on the date such petition is filed, or (ii) mail a written notice to all Limited Partners, within
such period, that describes the General Partner’s reasons for determining not to file such a
petition.



     (b) All elections required or permitted to be made by the Partnership under the Code or any
applicable state or local tax law shall be made by the General Partner in its sole and absolute
discretion.



     (c) In the event of a transfer of all or any part of the Partnership Interest of any Partner,
the Partnership, at the option of the General Partner, may elect pursuant to Section 754 of the
Code to adjust the basis of the Properties. Notwithstanding anything contained in Article V of
this Agreement, any adjustments made pursuant to Section 754 shall affect only the successor in
interest to the transferring Partner and in no event shall be taken into account in establishing,
maintaining or computing Capital Accounts for the other Partners for any purpose under this
Agreement. Each Partner will furnish the Partnership with all information necessary to give effect
to such election.



     10.06 Reports to Limited Partners.



     (a) As soon as practicable after the close of each fiscal quarter (other than the last quarter
of the fiscal year), the General Partner shall cause to be mailed to each Limited Partner a
quarterly report containing financial statements of the Partnership, or of the General Partner if
such statements are prepared solely on a consolidated basis with the General Partner, for such
fiscal quarter, presented in accordance with generally accepted accounting principles. As soon as
practicable after the close of each fiscal year, the General Partner shall cause to be mailed to
each Limited Partner an annual report containing financial statements of the Partnership, or of the
General Partner if such statements are prepared solely on a consolidated basis with the General
Partner, for such fiscal year, presented in accordance with generally accepted accounting
principles. The annual financial statements shall be audited by accountants selected by the
General Partner.



     (b) Any Partner shall further have the right to a private audit of the books and records of
the Partnership, provided such audit is made for Partnership purposes, at the expense of the
Partner desiring it and is made during normal business hours.



ARTICLE XI

AMENDMENT OF AGREEMENT; MERGER




     The General Partner’s consent shall be required for any amendment to this Agreement. The
General Partner, with the consent of the holders of a majority of the Partnership Units (including
the Partnership Units held by the General Partner or an Affiliate thereof) and the holders of a
majority of the Special Partnership Units, may amend this Agreement in any respect or merge or
consolidate the Partnership with or into



 









 




any other partnership or business entity (as defined in Section 17-211 of the Act) in a transaction
pursuant to Section 7.01(c), (d) or (e) hereof; provided, however, that the following amendments
and any other merger or consolidation of the Partnership shall require the consent of the holders
of a majority of the Partnership Units (excluding the Partnership Units held by the General Partner
or an Affiliate thereof):




     (a) any amendment affecting the operation of the Conversion Factor or the Exchange Right
(except as provided in Section 8.05(d) or 7.01(d) hereof) in a manner adverse to the Limited
Partners;



     (b) any amendment that would adversely affect the rights of the Limited Partners to receive
the distributions payable to them hereunder, other than with respect to the issuance of additional
Partnership Units pursuant to Section 4.02 hereof;



     (c) any amendment that would alter the Partnership’s allocations of Profit and Loss to the
Limited Partners, other than with respect to the issuance of additional Partnership Units pursuant
to Section 4.02 hereof; or



     (d) any amendment that would impose on the Limited Partners any obligation to make additional
Capital Contributions to the Partnership.



ARTICLE XII

GENERAL PROVISIONS




     12.01 Notices. All communications required or permitted under this Agreement shall be
in writing and shall be deemed to have been given when delivered personally or upon deposit in the
United States mail, registered, postage prepaid return receipt requested, to the Partners at the
addresses set forth in Exhibit A attached hereto; provided, however, that any Partner may
specify a different address by notifying the General Partner in writing of such different address.
Notices to the Partnership shall be delivered at or mailed to its specified office.



     12.02 Survival of Rights. Subject to the provisions hereof limiting transfers, this
Agreement shall be binding upon and inure to the benefit of the Partners and the Partnership and
their respective legal representatives, successors, transferees and assigns.



     12.03 Additional Documents. Each Partner agrees to perform all further acts and
execute, swear to, acknowledge and deliver all further documents which may be reasonable,
necessary, appropriate or desirable to carry out the provisions of this Agreement or the Act.



     12.04 Severability. If any provision of this Agreement shall be declared illegal,
invalid, or unenforceable in any jurisdiction, then such provision shall be deemed to be severable
from this Agreement (to the extent permitted by law) and in any event such illegality, invalidity
or unenforceability shall not affect the remainder hereof.



     12.05 Entire Agreement. This Agreement and exhibits attached hereto constitute the
entire Agreement of the Partners and supersede all prior written agreements and prior



 









 







and contemporaneous oral agreements, understandings and negotiations with respect to the subject
matter hereof.



     12.06 Pronouns and Plurals. When the context in which words are used in the Agreement
indicates that such is the intent, words in the singular number shall include the plural and the
masculine gender shall include the neuter or female gender as the context may require.



     12.07 Headings. The Article headings or sections in this Agreement are for
convenience only and shall not be used in construing the scope of this Agreement or any particular
Article.



     12.08 Counterparts. This Agreement may be executed in several counterparts, each of
which shall be deemed to be an original copy and all of which together shall constitute one and the
same instrument binding on all parties hereto, notwithstanding that all parties shall not have
signed the same counterpart.



     12.09 Governing Law. This Agreement shall be governed by and construed in accordance
with the laws of the State of Delaware provided, however, that causes of action for violations of
federal or state securities laws shall not be governed by this Section 12.09.



     IN WITNESS WHEREOF, the parties hereto have hereunder affixed their signatures to this
Agreement of Limited Partnership, all as of the 18th day of April, 2007.



[Signatures Appear on Following Page(s).]




 









 





	 	 	 	 	 
	 	GENERAL PARTNER:





WELLS TOTAL RETURN REIT, INC.

 	 
	 	By:  	/s/ Leo F. Wells, III
 	 
	 	Name:	 	Leo F. Wells, III 	 
	 	Title:	 	President 	 
	 



	 	 	 	 	 
	 	LIMITED PARTNER:





WELLS ASSET MANAGEMENT, INC.

 	 
	 	By:  	/s/ Leo F. Wells, III
 	 
	 	Name:	 	Leo F. Wells, III 	 
	 	Title:	 	President 	 
	 




 









 





EXHIBIT A




	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	Agreed	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	Value	 	 	 	 	 	 	 	 	 	 	 	 	 	 	Special	 
	 	 	 	 	 	 	of	 	 	 	 	 	 	 	 	 	 	Special 	 	 	Partnership	 
	 	 	Cash	 	 	Capital	 	 	Partnership	 	 	Percentage	 	 	 Partnership	 	 	Percentage	 
	General Partner	 	Contribution	 	 	Contribution	 	 	Units	 	 	Interest	 	 	Units	 	 	Interest	 
	Wells Total Return REIT, Inc.
	 	$ 200,000	 	 	$ 200,000	 	 	20,000	 	 	99%	 	 	0	 	 	0%	 
	6200 The Corners
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Parkway, Suite 250
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Norcross, Georgia 30092
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 







	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	Agreed	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	Value	 	 	 	 	 	 	 	 	 	 	 	 	 	 	Special	 
	 	 	 	 	 	 	of	 	 	 	 	 	 	 	 	 	 	Special	 	 	Partnership	 
	 	 	Cash	 	 	Capital	 	 	Partnership	 	 	Percentage	 	 	Partnership	 	 	Percentage	 
	Limited Partners	 	Contribution	 	 	Contribution	 	 	Units	 	 	Interest	 	 	Units	 	 	Interest	 
	Wells Asset Management, Inc.
	 	$ 3,000	 	 	$ 3,000	 	 	200	 	 	1%	 	 	100	 	 	100%	 
	6200 The Corners
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Parkway, Suite 250
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Norcross, Georgia 30092
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 







 









 





     The parties hereto hereby execute this counterpart to the Agreement of Limited
Partnership or Wells Total Return Operating Partnership, L.P., dated as of April 18, 2007.



	 	 	 	 	 
	 	GENERAL PARTNER:





WELLS TOTAL RETURN REIT, INC.

 	 
	 	By:  	/s/ Douglas P. Williams
 	 
	 	Name:	 	Douglas P. Williams 	 
	 	Title:	 	Executive Vice President, Secretary and Treasurer 	 
	 
	 
	 	LIMITED PARTNER:





WELLS ASSET MANAGEMENT ADVISORS, LLC

 	 
	 	By:  	/s/ David H. Steinwedell
 	 
	 	Name:	 	David H. Steinwedell 	 
	 	Title:	 	President 	 
	 




 









 





EXHIBIT A




	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	Agreed	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	Value	 	 	 	 	 	 	 	 	 	 	 	 	 	 	Special	 
	 	 	 	 	 	 	of	 	 	 	 	 	 	 	 	 	 	Special	 	 	Partnership	 
	 	 	Cash	 	 	Capital	 	 	Partnership	 	 	Percentage	 	 	Partnership	 	 	Percentage	 
	General Partner	 	Contribution	 	 	Contribution	 	 	Units	 	 	Interest	 	 	Units	 	 	Interest	 
	Wells Total Return REIT, Inc.
	 	$ 200,000	 	 	$ 200,000	 	 	20,000	 	 	99%	 	 	0	 	 	0%	 
	6200 The Corners Parkway
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Suite 250
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Norcross, Georgia 30092
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 







	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	Agreed	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	Value	 	 	 	 	 	 	 	 	 	 	 	 	 	 	Special	 
	 	 	 	 	 	 	of	 	 	 	 	 	 	 	 	 	 	Special	 	 	Partnership	 
	 	 	Cash	 	 	Capital	 	 	Partnership	 	 	Percentage	 	 	Partnership	 	 	Percentage	 
	Limited Partners	 	Contribution	 	 	Contribution	 	 	Units	 	 	Interest	 	 	Units	 	 	Interest	 
	Wells Asset Management
	 	$ 0	 	 	$ 3,000	 	 	200	 	 	1%		 	100	 	 	100%	 
	Advisors, LLC
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	6200 The Corners Parkway,
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Suite 250
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Norcross, Georgia 30092
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 







 









 





EXHIBIT B

NOTICE OF EXERCISE OF REDEMPTION RIGHT




     In accordance with Section 8.05 of the Agreement of Limited Partnership (the “Agreement”) of
Wells Total Return Operating Partnership, L.P., the undersigned hereby irrevocably (i) presents for
redemption                      Partnership Units in Wells Total Return Operating Partnership, L.P. in
accordance with the terms of the Agreement and the Redemption Right referred to in Section 8.05
thereof, (ii) surrenders such Partnership Units and all right, title and interest therein, and
(iii) directs that the Cash Amount or REIT Shares Amount (as defined in the Agreement) as
determined by the General Partner deliverable upon exercise of the Redemption Right be delivered to
the address specified below , and if REIT Shares (as defined in the Agreement) are to be delivered,
such REIT Shares be registered or placed in the name(s) and at the address(es) specified below.



	 	 	 	 	 
	Dated:

	 	                    ,                     	 	 
	 
	 	 	 	 
	 

	 	Name of Limited Partner:	 	 
	 
	 	 	 	 
	 

	 	 

	 	 
	 
	 	 	 	 
	 

	 	(Signature of Limited Partner)	 	 
	 
	 	 	 	 
	 

	 	 

	 	 
	 
	 	 	 	 
	 

	 	(Mailing Address)	 	 
	 
	 	 	 	 
	 

	 	 

	 	 
	 
	 	 	 	 
	 

	 	(City) (State)(Zip Code)	 	 
	 
	 	 	 	 
	 

	 	Signature Guaranteed by:	 	 
	 
	 	 	 	 
	 

	 	 

	 	 






If REIT Shares are to be issued, issue to:




Please insert social security or identifying number:




Name: