exv10w1






EXHIBIT 10.1




AMENDED AND RESTATED AGREEMENT OF LIMITED PARTNERSHIP




OF



Welsh Property Trust, L.P.



a Delaware limited partnership



THE SECURITIES EVIDENCED HEREBY HAVE NOT BEEN REGISTERED

UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), OR THE SECURITIES LAWS OF ANY

STATE AND MAY NOT BE SOLD,

TRANSFERRED OR OTHERWISE DISPOSED OF IN THE ABSENCE OF SUCH

REGISTRATION, UNLESS IN THE OPINION OF COUNSEL SATISFACTORY TO THE

PARTNERSHIP THE PROPOSED SALE, TRANSFER OR OTHER DISPOSITION MAY BE

EFFECTED WITHOUT REGISTRATION UNDER THE SECURITIES ACT AND UNDER

APPLICABLE STATE SECURITIES OR “BLUE SKY” LAWS.




dated as of [                    ], 20___



 









 





Table of Contents




	 	 	 	 	 
	 	 	Page	 
	ARTICLE 1 DEFINED TERMS
	 	 	1	 
	 
	 	 	 	 
	ARTICLE 2 ORGANIZATIONAL MATTERS
	 	 	18	 
	 
	 	 	 	 
	Section 2.1 Formation
	 	 	18	 
	Section 2.2 Name
	 	 	18	 
	Section 2.3 Registered Office and Agent; Principal Office
	 	 	18	 
	Section 2.4 Power of Attorney
	 	 	18	 
	Section 2.5 Term
	 	 	19	 
	 
	 	 	 	 
	ARTICLE 3 PURPOSE
	 	 	20	 
	 
	 	 	 	 
	Section 3.1 Purpose and Business
	 	 	20	 
	Section 3.2 Powers
	 	 	20	 
	Section 3.3 Partnership Only for Purposes Specified
	 	 	21	 
	Section 3.4 Representations and Warranties by the Partners
	 	 	21	 
	 
	 	 	 	 
	ARTICLE 4 CAPITAL CONTRIBUTIONS
	 	 	24	 
	 
	 	 	 	 
	Section 4.1 Capital Contributions of the Partners
	 	 	24	 
	Section 4.2 Issuances of Additional Partnership Interests
	 	 	24	 
	Section 4.3 Additional Funds and Capital Contributions
	 	 	25	 
	Section 4.4 Dividend Reinvestment Plan, Stock Incentive Plan or Other Plan
	 	 	27	 
	Section 4.5 No Interest; No Return
	 	 	27	 
	Section 4.6 Conversion or Redemption of Capital Shares
	 	 	27	 
	Section 4.7 Other Contribution Provisions
	 	 	27	 
	 
	 	 	 	 
	ARTICLE 5 DISTRIBUTIONS
	 	 	28	 
	 
	 	 	 	 
	Section 5.1 Requirement and Characterization of Distributions
	 	 	28	 
	Section 5.2 Distributions in Kind
	 	 	28	 
	Section 5.3 Amounts Withheld
	 	 	29	 
	Section 5.4 Distributions Upon Liquidation
	 	 	29	 
	Section 5.5 Distributions to Reflect Additional Partnership Units
	 	 	29	 
	Section 5.6 Restricted Distributions
	 	 	29	 
	 
	 	 	 	 
	ARTICLE 6 ALLOCATIONS
	 	 	29	 






i









 






Table of Contents

(continued)




	 	 	 	 	 
	 	 	Page	 
	Section 6.1 Timing and Amount of Allocations of Net Income and Net Loss
	 	 	29	 
	Section 6.2 General Allocations
	 	 	29	 
	Section 6.3 Additional Allocation Provisions
	 	 	31	 
	Section 6.4 Tax Allocations
	 	 	34	 
	 
	 	 	 	 
	ARTICLE 7 MANAGEMENT AND OPERATIONS OF BUSINESS
	 	 	34	 
	 
	 	 	 	 
	Section 7.1 Management
	 	 	34	 
	Section 7.2 Certificate of Limited Partnership
	 	 	38	 
	Section 7.3 Restrictions on Managing General Partner’s Authority
	 	 	38	 
	Section 7.4 Reimbursement of the Managing General Partner and the Special Limited
Partner
	 	 	40	 
	Section 7.5 Outside Activities of the Managing General Partner and the Special
Limited Partner
	 	 	41	 
	Section 7.6 Transactions with Affiliates
	 	 	41	 
	Section 7.7 Indemnification
	 	 	42	 
	Section 7.8 Liability of the Managing General Partner and the Special Limited
Partner
	 	 	44	 
	Section 7.9 Other Matters Concerning the Managing General Partner and the Special
Limited Partner
	 	 	46	 
	Section 7.10 Title to Partnership Assets
	 	 	47	 
	Section 7.11 Reliance by Third Parties
	 	 	47	 
	 
	 	 	 	 
	ARTICLE 8 RIGHTS AND OBLIGATIONS OF LIMITED PARTNERS
	 	 	48	 
	 
	 	 	 	 
	Section 8.1 Limitation of Liability
	 	 	48	 
	Section 8.2 Management of Business
	 	 	48	 
	Section 8.3 Outside Activities of Limited Partners
	 	 	48	 
	Section 8.4 Return of Capital
	 	 	49	 
	Section 8.5 Rights of Limited Partners Relating to the Partnership
	 	 	49	 
	Section 8.6 Partnership Right to Call Limited Partner Interests
	 	 	49	 
	 
	 	 	 	 
	ARTICLE 9 BOOKS, RECORDS, ACCOUNTING AND REPORTS
	 	 	50	 
	 
	 	 	 	 
	Section 9.1 Records and Accounting
	 	 	50	 






ii









 






Table of Contents

( continued)




	 	 	 	 	 
	 	 	Page	 
	Section 9.2 Partnership Year
	 	 	50	 
	Section 9.3 Reports
	 	 	50	 
	 
	 	 	 	 
	ARTICLE 10 TAX MATTERS
	 	 	51	 
	 
	 	 	 	 
	Section 10.1 Preparation of Tax Returns
	 	 	51	 
	Section 10.2 Tax Elections
	 	 	51	 
	Section 10.3 Tax Matters Partner
	 	 	51	 
	Section 10.4 Withholding
	 	 	52	 
	Section 10.5 Organizational Expenses
	 	 	53	 
	 
	 	 	 	 
	ARTICLE 11 PARTNER TRANSFERS AND WITHDRAWALS
	 	 	53	 
	 
	 	 	 	 
	Section 11.1 Transfer
	 	 	53	 
	Section 11.2 Transfer of Managing General Partner’s General Partnership Interest
	 	 	54	 
	Section 11.3 Limited Partners’ Rights to Transfer
	 	 	55	 
	Section 11.4 Substituted Limited Partners
	 	 	58	 
	Section 11.5 Assignees
	 	 	59	 
	Section 11.6 General Provisions
	 	 	59	 
	 
	 	 	 	 
	ARTICLE 12 ADMISSION OF PARTNERS
	 	 	61	 
	 
	 	 	 	 
	Section 12.1 Admission of Successor Managing General Partner and Additional General
Partners
	 	 	61	 
	Section 12.2 Admission of Additional Limited Partners
	 	 	61	 
	Section 12.3 Amendment of Agreement and Certificate of Limited Partnership
	 	 	62	 
	Section 12.4 Limit on Number of Partners
	 	 	62	 
	Section 12.5 Admission
	 	 	62	 
	 
	 	 	 	 
	ARTICLE 13 DISSOLUTION, LIQUIDATION AND TERMINATION
	 	 	63	 
	 
	 	 	 	 
	Section 13.1 Dissolution
	 	 	63	 
	Section 13.2 Winding Up
	 	 	63	 
	Section 13.3 Deemed Contribution and Distribution
	 	 	65	 
	Section 13.4 Rights of Holders
	 	 	65	 
	Section 13.5 Notice of Dissolution
	 	 	66	 






iii









 






Table of Contents

(continued)




	 	 	 	 	 
	 	 	Page	 
	Section 13.6 Cancellation of Certificate of Limited Partnership
	 	 	66	 
	Section 13.7 Reasonable Time for Winding-Up
	 	 	66	 
	 
	 	 	 	 
	ARTICLE 14 PROCEDURES FOR ACTIONS AND CONSENTS OF PARTNERS;
AMENDMENTS; MEETINGS
	 	 	66	 
	 
	 	 	 	 
	Section 14.1 Procedures for Actions and Consents of Partners
	 	 	66	 
	Section 14.2 Amendments
	 	 	66	 
	Section 14.3 Meetings of the Partners
	 	 	67	 
	 
	 	 	 	 
	ARTICLE 15 GENERAL PROVISIONS
	 	 	67	 
	 
	 	 	 	 
	Section 15.1 Redemption Rights of Qualifying Parties
	 	 	67	 
	Section 15.2 Addresses and Notice
	 	 	71	 
	Section 15.3 Titles and Captions
	 	 	72	 
	Section 15.4 Pronouns and Plurals
	 	 	72	 
	Section 15.5 Further Action
	 	 	72	 
	Section 15.6 Binding Effect
	 	 	72	 
	Section 15.7 Waiver
	 	 	72	 
	Section 15.8 Counterparts
	 	 	73	 
	Section 15.9 Applicable Law; Consent to Jurisdiction; Waiver of Jury Trial
	 	 	73	 
	Section 15.10 Entire Agreement
	 	 	73	 
	Section 15.11 Invalidity of Provisions
	 	 	73	 
	Section 15.12 Limitation to Preserve REIT Qualification
	 	 	73	 
	Section 15.13 REIT Restrictions
	 	 	74	 
	Section 15.14 No Partition
	 	 	75	 
	Section 15.15 No Third-Party Rights Created Hereby
	 	 	75	 
	Section 15.16 No Rights as Stockholders
	 	 	76	 
	Section 15.17 Preparation of Agreement
	 	 	76	 
	EXHIBIT A            PARTNERS AND PARTNERSHIP UNITS
	 	 	1	 
	EXHIBIT B            EXAMPLES REGARDING ADJUSTMENT FACTOR
	 	 	1	 
	EXHIBIT C            NOTICE OF REDEMPTION
	 	 	1	 







iv












 





AMENDED AND RESTATED AGREEMENT OF LIMITED PARTNERSHIP

OF WELSH PROPERTY TRUST, L.P.




     THIS AMENDED AND RESTATED AGREEMENT OF LIMITED PARTNERSHIP OF WELSH PROPERTY TRUST, L.P. (the
“Partnership”), dated as of [                    ], 20___ (the “Agreement”), is made and entered into by and
among Welsh Property Trust, LLC, a Delaware limited liability company (the “Managing General
Partner”), Welsh Property Trust, Inc., a Maryland corporation (the “Special Limited Partner”), and
any additional limited partner or general partner that is admitted from time to time to the
Partnership and listed on Exhibit A attached hereto.



     WHEREAS, a Certificate of Limited Partnership of the Partnership was filed in the office of
the Secretary of State of the State of Delaware on December ___, 2009; and



     WHEREAS, the Managing General Partner and the Special Limited Partner entered into that
certain Agreement of Limited Partnership of the Partnership dated as of December ___, 2009 (the
“Original Agreement”); and



     WHEREAS, the Managing General Partner and the Special Limited Partner desire to amend and
restate the Original Agreement, as hereinafter set forth, and to admit additional Partners (as
hereinafter defined) to the Partnership; and



     WHEREAS, the Partners desire to enter into this Agreement.



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



ARTICLE 1

DEFINED TERMS




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



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



     “Actions” has the meaning set forth in Section 7.7 hereof.



     “Additional Funds” has the meaning set forth in Section 4.3.A hereof.



     “Additional General Partner” means a Person who is admitted to the Partnership as a General
Partner pursuant to Section 4.2 and Section 12.1 hereof and who is shown as such on the books and
records of the Partnership.



     “Additional Limited Partner” means a Person who is admitted to the Partnership as a Limited
Partner pursuant to Section 4.2 and Section 12.2 hereof and who is shown as such on the books and
records of the Partnership.



 









 





     “Adjusted Available Cash” means, as of any date of determination, the sum of Available Cash
and REIT Available Cash.



     “Adjusted Capital Account Deficit” means, with respect to any Partner, the deficit balance, if
any, in such Person’s Capital Account as of the end of the relevant Partnership Year, after giving
effect to the following adjustments:



     (i) decrease such deficit by any amounts that such Person is obligated to restore pursuant to
this Agreement or by operation of law upon liquidation of such Partner’s Partnership Interest or
that such Person is deemed to be obligated to restore pursuant to the penultimate sentence of each
of Regulations Sections 1.704-2(g)(1) and 1.704-2(i)(5); and



     (ii) increase such deficit by the items described in Regulations Section
1.704-1(b)(2)(ii)(d)(4), (5) and (6).


The foregoing definition of “Adjusted Capital Account Deficit” is intended to comply with the
provisions of Regulations Section 1.704-1(b)(2)(ii)(d) and shall be interpreted consistently
therewith.




     “Adjustment Factor” means 1.0; provided, however, that in the event that:



     (i) the Special Limited Partner (a) 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, (b) splits or subdivides its outstanding REIT Shares or (c) effects a reverse stock split
or otherwise combines its outstanding REIT Shares into a smaller number of REIT Shares, the
Adjustment Factor shall be adjusted by multiplying the Adjustment Factor previously in effect by a
fraction, (i) the numerator of which shall be the number of REIT Shares issued and outstanding on
the record date for such dividend, distribution, split, subdivision, reverse split or combination
(assuming for such purposes that such dividend, distribution, split, subdivision, reverse split or
combination has occurred as of such time) and (ii) the denominator of which shall be the actual
number of REIT Shares (determined without the above assumption) issued and outstanding on the
record date for such dividend, distribution, split, subdivision, reverse split or combination;



     (ii) the Special Limited Partner distributes any rights, options or warrants to all holders
of its REIT Shares to subscribe for or to purchase or to otherwise acquire REIT Shares, or other
securities or rights convertible into, exchangeable for or exercisable for REIT Shares (other than
REIT Shares issuable pursuant to a Qualified DRIP), at a price per share less than the Value of a
REIT Share on the record date for such distribution (each a “Distributed Right”), then the
Adjustment Factor shall be adjusted by multiplying the Adjustment Factor previously in effect by a
fraction (a) the numerator of which shall be the number of REIT Shares issued and outstanding on
the record date plus the maximum number of REIT Shares purchasable under such Distributed Rights
and (b) the denominator of which shall be the number of REIT Shares issued and outstanding on the
record date plus a fraction (1) the numerator of which is the maximum number of REIT Shares
purchasable under such Distributed Rights times the minimum purchase price per REIT Share under
such Distributed Rights and (2) the denominator of which is the Value of a REIT Share as of the
record date; provided, however, that, if any such



2









 




Distributed Rights expire or become no longer exercisable, then the Adjustment Factor shall be
adjusted, effective retroactive to the date of distribution of the Distributed Rights, to reflect a
reduced maximum number of REIT Shares or any change in the minimum purchase price for the purposes
of the above fraction; and




     (iii) the Special Limited Partner shall, by dividend or otherwise, distribute to all holders
of its REIT Shares evidences of its indebtedness or assets (including securities, but excluding any
dividend or distribution referred to in subsection (i) above), which evidences of indebtedness or
assets relate to indebtedness or assets not received by the Managing General Partner and/or the
Special Limited Partner pursuant to a pro rata distribution by the Partnership, then the Adjustment
Factor shall be adjusted to equal the amount determined by multiplying the Adjustment Factor in
effect immediately prior to the close of business as of the record date by a fraction (a) the
numerator of which shall be such Value of a REIT Share as of the record date and (b) the
denominator of which shall be the Value of a REIT Share as of the record date less the then fair
market value (as determined by the Managing General Partner, whose determination shall be
conclusive) of the portion of the evidences of indebtedness or assets so distributed applicable to
one REIT Share.


Any adjustments to the Adjustment Factor shall become effective immediately after such event,
retroactive to the record date, if any, for such event. For illustrative purposes, examples of
adjustments to the Adjustment Factor are set forth on Exhibit B attached hereto.




     “Affiliate” means, with respect to any Person, any Person directly or indirectly controlling
or controlled by or under common control with such Person. For the purposes of this definition,
“control” when used with respect to any Person means the possession, directly or indirectly, of the
power to direct or cause the direction of the management and policies of such Person, whether
through the ownership of voting securities, by contract or otherwise, and the terms “controlling”
and “controlled” have meanings correlative to the foregoing.



     “Affiliated REIT” means the Special Limited Partner and any Affiliate of the Special Limited
Partner that has elected to be taxed as a REIT under the Code.



     “Agreement” means this Amended and Restated Agreement of Limited Partnership of Welsh Property
Trust, L.P., as now or hereafter amended, restated, modified, supplemented or replaced.



     “Applicable Percentage” has the meaning set forth in Section 15.1.B hereof.



     “Appraisal” means, with respect to any assets, the written opinion of an independent third
party experienced in the valuation of similar assets, selected by the Managing General Partner in
good faith. Such opinion may be in the form of an opinion by such independent third party that the
value for such property or asset as set by the Managing General Partner is fair, from a financial
point of view, to the Partnership.



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



3









 





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




(i) the sum, without duplication, of:




     (1) the Partnership’s Net Income or Net Loss (as the case may be) for such period,




     (2) Depreciation and all other noncash charges to the extent deducted in determining
Net Income or Net Loss for such period,




     (3) the amount of any reduction in reserves of the Partnership referred to in clause
(ii)(6) below (including, without limitation, reductions resulting because the Managing
General Partner determines such amounts are no longer necessary),




     (4) the excess, if any, of the net cash proceeds from the sale, exchange, disposition,
financing or refinancing of Partnership property for such period over the gain (or loss, as
the case may be) recognized from such sale, exchange, disposition, financing or refinancing
during such period (excluding Terminating Capital Transactions), and




     (5) all other cash received (including amounts previously accrued as Net Income and
amounts of deferred income) or any net amounts borrowed by the Partnership for such period
that was not included in determining Net Income or Net Loss for such period;




(ii) less the sum, without duplication, of:




     (1) all principal Debt payments made during such period by the Partnership,




     (2) capital expenditures made by the Partnership during such period,




     (3) investments in any entity (including loans made thereto) to the extent that such
investments are not otherwise described in clause (ii)(1) or clause (ii)(2) above,




     (4) all other expenditures and payments not deducted in determining Net Income or Net
Loss for such period (including amounts paid in respect of expenses previously accrued),




     (5) any amount included in determining Net Income or Net Loss for such period that was
not received by the Partnership during such period,




     (6) the amount of any increase in reserves (including, without limitation, working
capital reserves) established during such period that the Managing General Partner
determines are necessary or appropriate in its sole and absolute discretion,




     (7) any amount distributed or paid in redemption of any Limited Partner Interest or
Partnership Units, including, without limitation, any Cash Amount paid, and



4









 






     (8) the amount of any working capital accounts and other cash or similar balances
which the Managing General Partner determines to be necessary or appropriate in its sole and
absolute discretion.


Notwithstanding the foregoing, Available Cash shall not include (a) any cash received or reductions
in reserves, or take into account any disbursements made, or reserves established, after
dissolution and the commencement of the liquidation and winding up of the Partnership or (b) any
Capital Contributions, whenever received or any payments, expenditures or investments made with
such Capital Contributions.




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



     “Capital Account” means, with respect to any Partner, the Capital Account maintained by the
Managing General Partner for such Partner on the Partnership’s books and records in accordance with
the following provisions:



     (i) To each Partner’s Capital Account, there shall be added such Partner’s Capital
Contributions, such Partner’s distributive share of Net Income and any items in the nature of
income or gain that are specially allocated pursuant to Section 6.3 hereof, and the principal
amount of any Partnership liabilities assumed by such Partner or that are secured by any property
distributed to such Partner.



     (ii) From each Partner’s Capital Account, there shall be subtracted the amount of cash and
the Gross Asset Value of any property distributed to such Partner pursuant to any provision of this
Agreement, such Partner’s distributive share of Net Losses and any items in the nature of expenses
or losses that are specially allocated pursuant to Section 6.3 hereof, and the principal amount of
any liabilities of such Partner assumed by the Partnership or that are secured by any property
contributed by such Partner to the Partnership.



     (iii) In the event any interest in the Partnership is Transferred in accordance with the
terms of this Agreement, the transferee shall succeed to the Partner’s Capital Account of the
transferor to the extent that it relates to the Transferred interest.



     (iv) In determining the principal amount of any liability for purposes of subsections (i) and
(ii) hereof, there shall be taken into account Code Section 752(c) and any other applicable
provisions of the Code and Regulations.



     (v) The provisions of this Agreement relating to the maintenance of Capital Accounts are
intended to comply with Regulations promulgated under Section 704 of the Code, and shall be
interpreted and applied in a manner consistent with such Regulations. If the Managing General
Partner shall determine that it is prudent to modify the manner in which the Capital Accounts are
maintained in order to comply with such Regulations, the Managing General Partner may make such
modification provided that such modification will not have any effect on the amounts distributable
to any Partner or the timing of any distribution to such Partner without such Person’s consent. The
Managing General Partner also shall (a) make any adjustments that are necessary or appropriate to
maintain equality between the Capital Accounts of the Partners and



5









 




the amount of Partnership capital reflected on the Partnership’s balance sheet, as computed
for book purposes, in accordance with Regulations Section 1.704-1(b)(2)(iv)(q) and (b) make any
appropriate modifications in the event that unanticipated events might otherwise cause this
Agreement not to comply with Regulations Section 1.704-1(b) or Section 1.704-2; provided, however,
that such changes shall not reduce amounts otherwise distributable to the Partners as current cash
distributions or as distributions on termination of the Partnership or affect the timing of any
distribution to the Partners.




     “Capital Contribution” means, with respect to any Partner, the amount of money and the initial
Gross Asset Value of any Contributed Property that such Partner contributes to the Partnership
pursuant to Section 4.1, 4.2, or 4.3 hereof or is deemed to contribute pursuant to Section 4.4 or
4.5 hereof;



     “Capital Share” means a share of any class or series of capital stock of the Special Limited
Partner now or hereafter authorized or reclassified, other than a REIT Share.



     “Cash Amount” means an amount of cash equal to the product of (i) the Value of a REIT Share
and (ii) the REIT Shares Amount determined as of the applicable Valuation Date.



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



     “Charity” means an entity described in Section 501(c)(3) of the Code or any trust all the
beneficiaries of which are such entities.



     “Charter” means the charter of the Special Limited Partner, as in effect from time to time.



     “Closing Date” means the date of the closing of the initial public offering of REIT Shares.



     “Closing Price” has the meaning set forth in the definition of “Value.”



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



     “Consent” means the consent to, approval of, or vote in favor of a proposed action by a
Partner given in accordance with Article 14 hereof.



     “Consent of the Partners” means the Consent of the Managing General Partner and the Consent of
a Majority in Interest of the Partners, which Consent shall be obtained prior to the taking of any
action for which it is required by this Agreement and, except as otherwise provided in this
Agreement, may be given or withheld by the General Partners or the Limited Partners in their sole
and absolute discretion; provided, however, that if any such action affects only certain classes or
series of Partnership Units, “Consent of the Partners” means the Consent of a Majority in Interest
of the affected classes or series of Partnership Units.



6









 





     “Consent of the Limited Partners” means the Consent of a Majority in Interest of the Limited
Partners, which Consent shall be obtained prior to the taking of any action for which it is
required by this Agreement and, except as otherwise provided in this Agreement, may be given or
withheld by each Limited Partner in its sole and absolute discretion.



     “Contributed Property” means each Property or other asset, in such form as may be permitted by
the Act, but excluding cash, contributed or deemed contributed to the Partnership (or deemed
contributed by the Partnership to a “new” partnership pursuant to Code Section 708).



     “Controlled Entity” means, as to any Partner, (a) any corporation more than fifty percent
(50%) of the outstanding voting stock of which is owned by such Partner or such Partner’s Family
Members or Affiliates, other Partners or other Partners’ Family Members or Affiliates, (b) any
trust, whether or not revocable, of which such Partner or such Partner’s Family Members or
Affiliates are the sole beneficiaries, (c) any partnership of which such Partner or other Partners
or their respective Affiliates are the managing partners and in which such Partner, such Partner’s
Family Members or Affiliates, other Partners or other Partners’ Family Members or Affiliates hold
partnership interests representing at least twenty-five percent (25%) of such partnership’s capital
and profits and (d) any limited liability company of which such Partner, other Partners or their
respective Affiliates are the managers and in which such Partner, such Partner’s Family Members or
Affiliates, other Partners or such other Partners’ Family Members or Affiliates hold membership
interests representing at least twenty-five percent (25%) of such limited liability company’s
capital and profits.



     “Cut-Off Date” means the fifth (5th) Business Day after the Managing General
Partner’s receipt of a Notice of Redemption.



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



     “Depreciation” means, for each Partnership Year or other applicable period, an amount equal to
the Federal income tax depreciation, amortization or other cost recovery deduction allowable with
respect to an asset for such year or other period, except that if the Gross Asset Value of an asset
differs from its adjusted basis for Federal income tax purposes at the beginning of such year or
period, Depreciation shall be in an amount that bears the same ratio to such beginning Gross Asset
Value as the Federal income tax depreciation, amortization or other cost recovery deduction for
such year or other period bears to such beginning adjusted tax basis; provided, however, that if
the Federal income tax depreciation, amortization or other cost recovery deduction for such year or
period is zero, Depreciation shall be determined with



7









 




reference to such beginning Gross Asset Value using any reasonable method selected by the
Managing General Partner.




     “Distributed Right” has the meaning set forth in the definition of “Adjustment Factor.”



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



     “Exchange Act” means the Securities Exchange Act of 1934, as amended, and the rules and
regulations of the SEC promulgated thereunder.



     “Family Members” means, as to a Person that is an individual, such Person’s spouse, ancestors,
descendants (whether by blood or by adoption or step-descendants by marriage), brothers and
sisters, nieces and nephews and inter vivos or testamentary trusts of which only such Person and
his or her spouse, ancestors, descendants (whether by blood or by adoption or step-descendants by
marriage), brothers and sisters and nieces and nephews are beneficiaries.



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



     “General Partner” means the Managing General Partner, and its successors and assigns, in its
capacity as a general partner of the Partnership and any Additional General Partner.



     “General Partner Interest” means the Partnership Interest held by a General Partner hereof,
which Partnership Interest is an interest as a general partner under the Act. A General Partner
Interest may be expressed as a number of Partnership Common Units, Partnership Preferred Units or
any other Partnership Units.



     “General Partner Loan” has the meaning set forth in Section 4.3.D hereof.



     “Gross Asset Value” means, with respect to any asset, the asset’s adjusted basis for Federal
income tax purposes, except as follows:




     (a) The initial Gross Asset Value of any asset contributed by a Partner to the
Partnership shall be the gross fair market value of such asset as determined by the Managing
General Partner and agreed to by the contributing Person.




     (b) The Gross Asset Values of all Partnership assets immediately prior to the
occurrence of any event described in clause (i), clause (ii), clause (iii), clause (iv) or
clause (v) hereof shall be adjusted to equal their respective gross fair market values, as
determined by the Managing General Partner using such reasonable method of valuation as it
may adopt, as of the following times:



     (i) the acquisition of an additional interest in the Partnership (other than in connection
with the execution of this Agreement but including, without limitation, acquisitions pursuant to
Section 4.2 hereof or contributions or deemed contributions by the Managing General Partner
pursuant to Section 4.2 hereof) by a new or existing Partner in exchange for more than a de minimis
Capital Contribution, if the Managing General Partner reasonably determines that such



8









 




adjustment is necessary or appropriate to reflect the relative economic interests of the
Partners in the Partnership;




     (ii) the distribution by the Partnership to a Partner of more than a de minimis amount of
Partnership property as consideration for an interest in the Partnership if the Managing General
Partner reasonably determines that such adjustment is necessary or appropriate to reflect the
relative economic interests of the Partners in the Partnership;



     (iii) the liquidation of the Partnership within the meaning of Regulations Section
1.704-1(b)(2)(ii)(g);



     (iv) upon the admission of a successor Managing General Partner pursuant to Section 12.1
hereof; and



     (v) at such other times as the Managing General Partner shall reasonably determine necessary
or advisable in order to comply with Regulations Sections 1.704-1(b) and 1.704-2.




     (c) The Gross Asset Value of any Partnership asset distributed to a Partner shall be
the gross fair market value of such asset on the date of distribution as determined by the
distributee and the Managing General Partner; provided, however, that if the distributee is
the Managing General Partner or if the distributee and the Managing General Partner cannot
agree on such a determination, such gross fair market value shall be determined by
Appraisal.




     (d) The Gross Asset Values of Partnership assets shall be increased (or decreased) to
reflect any adjustments to the adjusted basis of such assets pursuant to Code Section 734(b)
or Code Section 743(b), but only to the extent that such adjustments are taken into account
in determining Capital Accounts pursuant to Regulations Section 1.704-1(b)(2)(iv)(m);
provided, however, that Gross Asset Values shall not be adjusted pursuant to this subsection
(d) to the extent that the Managing General Partner reasonably determines that an adjustment
pursuant to subsection (b) above is necessary or appropriate in connection with a
transaction that would otherwise result in an adjustment pursuant to this subsection (d).




     (e) If the Gross Asset Value of a Partnership asset has been determined or adjusted
pursuant to subsection (a), subsection (b) or subsection (d) above, such Gross Asset Value
shall thereafter be adjusted by the Depreciation taken into account with respect to such
asset for purposes of computing Net Income and Net Losses.



     “Holder” means either (a) a Partner or (b) an Assignee owning a Partnership Unit.



     “Incapacity” or “Incapacitated” means: (i) as to any Partner who is an individual, death,
total physical disability or entry by a court of competent jurisdiction adjudicating such Partner
incompetent to manage his or her person or his or her estate; (ii) as to any Partner that is a
corporation or limited liability company, the filing of a certificate of dissolution, or its
equivalent, for the corporation or limited liability company or the revocation of its charter,
certificate of formation or equivalent organizational document; (iii) as to any Partner that is a
partnership, the dissolution and commencement of winding up of the partnership; (iv) as to any



9









 




Partner that is an estate, the distribution by the fiduciary of the estate’s entire interest
in the Partnership; (v) as to any trustee of a trust that is a Partner, the termination of the
trust (but not the substitution of a new trustee); or (vi) as to any Partner, the bankruptcy of
such Partner. For purposes of this definition, bankruptcy of a Partner shall be deemed to have
occurred when (a) the Partner commences a voluntary proceeding seeking liquidation, reorganization
or other relief of or against such Partner under any bankruptcy, insolvency or other similar law
now or hereafter in effect, (b) the Partner is adjudged as bankrupt or insolvent, or a final and
nonappealable order for relief under any bankruptcy, insolvency or similar law now or hereafter in
effect has been entered against the Partner, (c) the Partner executes and delivers a general
assignment for the benefit of the Partner’s creditors, (d) the Partner files an answer or other
pleading admitting or failing to contest the material allegations of a petition filed against the
Partner in any proceeding of the nature described in clause (b) above, (e) the Partner seeks,
consents to or acquiesces in the appointment of a trustee, receiver or liquidator for the Partner
or for all or any substantial part of the Partner’s properties, (f) any proceeding seeking
liquidation, reorganization or other relief under any bankruptcy, insolvency or other similar law
now or hereafter in effect has not been dismissed within one hundred twenty (120) days after the
commencement thereof, (g) the appointment without the Partner’s consent or acquiescence of a
trustee, receiver or liquidator has not been vacated or stayed within ninety (90) days of such
appointment, or (h) an appointment referred to in clause (g) above is not vacated within ninety
(90) days after the expiration of any such stay.




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



     “IRS” means the United States Internal Revenue Service.



     “Legal Requirements” has the meaning set forth in Section 7.3.C hereof.



     “Limited Partner” means the Special Limited Partner, the Original Limited Partners set forth
on Exhibit A originally attached to this Agreement, any Additional Limited Partner that is admitted
from time to time to the Partnership and is listed on Exhibit A attached hereto, as such Exhibit A
may be amended from time to time, and any Substituted Limited Partner, each shown as such in the
books and records of the Partnership, in such Person’s capacity as a limited partner of the
Partnership.



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



10









 





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



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



     “Majority in Interest of the Partners” means Partners holding, in the aggregate, Percentage
Interests that are greater than fifty percent (50%) of the aggregate Percentage Interests of all
Partners entitled to Consent to or withhold Consent from a proposed action.



     “Majority in Interest of the Limited Partners” means Limited Partners (other than the Special
Limited Partner and any Limited Partner fifty percent (50%) or more of whose equity is owned,
directly or indirectly, by the Managing General Partner or Special Limited Partner) holding, in the
aggregate, Percentage Interests that are greater than fifty percent (50%) of the aggregate
Percentage Interests of all such Limited Partners entitled to Consent to or withhold Consent from a
proposed action.



     “Managing General Partner” means Welsh Property Trust, LLC, a Delaware limited liability
company, and its successors and assigns, as the managing general partner of the Partnership, in its
capacity as managing general partner of the Partnership.



     “Market Price” has the meaning set forth in the definition of “Value.”



     “Net Income” or “Net Loss” means, for each Partnership Year of the Partnership, an amount
equal to the Partnership’s taxable income or loss for such year, determined in accordance with Code
Section 703(a) (for this purpose, all items of income, gain, loss or deduction required to be
stated separately pursuant to Code Section 703(a)(1) shall be included in taxable income or loss),
with the following adjustments:




     (a) Any income of the Partnership that is exempt from Federal income tax and not
otherwise taken into account in computing Net Income (or Net Loss) pursuant to this
definition of “Net Income” or “Net Loss” shall be added to (or subtracted from, as the case
may be) such taxable income (or loss);




     (b) Any expenditure of the Partnership described in Code Section 705(a)(2)(B) or
treated as a Code Section 705(a)(2)(B) expenditure pursuant to Regulations Section
1.704-1(b)(2)(iv)(i), and not otherwise taken into account in computing Net Income (or Net
Loss) pursuant to this definition of “Net Income” or “Net Loss,” shall be subtracted from
(or added to, as the case may be) such taxable income (or loss);




     (c) In the event the Gross Asset Value of any Partnership asset is adjusted pursuant
to subsection (b) or subsection (c) of the definition of “Gross Asset Value,” the amount of
such adjustment shall be taken into account as gain or loss from the disposition of such
asset for purposes of computing Net Income or Net Loss;




     (d) Gain or loss resulting from any disposition of property with respect to which gain
or loss is recognized for Federal income tax purposes shall be computed by reference to the
Gross Asset Value of the property disposed of, notwithstanding that the adjusted tax basis
of such property differs from its Gross Asset Value;



11









 






     (e) In lieu of the depreciation, amortization and other cost recovery deductions that
would otherwise be taken into account in computing such taxable income or loss, there shall
be taken into account Depreciation for such Partnership Year;




     (f) To the extent that an adjustment to the adjusted tax basis of any Partnership
asset pursuant to Code Section 734(b) or Code Section 743(b) is required pursuant to
Regulations Section 1.704-1(b)(2)(iv)(m)(4) to be taken into account in determining Capital
Accounts as a result of a distribution other than in liquidation of a Partner’s interest in
the Partnership, the amount of such adjustment shall be treated as an item of gain (if the
adjustment increases the basis of the asset) or loss (if the adjustment decreases the basis
of the asset) from the disposition of the asset and shall be taken into account for purposes
of computing Net Income or Net Loss; and




     (g) Notwithstanding any other provision of this definition of “Net Income” or “Net
Loss,” any item that is specially allocated pursuant to Section 6.3 hereof shall not be
taken into account in computing Net Income or Net Loss. The amounts of the items of
Partnership income, gain, loss or deduction available to be specially allocated pursuant to
Section 6.3 hereof shall be determined by applying rules analogous to those set forth in
this definition of “Net Income” or “Net Loss.”



     “New Securities” means (i) any rights, options, warrants or convertible or exchangeable
securities having the right to subscribe for or purchase REIT Shares or Capital Shares or (ii) any
Debt issued by the Special Limited Partner that provides any of the rights described in clause (i).



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



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



     “Notice of Redemption” means the Notice of Redemption substantially in the form of Exhibit D
attached to this Agreement.



     “Original Limited Partners” means the Persons listed as the Limited Partners on Exhibit A
originally attached to this Agreement, without regard to any amendment thereto, and does not
include any Assignee or other transferee, including, without limitation, any Substituted Limited
Partner succeeding to all or any part of the Partnership Interest of any such Person.



     “Ownership Limit” means the restrictions on ownership and transfer of shares of the Special
Limited Partner’s stock imposed under the Charter.



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



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



12









 





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



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



     “Partnership” means the limited partnership formed and continued under the Act and pursuant to
this Agreement, and any successor thereto.



     “Partnership Common Unit” means a fractional, undivided share of the Partnership Interests of
all Partners authorized and issued pursuant to Sections 4.1 4.2 or 4.3 hereof, but does not include
any Partnership Preferred Unit or any other Partnership Unit specified in a Partnership Unit
Designation as being other than a Partnership Common Unit; provided, however, that the General
Partner Interest and the Limited Partner Interests shall have the differences in rights and
privileges as specified in this Agreement.



     “Partnership Employee” means an employee of the Partnership or an employee of a Subsidiary of
the Partnership, if any, acting in such capacity.



     “Partnership Interest” means an ownership interest in the Partnership held by either a Limited
Partner or a 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. A Partnership Interest
may be expressed as a number of Partnership Common Units, Partnership Preferred Units or other
Partnership Units.



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



     “Partnership Preferred Unit” means a fractional, undivided share of the Partnership Interests
that the Managing General Partner has authorized pursuant to Sections 4.1, 4.2 or 4.3 hereof that
has distribution rights, or rights upon liquidation, winding up and dissolution, that are superior
or prior to the Partnership Common Units.



     “Partnership Record Date” means the record date established by the Managing General Partner
for the distribution of Available Cash pursuant to Section 5.1 hereof, which record date shall
generally be the same as the record date established by the Special Limited Partner for a
distribution to its stockholders of some or all of its portion of such distribution.



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




13











 





     “Partnership Unit” means a Partnership Common Unit, a Partnership Preferred Unit or any
other partnership unit or fractional, undivided share of the Partnership Interests that the
Managing General Partner has authorized pursuant to Sections 4.1, 4.2 or 4.3 hereof.



     “Partnership Unit Designation” shall have the meaning set forth in Section 4.2.A hereof.



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



     “Percentage Interest” means, as to each Partner, its interest in the Partnership Units, as
determined by dividing the Partnership Units owned by such Partner by the aggregate number of
Partnership Units then outstanding.



     “Permitted Transfer” has the meaning set forth in Section 11.3.A hereof.



     “Person” means an individual or a corporation, partnership, trust, unincorporated
organization, association, limited liability company or other entity.



     “Pledge” has the meaning set forth in Section 11.3.A hereof.



     “Properties” means any assets and property of the Partnership such as, but not limited to,
interests in real property and personal property, including, without limitation, fee interests,
interests in ground leases, easements and rights of way, interests in limited liability companies,
joint ventures or partnerships, interests in mortgages, and Debt instruments as the Partnership may
hold from time to time and “Property” means any one such asset or property.



     “Publicly Traded” means having common equity securities listed or admitted to trading on any
U.S. national securities exchange.



     “Qualified DRIP” means a dividend reinvestment plan of the Special Limited Partner that
permits participants to acquire REIT Shares using the proceeds of dividends paid by the Special
Limited Partner; provided, however, that if such shares are offered at a discount, such discount
must (i) be designed to pass along to the stockholders of the Special Limited Partner the savings
enjoyed by the Special Limited Partner in connection with the avoidance of stock issuance costs,
and (ii) not exceed 5% of the value of a REIT Share as computed under the terms of such dividend
reinvestment plan.



     “Qualified Transferee” means an “accredited investor” as defined in Rule 501 promulgated under
the Securities Act.



     “Qualifying Party” means (a) a Limited Partner, (b) a Substituted Limited Partner; (c) an
Additional Limited Partner, (d) an Assignee, or (e) a Person, including a lending institution as
the pledgee of a Pledge, who is the transferee of a Limited Partner Interest in a Permitted
Transfer; provided, however, that a Qualifying Party shall not include the Special Limited Partner.



     “Redemption” has the meaning set forth in Section 15.1.A hereof.



14









 





     “Regulations” means the income tax regulations under the Code, whether such regulations are in
proposed, temporary or final form, as such regulations may be amended from time to time (including
corresponding provisions of succeeding regulations).



     “Regulatory Allocations” has the meaning set forth in Section 6.3.B(viii) hereof.



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



     “REIT Available Cash” means, as of any date of determination, all amounts which would be
available for distribution to the holders of REIT Shares (calculated in a manner substantially
similar to the manner in which the Partnership calculates Available Cash and without regard to any
distributions from or allocations by the Partnership to be made, or which have been made, to the
Managing General Partner and the Special Limited Partner hereunder and without regard to any
restriction on distribution imposed on the Managing General Partner by any third party).



     “REIT Partner” means (a) the Special Limited Partner or any Affiliate of the Special Limited
Partner to the extent such person has in place an election to qualify as a REIT and, (b) any
“qualified REIT subsidiary” (within the meaning of Code Section 856(i)(2)) of any such person.



     “REIT Payment” has the meaning set forth in Section 15.12 hereof.



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



     “REIT Share” means a share of common stock of the Special Limited Partner, par value $.01 per
share, (but shall not include any additional series or class of the Special Limited Partner’s
common stock created after the date of this Agreement).



     “REIT Shares Amount” means a number of REIT Shares equal to the product of (a) the number of
Tendered Units and (b) the Adjustment Factor; provided, however, that, in the event that the
Special Limited Partner issues to all holders of REIT Shares as of a certain record date rights,
options, warrants or convertible or exchangeable securities entitling the Special Limited Partner’s
stockholders to subscribe for or purchase REIT Shares, or any other securities or
property (collectively, the “Rights”), with the record date for such Rights issuance falling
within the period starting on the date of the Notice of Redemption and ending on the day
immediately preceding the Specified Redemption Date, which Rights will not be distributed before
the relevant Specified Redemption Date, then the REIT Shares Amount shall also include such Rights
that a holder of that number of REIT Shares would be entitled to receive, expressed, where relevant
hereunder, in a number of REIT Shares determined by the Special Limited Partner in good faith.



     “Related Party” means, with respect to any Person, any other Person whose ownership of shares
of the Special Limited Partner’s capital stock would be attributed to the first such Person under
Code Section 544 (as modified by Code Section 856(h)(1)(B)).



     “Rights” has the meaning set forth in the definition of “REIT Shares Amount.”



     “SEC” means the Securities and Exchange Commission.



15









 





     “Securities Act” means the Securities Act of 1933, as amended, and the rules and regulations
of the SEC promulgated thereunder.



     “Special Limited Partner” means Welsh Property Trust, Inc., a Maryland corporation.



     “Special Limited Partner Affiliate” means any other Limited Partners, from time to time, that
are Affiliates of Welsh Property Trust, LLC, each of which shall be designated as a “Special
Limited Partner Affiliate” on Exhibit A attached hereto, as amended from time to time, and shown as
such in the books and records of the Partnership.



     “Special Redemption” has the meaning set forth in Section 15.1.A hereof.



     “Specified Redemption Date” means the tenth (10th) Business Day after the Cut-Off Date;
provided, however, that no Specified Redemption Date shall occur during the Twelve-Month Period
(except pursuant to a Special Redemption).



     “Subsidiary” means, with respect to any Person, any corporation or other entity of which a
majority of (i) the voting power of the voting equity securities or (ii) the outstanding equity
interests is owned, directly or indirectly, by such Person; provided, however, that, with respect
to the Partnership, “Subsidiary” means solely a partnership or limited liability company (taxed,
for Federal income tax purposes, as a partnership and not as an association or publicly traded
partnership taxable as a corporation, including without limitation single member limited liability
companies) of which the Partnership is a member or any “taxable REIT subsidiary” in which the
Partnership owns shares of stock, unless the Managing General Partner has received an unqualified
opinion from independent counsel of recognized standing, or a ruling from the IRS, that the
ownership of shares of stock of a corporation or other entity (other than a “taxable REIT
subsidiary”) will not jeopardize the Special Limited Partner’s status as a REIT or any Special
Limited Partner Affiliate’s status as a “qualified REIT subsidiary” (within the meaning of Code
Section 856(i)(2)), in which event the term “Subsidiary” shall include the corporation or
other entity which is the subject of such opinion or ruling.



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



     “Tax Items” has the meaning set forth in Section 6.4.A hereof.



     “Tendered Units” has the meaning set forth in Section 15.1.A hereof.



     “Tendering Party” has the meaning set forth in Section 15.1.A hereof.



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



     “Transfer” means any sale, assignment, bequest, conveyance, devise, gift (outright or in
trust), Pledge, encumbrance, hypothecation, mortgage, exchange, transfer or other disposition or
act of alienation, whether voluntary, involuntary or by operation of law; provided, however, that



16









 




when the term is used in Article 11 hereof, “Transfer” does not include (a) any Redemption of
Partnership Common Units by the Partnership, or acquisition of Tendered Units by the Special
Limited Partner, pursuant to Section 15.1 hereof or (b) any redemption of Partnership Units
pursuant to any Partnership Unit Designation. The terms “Transferred” and “Transferring” have
correlative meanings.




     “Twelve-Month Period” means, as to any Partnership Common Units held by a Qualifying Party,
the twelve-month period ending on the day before the twelve-month anniversary of the date of the
issuance of such Partnership Common Units; provided, however, that the Managing General Partner
may, in its sole and absolute discretion, by written agreement with a Qualifying Party, shorten or
lengthen the Twelve-Month Period to a period of shorter or longer than twelve (12) months with
respect to any Partnership Common Units, other than any Partnership Common Units acquired by an
Original Limited Partner on the Closing Date.



     “Valuation Date” means the date of receipt by the Managing General Partner of a Notice of
Redemption pursuant to Section 15.1 herein, or such other date as specified herein, or, if such
date is not a Business Day, the immediately preceding Business Day.



     “Value” means, on any Valuation Date with respect to a REIT Share, the average of the daily
Market Prices for ten (10) consecutive trading days immediately preceding the Valuation Date. The
term “Market Price” on any date means, with respect to any class or series of outstanding REIT
Shares, the Closing Price for such REIT Shares on such date. The “Closing Price” on any date means
the last sale price for such REIT Shares, regular way, or, in case no such sale takes place on such
day, the average of the closing bid and asked prices, regular way,
for such REIT Shares, in either case as reported in the principal consolidated transaction
reporting system with respect to securities listed or admitted to trading on the New York Stock
Exchange or, if such REIT Shares are not listed or admitted to trading on the New York Stock
Exchange, as reported on the principal consolidated transaction reporting system with respect to
securities listed on the principal national securities exchange on which such REIT Shares are
listed or admitted to trading or, if such REIT Shares are not listed or admitted to trading on any
national securities exchange, the last quoted price, or, if not so quoted, the average of the high
bid and low asked prices in the over-the-counter market, as reported by the OTC Bulletin Board or,
if such system is no longer in use, the principal other automated quotation system that may then be
in use or, if such REIT Shares are not quoted by any such organization, the average of the closing
bid and asked prices as furnished by a professional market maker making a market in such REIT
Shares selected by the Board of Directors of the Special Limited Partner or, in the event that no
trading price is available for such REIT Shares, the fair market value of the REIT Shares, as
determined in good faith by the Board of Directors of the Special Limited Partner.



     In the event that the REIT Shares Amount includes Rights that a holder of REIT Shares would be
entitled to receive, then the Value of such Rights shall be determined by the Special Limited
Partner acting in good faith on the basis of such quotations and other information as it considers,
in its reasonable judgment, appropriate.



17









 





ARTICLE 2

ORGANIZATIONAL MATTERS




     Section 2.1 Formation. The Partnership is a limited partnership heretofore formed and
continued pursuant to the provisions of the Act and upon the terms and subject to the conditions
set forth in this Agreement. Except as expressly provided herein to the contrary, the rights and
obligations of the Partners and the administration and termination of the Partnership shall be
governed by the Act. The Partnership Interest of each Partner shall be personal property for all
purposes.



     Section 2.2 Name. The name of the Partnership is “Welsh Property Trust, L.P.” The
Partnership’s business may be conducted under any other name or names deemed advisable by the
Managing General Partner, including the name of the Managing General Partner or any Affiliate
thereof. The words “Limited Partnership,” “L.P.,” “Ltd.” or similar words or letters shall be
included in the Partnership’s name where necessary for the purposes of complying with the laws of
any jurisdiction that so requires. The Managing General Partner in its sole and absolute discretion
may change the name of the Partnership at any time and from time to time and shall notify the
Partners of such change in the next regular communication to the Partners.



     Section 2.3 Registered Office and Agent; Principal Office. The address of the registered
office of the Partnership in the State of Delaware is located at 160 Greentree Drive, Suite 101,
Dover, Kent County, DE 19904 and the registered agent for service of process on the Partnership in
the State of Delaware at such registered office is National Registered Agents, Inc.
The principal office of the Partnership is located at 4350 Baker Road, Suite 400, Minnetonka,
MN 55343-8695 or such other place as the Managing General Partner may from time to time designate
by notice to the Limited Partners. The Partnership may maintain offices at such other place or
places within or outside the State of Delaware as the Managing General Partner deems advisable.



     Section 2.4 Power of Attorney.



     A. Each Limited Partner and Assignee hereby irrevocably constitutes and appoints the Managing
General Partner, any Liquidator, and authorized officers and attorneys-in-fact of each, and each of
those acting singly, in each case with full power of substitution, as its true and lawful agent and
attorney-in-fact, with full power and authority in its name, place and stead to:




     (1) execute, swear to, seal, acknowledge, deliver, file and record in the appropriate
public offices: (a) all certificates, documents and other instruments (including, without
limitation, this Agreement and the Certificate and all amendments, supplements or
restatements thereof) that the Managing General Partner or the Liquidator deems appropriate
or necessary to form, qualify or continue the existence or qualification of the Partnership
as a limited partnership (or a partnership in which the limited partners have limited
liability to the extent provided by applicable law) in the State of Delaware and in all
other jurisdictions in which the Partnership may conduct business or own property; (b) all
instruments that the Managing General Partner or any Liquidator deems appropriate or
necessary to reflect any amendment, change, modification or restatement of this Agreement in
accordance with its terms; (c) all conveyances and other instruments



18









 






or documents that the
Managing General Partner or the Liquidator deems appropriate or necessary to reflect the
dissolution and liquidation of the Partnership pursuant to the terms of this Agreement,
including, without limitation, a certificate of cancellation; (d) all conveyances and other
instruments or documents that the Managing General Partner or the Liquidator deems
appropriate or necessary to reflect the distribution or exchange of assets of the
Partnership pursuant to the terms of this Agreement; (e) all instruments relating to the
admission, acceptance, withdrawal, removal or substitution of any Partner pursuant to the
terms of this Agreement or the Capital Contribution of any Partner; and (f) all
certificates, documents and other instruments relating to the determination of the rights,
preferences and privileges relating to Partnership Interests; and




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


Nothing contained herein shall be construed as authorizing the Managing General Partner or any
Liquidator to amend this Agreement except in accordance with Section 14.2 hereof or as may be
otherwise expressly provided for in this Agreement.




     B. The foregoing power of attorney is hereby declared to be irrevocable and a special power
coupled with an interest, in recognition of the fact that each of the Limited Partners and
Assignees will be relying upon the power of the Managing General Partner or the Liquidator to act
as contemplated by this Agreement in any filing or other action by it on behalf of the Partnership,
and it shall survive and not be affected by the subsequent Incapacity of any Limited Partner or
Assignee and the Transfer of all or any portion of such Person’s Partnership Units or Partnership
Interest (as the case may be) and shall extend to such Person’s heirs, successors, assigns and
personal representatives. Each such Limited Partner and Assignee hereby agrees to be bound by any
representation made by the Managing General Partner or the Liquidator, acting in good faith
pursuant to such power of attorney; and each such Limited Partner and Assignee hereby waives any
and all defenses that may be available to contest, negate or disaffirm the action of the Managing
General Partner or the Liquidator, taken in good faith under such power of attorney. Each Limited
Partner and Assignee shall execute and deliver to the Managing General Partner or the Liquidator,
within fifteen (15) days after receipt of the Managing General Partner’s or the Liquidator’s
request therefor, such further designation, powers of attorney and other instruments as the
Managing General Partner or the Liquidator (as the case may be) deems necessary to effectuate this
Agreement and the purposes of the Partnership. Notwithstanding anything else set forth in this
Section 2.4.B, no Limited Partner shall incur any personal liability for any action of the Managing
General Partner or the Liquidator taken under such power of attorney.



     Section 2.5 Term. The term of the Partnership commenced on December 18, 2009, the date that
the original Certificate was filed in the office of the Secretary of State of Delaware in
accordance with the Act, and shall continue indefinitely unless the Partnership is dissolved sooner
pursuant to the provisions of Article 13 hereof or as otherwise provided by law.



19









 





ARTICLE 3

PURPOSE




     Section 3.1 Purpose and Business. The purpose and nature of the Partnership is to conduct any
business, enterprise or activity permitted by or under the Act, including, without limitation, (i)
to conduct the business of ownership, construction, reconstruction, development, redevelopment,
alteration, improvement, maintenance, operation, sale, leasing, transfer, encumbrance, conveyance
and exchange of the Properties, (ii) to acquire and invest in any securities and/or loans relating
to the Properties, (iii) to enter into any partnership, joint venture, business trust arrangement,
limited liability company or other similar arrangement to engage in any business permitted by or
under the Act, or to own interests in any entity engaged in any business permitted by or under the
Act, (iv) to conduct the business of providing or engaging any or all of the following services or
activities: property and asset management, facilities
management, construction management, architectural, broker-dealer and brokerage services,
whether directly or through one or more partnerships, joint ventures, Subsidiaries, business
trusts, limited liability companies or similar arrangements, and (v) to do anything necessary or
incidental to the foregoing; provided, however, that such business and arrangements and interests
shall be limited to and conducted in such a manner (a) as to permit the Special Limited Partner, in
the sole and absolute discretion of the Special Limited Partner, at all times to be classified as a
REIT and to avoid paying taxes under Code Sections 857 or 4981, and (b) as will comply in all
material respects with the covenants, conditions and restrictions now or hereafter placed upon or
adopted by the Special Limited Partner pursuant to any agreement of the Special Limited Partner or
applicable laws and regulations. The Partnership shall have all powers necessary or desirable to
accomplish the purposes set forth above. In connection with the foregoing, the Partnership shall
have full power and authority to enter into, perform and carry out contracts of any kind, to borrow
and lend money and to issue evidence of indebtedness, whether or not secured by mortgage, deed of
trust, pledge or other lien and, directly or indirectly, to acquire and construct additional
Properties necessary, useful or desirable in connection with its business.



     Section 3.2 Powers.



     A. The Partnership shall be empowered to do any and all acts and things necessary,
appropriate, proper, advisable, incidental to or convenient for the furtherance and accomplishment
of the purposes and business described herein and for the protection and benefit of the
Partnership.



     B. The Partnership may contribute from time to time Partnership capital to one or more newly
formed entities solely in exchange for equity interests therein (or in a wholly owned subsidiary
entity thereof).



     C. Notwithstanding any other provision in this Agreement, the Managing General Partner shall
cause the Partnership not to take, or to refrain from taking, any action that, in the judgment of
the Managing General Partner, in its sole and absolute discretion, could (i) adversely affect the
ability of the Special Limited Partner to continue to qualify as a REIT, (ii) subject the Special
Limited Partner to any taxes under Code Section 857 or Code Section 4981 or any other related or
successor provision under the Code, (iii) violate any law or regulation of any governmental body or
agency having jurisdiction over the Special Limited Partner, its securities



20









 




or the Partnership or
(iv) violate in any material respect any of the covenants, conditions or restrictions now or
hereafter placed upon or adopted by the Special Limited Partner pursuant to any agreement of the
Special Limited Partner or applicable laws and regulations, unless, in any such case, such action
(or inaction) under clause (i), clause (ii), clause (iii) or clause (iv) above shall have been
specifically consented to by the Special Limited Partner.




     Section 3.3 Partnership Only for Purposes Specified. The Partnership shall be a limited
partnership only for the purposes specified in Section 3.1 hereof, and this Agreement shall not be
deemed to create a company, venture or partnership between or among the Partners
or any other Persons with respect to any activities whatsoever other than the activities
within the purposes of the Partnership as specified in Section 3.1 hereof. Except as otherwise
provided in this Agreement, no Partner shall have any authority to act for, bind, commit or assume
any obligation or responsibility on behalf of the Partnership, its properties or any other Partner.
No Partner, in its capacity as a Partner under this Agreement, shall be responsible or liable for
any indebtedness or obligation of another Partner, nor shall the Partnership be responsible or
liable for any indebtedness or obligation of any Partner, incurred either before or after the
execution and delivery of this Agreement by such Partner, except as to those responsibilities,
liabilities, indebtedness or obligations incurred pursuant to and as limited by the terms of this
Agreement and the Act.



     Section 3.4 Representations and Warranties by the Partners.



     A. Each Partner that is an individual (including, without limitation, each Additional Limited
Partner, Additional General Partner or Substituted Limited Partner as a condition to becoming an
Additional Limited Partner, Additional General Partner or Substituted Limited Partner) represents
and warrants to, and covenants with, each other Partner that (i) the consummation of the
transactions contemplated by this Agreement to be performed by such Partner will not result in a
breach or violation of, or a default under, any material agreement by which such Partner or any of
such Partner’s property is bound, or any statute, regulation, order or other law to which such
Partner is subject, (ii) such Partner does not, and for so long as it is Partner will not, own,
directly or indirectly, (a) five percent (5%) or more of the total combined voting power of all
classes of stock entitled to vote, or five percent (5%) or more of the total value of shares of all
classes of stock, of any corporation that is a tenant of either (I) the Special Limited Partner or
any “qualified REIT subsidiary” (within the meaning of Code Section 856(i)(2)) of the Special
Limited Partner, (II) the Partnership or (III) any partnership, venture or limited liability
company of which the Special Limited Partner, any “qualified REIT subsidiary” (within the meaning
of Code Section 856(i)(2)), with respect to the Special Limited Partner, or the Partnership is a
partner or member or (b) an interest of five percent (5%) or more in the assets or net profits of
any tenant of either (I) the Special Limited Partner or any “qualified REIT subsidiary” (within the
meaning of Code Section 856(i)(2)) of the Special Limited Partner, (II) the Partnership or (III)
any partnership, venture, or limited liability company of which the Special Limited Partner, any
“qualified REIT subsidiary” (within the meaning of Code Section 856(i)(2)), with respect to the
Special Limited Partner, or the Partnership is a partner or member, (iii) such Partner has the
legal capacity to enter into this Agreement and perform such Partner’s obligations hereunder, and
(iv) this Agreement is binding upon, and enforceable against, such Partner in accordance with its
terms. Notwithstanding the foregoing, each Partner that is an individual may exceed any of the five
percent (5%) limits set forth in clause (ii) of the



21









 




immediately preceding sentence; provided,
however, that the Partner obtains the written consent of the Managing General Partner prior to
exceeding any such limits, which consent the Managing General Partner may give or withhold in its
sole and absolute discretion; and provided, further, that in no event shall the Partner own,
directly or indirectly, ten percent (10%) or more of the stock described in clause (ii) (a) of the
immediately preceding sentence or ten
percent (10%) or more of the assets or net profits described in clause (ii) (b) of the
immediately preceding sentence. Each Partner that is an individual shall also represent and warrant
to the Partnership whether such Partner is a “foreign person” within the meaning of Code Section
1445(f) or a foreign partner within the meaning of Section 1446(e).




     B. Each Partner that is not an individual (including, without limitation, each Additional
Limited Partner, Additional General Partner or Substituted Limited Partner as a condition to
becoming an Additional Limited Partner or a Substituted Limited Partner) represents and warrants
to, and covenants with, each other Partner that (i) all transactions contemplated by this Agreement
to be performed by it have been duly authorized by all necessary action, including, without
limitation, that of its general partner(s), committee(s), members, managers, trustee(s),
beneficiaries, directors and/or stockholder(s) (as the case may be), as required, (ii) the
consummation of such transactions shall not result in a breach or violation of, or a default under,
its partnership or operating agreement, trust agreement, charter or bylaws (as the case may be),
any material agreement by which such Partner or any of such Partner’s properties or any of its
partners, members, managers, beneficiaries, trustees or stockholders (as the case may be) is or are
bound, or any statute, regulation, order or other law to which such Partner or any of its partners,
members, managers, trustees, beneficiaries or stockholders (as the case may be) is or are subject,
(iii) such Partner does not, and for so long as it is a Partner will not, own, directly or
indirectly, (a) five percent (5%) or more of the total combined voting power of all classes of
stock entitled to vote, or five percent (5%) or more of the total value of shares of all classes of
stock, of any corporation that is a tenant of either (I) the Special Limited Partner or any
“qualified REIT subsidiary” (within the meaning of Code Section 856(i)(2)), with respect to the
Special Limited Partner, (II) the Partnership or (III) any partnership, venture or limited
liability company of which the Special Limited Partner, any Special Limited Partner, any “qualified
REIT subsidiary” (within the meaning of Code Section 856(i)(2)), with respect to the Special
Limited Partner, or the Partnership is a partner or member or (b) an interest of five percent (5%)
or more in the assets or net profits of any tenant of either (I) the Special Limited Partner, or
any “qualified REIT subsidiary” (within the meaning of Code Section 856(i)(2)) with respect to the
Special Limited Partner, (II) the Partnership or (III) any partnership, venture or limited
liability company for which the Special Limited Partner, any Special Limited Partner, any
“qualified REIT subsidiary” (within the meaning of Code Section 856(i)(2)), with respect to the
Special Limited Partner, or the Partnership is a partner or member, and (iv) this Agreement is
binding upon, and enforceable against, such Partner in accordance with its terms. Notwithstanding
the foregoing, each Partner that is not an individual may exceed any of the five percent (5%)
limits set forth in clause (iii) of the immediately preceding sentence; provided, however, that the
Partner obtains the written consent of the Managing General Partner prior to exceeding any such
limits, which consent the Managing General Partner may give or withhold in its sole and absolute
discretion; and provided, further, that in no event shall the Partner own, directly or indirectly,
ten percent (10%) or more of the stock described in clause (iii) (a) of the immediately preceding
sentence or ten percent (10%) or more of the assets or net profits described in clause (iii) (b) of
the immediately preceding sentence. Each Partner that is not an individual shall also



22









 




represent and warrant to the Partnership whether such Partner is a “foreign person” within the
meaning of Code Section 1445(f) or a foreign partner within the meaning of Section 1446(e).




     C. Each Partner (including, without limitation, each Additional Limited Partner, each
Additional General Partner or Substituted Limited Partner as a condition to becoming an Additional
Limited Partner, Additional General Partner or a Substituted Limited Partner) represents, warrants
and agrees that it has acquired and continues to hold its interest in the Partnership for its own
account for investment purposes only and not for the purpose of, or with a view toward, the resale
or distribution of all or any part thereof in violation of applicable laws, and not with a view
toward selling or otherwise distributing such interest or any part thereof at any particular time
or under any predetermined circumstances in violation of applicable laws. Each Partner further
represents and warrants that it is a sophisticated investor, able and accustomed to handling
sophisticated financial matters for itself, particularly real estate investments, and that it has a
sufficiently high net worth that it does not anticipate a need for the funds that it has invested
in the Partnership in what it understands to be a highly speculative and illiquid investment.



     D. The representations and warranties contained in Sections 3.4.A, 3.4.B and 3.4.C hereof
shall survive the execution and delivery of this Agreement by each Partner (and, in the case of an
Additional Limited Partner, an Additional General Partner or a Substituted Limited Partner, the
admission of such Additional Limited Partner, Additional General Partner or Substituted Limited
Partner as a Partner in the Partnership) and the dissolution, liquidation and termination of the
Partnership.



     E. Each Partner (including, without limitation, each Additional Limited Partner, Additional
General Partner or Substituted Limited Partner as a condition to becoming an Additional Limited
Partner, Additional General Partner or a Substituted Limited Partner) hereby acknowledges that no
representations as to potential profit, cash flows, funds from operations or yield, if any, in
respect of the Partnership or the Managing General Partner have been made by any Partner or any
employee or representative or Affiliate of any Partner, and that projections and any other
information, including, without limitation, financial and descriptive information and
documentation, that may have been in any manner submitted to such Partner shall not constitute any
representation or warranty of any kind or nature, express or implied; provided that the foregoing
representation shall not constitute a waiver of any claim that such Partner may have against the
Managing General Partner, the Special Limited Partner or the Partnership or any other legal remedy
that such Partner may have.



     F. Notwithstanding the foregoing, the Managing General Partner may, in its sole and absolute
discretion, permit the modification of any of the representations and warranties contained in
Sections 3.4.A, 3.4.B and 3.4.C above as applicable to any Partner (including, without limitation
any Additional Limited Partner, Additional General Partner or Substituted Limited Partner or any
transferee of any of them), provided that such representations and warranties, as modified, shall
be set forth in either (i) a Partnership Unit Designation applicable
to the Partnership Units held by such Partner or (ii) a separate writing addressed to the
Partnership and the Managing General Partner.



23









 





ARTICLE 4

CAPITAL CONTRIBUTIONS




     Section 4.1 Capital Contributions of the Partners. The Partners have heretofore made Capital
Contributions to the Partnership. Each Partner owns Partnership Units in the amount set forth for
such Partner on Exhibit A, as the same may be amended from time to time by the Managing General
Partner to the extent necessary to reflect accurately sales, exchanges or other Transfers,
redemptions, Capital Contributions, the issuance of additional Partnership Units, or similar events
having an effect on a Partner’s ownership of Partnership Units. Except as provided by law or in
Sections 4.2, 4.3, or 10.4 hereof, the Partners shall have no obligation or, except with the prior
written consent of the Managing General Partner, right to make any additional Capital Contributions
or loans to the Partnership.



     Section 4.2 Issuances of Additional Partnership Interests.



     A. General. The Managing General Partner is hereby authorized to cause the Partnership to
issue 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 Managing General Partner
and the Special Limited Partner) or to other Persons, and to admit, subject to Article 12 hereof,
such Persons as Additional Limited Partners or as Additional General Partners, for such
consideration and on such terms and conditions as shall be established by the Managing General
Partner in its sole and absolute discretion, all without the approval of any Limited Partner.
Without limiting the foregoing, the Managing General Partner is expressly authorized to cause the
Partnership to issue Partnership Units (i) upon the conversion, redemption or exchange of any Debt,
Partnership Units, or other securities issued by the Partnership, (ii) for less than fair market
value, so long as the Managing General Partner concludes in good faith that such issuance is in the
best interests of the Managing General Partner and the Partnership, and (iii) in connection with
any merger of any other Person into the Partnership or any subsidiary of the Partnership if the
applicable merger agreement provides that Persons are to receive Partnership Units in exchange for
their interests in the Person merging into the Partnership or any subsidiary of the Partnership.
Any additional Partnership Interests 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, without limitation, rights, powers and duties
that may be senior or otherwise entitled to preference over existing Partnership Units) as shall be
determined by the Managing General Partner, in its sole and absolute discretion without the
approval of any Limited Partner, and set forth in a written document thereafter attached to and
made an exhibit to this Agreement, which exhibit shall be an amendment to this Agreement and shall
be incorporated herein by this reference (each, a “Partnership Unit Designation”), including, in
the event of the admission of an Additional General Partner, such rights, duties and obligations
for such Additional General Partner
hereunder as the Managing General Partner shall assign, delegate or permit such Additional
General Partner to exercise hereunder, in the sole and absolute discretion of the Managing General
Partner, without the approval of any Limited Partner. Without limiting the generality of the
foregoing, the Managing General Partner shall have authority to specify: (a) the allocations of
items of Partnership income, gain, loss, deduction and credit to each such class or series of
Partnership Interests; (b) the right of each such class or series of Partnership Interests to share
(on a pari passu, junior or preferred basis) in Partnership distributions; (c) the rights of each
such



24









 




class or series of Partnership Interests upon dissolution and liquidation of the Partnership;
(d) the voting rights, if any, of each such class or series of Partnership Interests; and (e) the
conversion, redemption or exchange rights applicable to each such class or series of Partnership
Interests. Upon the issuance of any additional Partnership Interest, the Managing General Partner
shall amend Exhibit A and the books and records of the Partnership as appropriate to reflect such
issuance.




     B. Issuances to General Partner or Special Limited Partner. No additional Partnership Units
shall be issued to any General Partner or the Special Limited Partner unless (i) the additional
Partnership Units are issued to all Partners in proportion to their respective Percentage
Interests, (ii) (a) the additional Partnership Units are (x) Partnership Common Units issued in
connection with an issuance of REIT Shares, or (y) Partnership Units (other than Partnership Common
Units) issued in connection with an issuance of Capital Shares, New Securities or other interests
in the Special Limited Partner (other than REIT Shares), which Capital Shares, New Securities or
other interests have designations, preferences and other rights, terms and provisions that are
substantially the same as the designations, preferences and other rights, terms and provisions of
the additional Partnership Units issued to the General Partner or the Special Limited Partner, and
(b) the Special Limited Partner directly or indirectly contributes to the Partnership the cash
proceeds or other consideration received in connection with the issuance of such REIT Shares,
Capital Shares, New Securities or other interests in the Special Limited Partner, (iii) the
additional Partnership Units are issued upon the conversion, redemption or exchange of Debt,
Partnership Units or other securities issued by the Partnership, or (iv) the additional Partnership
Units are issued pursuant to Section 4.3.B, Section 4.3.E or Section 4.4 or Section 4.5.



     C. No Preemptive Rights. No Person, including, without limitation, any Partner or Assignee,
shall have any preemptive, preferential, participation or similar right or rights to subscribe for
or acquire any Partnership Interest.



     Section 4.3 Additional Funds and Capital Contributions.



     A. General. The Managing General Partner may, at any time and from time to time, determine
that the Partnership requires additional funds (“Additional Funds”) for the acquisition or
development of additional Properties, for the redemption of Partnership Units or for such other
purposes as the Managing General Partner may determine, in its sole and absolute discretion.
Additional Funds may be obtained by the Partnership, at the election of the Managing
General Partner, in any manner provided in, and in accordance with, the terms of this Section
4.3 without the approval of any Limited Partner.



     B. Additional Capital Contributions. The Managing General Partner, on behalf of the
Partnership, may obtain any Additional Funds by accepting Capital Contributions from any Partners
or other Persons. In connection with any such Capital Contribution (of cash or property), the
Managing General Partner is hereby authorized to cause the Partnership from time to time to issue
additional Partnership Units (as set forth in Section 4.2 above) in consideration therefor and the
Percentage Interests of the General Partners and the Limited Partners shall be adjusted to reflect
the issuance of such additional Partnership Units.



25









 





     C. Loans by Third Parties. The Managing General Partner, on behalf of the Partnership, may
obtain any Additional Funds by causing the Partnership to incur Debt to any Person (other than the
Managing General Partner or the Special Limited Partner) upon such terms as the Managing General
Partner determines appropriate, including making such Debt convertible, redeemable or exchangeable
for Partnership Units; provided, however, that the Partnership shall not incur any such Debt if any
Partner would be personally liable for the repayment of such Debt (unless such Partner otherwise
agrees).



     D. General Partner and Special Limited Partner Loans. The Managing General Partner, on behalf
of the Partnership, may obtain any Additional Funds by causing the Partnership to incur Debt to the
Managing General Partner and/or the Special Limited Partner (each, a “General Partner Loan”) if (i)
such Debt is, to the extent permitted by law, on substantially the same terms and conditions
(including interest rate, repayment schedule, and conversion, redemption, repurchase and exchange
rights) as Funding Debt incurred by the Managing General Partner or the Special Limited Partner, as
applicable, the net proceeds of which are loaned to the Partnership to provide such Additional
Funds, or (ii) such Debt is on terms and conditions no less favorable to the Partnership than would
be available to the Partnership from any third party; provided, however, that the Partnership shall
not incur any such Debt if any Partner would be personally liable for the repayment of such Debt
(unless such Partner otherwise agrees).



     E. Issuance of Securities by the Special Limited Partner. The Special Limited Partner shall
not issue any additional REIT Shares, Capital Shares or New Securities unless the Special Limited
Partner contributes the cash proceeds or other consideration received from the issuance of such
additional REIT Shares, Capital Shares or New Securities (as the case may be) and from the exercise
of the rights contained in any such additional New Securities to the Partnership in exchange for
(x) in the case of an issuance of REIT Shares, Partnership Common Units, or (y) in the case of an
issuance of Capital Shares or New Securities, Partnership Units with designations, preferences and
other rights, terms and provisions that are substantially the same as the designations, preferences
and other rights, terms and provisions of such Capital Shares or New Securities; provided, however,
that notwithstanding the foregoing, the Special Limited Partner may issue REIT Shares, Capital
Shares or New Securities (a) pursuant to Section
4.4 or Section 15.1.B hereof, (b) pursuant to a dividend or distribution (including any stock
split) of REIT Shares, Capital Shares or New Securities to all of the holders of REIT Shares,
Capital Shares or New Securities (as the case may be), (c) upon a conversion, redemption or
exchange of Capital Shares, (d) upon a conversion, redemption, exchange or exercise of New
Securities, or (e) pursuant to share grants or awards made pursuant to any equity incentive plan of
the Special Limited Partner. In the event of any issuance of additional REIT Shares, Capital Shares
or New Securities by the Special Limited Partner, and the contribution to the Partnership, by the
Special Limited Partner, of the cash proceeds or other consideration received from such issuance,
if the cash proceeds actually received by the Special Limited Partner are less than the gross
proceeds of such issuance as a result of any underwriter’s discount or other expenses paid or
incurred in connection with such issuance, then the Special Limited Partner shall be deemed to have
made a Capital Contribution to the Partnership in the amount equal to the sum of the cash proceeds
of such issuance plus the amount of such underwriter’s discount and other expenses paid by the
Special Limited Partner (which discount and expense shall be treated as an expense for the benefit
of the Partnership for purposes of Section 7.4).



26









 





     Section 4.4 Dividend Reinvestment Plan, Stock Incentive Plan or Other Plan. Nothing in this
Agreement shall be construed or applied to preclude or restrain the Managing General Partner or the
Special Limited Partner from adopting, modifying or terminating stock incentive plans for the
benefit of employees, directors or other business associates of the Managing General Partner, the
Special Limited Partner, the Partnership or any of their Affiliates. The Partners acknowledge and
agree that, in the event that any such plan is adopted, modified or terminated by the Managing
General Partner or the Special Limited Partner, amendments to this Section 4.4 may become necessary
or advisable and that any approval or Consent to any such amendments requested by the Managing
General Partner or the Special Limited Partner shall be deemed granted by the Limited Partners.
Except as may otherwise be provided in this Article 4, all amounts received by the Special Limited
Partner in respect of any dividend reinvestment plan, stock incentive or other stock or
subscription plan or agreement, either (a) shall be utilized by the Special Limited Partner to
effect open market purchases of REIT Shares, or (b) if the Special Limited Partner elects instead
to issue new REIT Shares with respect to such amounts, shall be contributed by the Special Limited
Partner to the Partnership in exchange for additional Partnership Common Units. Upon such
contribution, the Partnership will issue to the Special Limited Partner a number of Partnership
Common Units equal in value to the product of (i) the Value as of the date of issuance of each REIT
Share so issued by the Special Limited Partner multiplied by (ii) the number of REIT Shares so
issued.



     Section 4.5 No Interest; No Return. No Partner shall be entitled to interest on its Capital
Contribution or on such Partner’s Capital Account. Except as provided herein or by law, no Partner
shall have any right to demand or receive the return of its Capital Contribution from the
Partnership.



     Section 4.6 Conversion or Redemption of Capital Shares.



     A. Conversion of Capital Shares. If, at any time, any of the Capital Shares are converted
into REIT Shares, in whole or in part, then a number of Partnership Units with designations,
preferences and other rights, terms and provisions that are substantially the same as the
designations, preferences and other rights, terms and provisions of such Capital Shares
(“Partnership Equivalent Units”) equal to the number of Capital Shares so converted shall
automatically be converted into a number of Partnership Common Units equal to (i) the number of
REIT Shares issued upon such conversion divided by (ii) the Adjustment Factor then in effect, and
the Percentage Interests of the General Partners and the Limited Partners (including the Special
Limited Partner) shall be adjusted to reflect such conversion.



     B. Redemption of Capital Shares. If, at any time, any Capital Shares or REIT Shares are
redeemed (whether by exercise of a put or call, automatically or by means of another arrangement)
by the Special Limited Partner for cash, the Partnership shall, immediately prior to such
redemption of Capital Shares, redeem an equal number of Partnership Equivalent Units held by the
Special Limited Partner upon the same terms and for the same price per Partnership Equivalent Unit
as such Capital Shares are redeemed.



     Section 4.7 Other Contribution Provisions. In the event that any Partner is admitted to the
Partnership and is given a Capital Account in exchange for services rendered to the Partnership,
such transaction shall be treated by the Partnership and the affected Partner as if the



27









 




Partnership
had compensated such Partner in cash and such Partner had contributed the cash that the Partner
would have received to the capital of the Partnership. In addition, with the consent of the
Managing General Partner, one or more Partners (including the Special Limited Partner) may enter
into contribution agreements with the Partnership which have the effect of providing a guarantee of
certain obligations of the Partnership.




ARTICLE 5

DISTRIBUTIONS




     Section 5.1 Requirement and Characterization of Distributions. Subject to the terms of any
Partnership Unit Designation, the Managing General Partner shall cause the Partnership to
distribute quarterly all, or such portion as the Managing General Partner may in its sole and
absolute discretion determine, of Available Cash generated by the Partnership during such quarter
to the Holders on the Partnership Record Date with respect to such quarter: (i) first, with respect
to any Partnership Units that are entitled to any preference in distribution, in accordance with
the rights of such class(es) of Partnership Units (and, within such class(es), among the Holders
pro rata in proportion to their respective Percentage Interests on such Partnership Record Date);
and (ii) second, with respect to any Partnership Units that are not entitled to any preference in
distribution, in accordance with the rights of such class of Partnership Units, as applicable (and,
within such class, among the Holders pro rata in proportion to their respective Percentage
Interests on such Partnership Record Date). Distributions payable with respect to any
Partnership Units that were not outstanding during the entire quarterly period in respect of
which any distribution is made shall be prorated based on the portion of the period that such
Partnership Units were outstanding. Notwithstanding the foregoing, the Managing General Partner, in
its sole and absolute discretion, may distribute Available Cash to the Holders on a more or less
frequent basis than quarterly and provide for an appropriate Partnership Record Date. The Managing
General Partner shall make such reasonable efforts, as determined by it in its sole and absolute
discretion and consistent with the Special Limited Partner’s qualification as a REIT, to cause the
Partnership to distribute sufficient amounts to enable the Special Limited Partner, for so long as
the Special Limited Partner has determined to qualify as a REIT, to make distributions that will
(a) satisfy the requirements for qualifying as a REIT under the Code and Regulations (the “REIT
Requirements”) and (b) except to the extent otherwise determined by the Special Limited Partner,
eliminate any Federal income or excise tax liability of the Special Limited Partner.



     Subject to the applicable Partner Unit Designation, each Limited Partner shall receive a pro
rata share of Distributions under this Article 5 in an amount equal to the distributions such
Limited Partner would have received if such Limited Partner held one REIT Share or one Capital
Share (bearing, in each case, the same designations as the actual Partnership Unit held by such
Limited Partner) for each of such Limited Partner’s Partnership Unit.



     Section 5.2 Distributions in Kind. No right is given to any Holder to demand and receive
property other than cash as provided in this Agreement. The Managing General Partner may determine,
in its sole and absolute discretion, to make a distribution in kind of Partnership assets to the
Holders, and such assets shall be distributed in such a fashion as to ensure that the fair market
value is distributed and allocated in accordance with Articles 5, 6 and 10 hereof; provided,
however, that the Managing General Partner shall not make a distribution in kind to



28









 




any Holder
unless the Holder has been given ninety (90) days prior written notice of such distribution.




     Section 5.3 Amounts Withheld. All amounts withheld pursuant to the Code or any provisions of
any state or local tax law and Section 10.4 hereof with respect to any allocation, payment or
distribution to any Holder shall be treated as amounts paid or distributed to such Holder pursuant
to Section 5.1 hereof for all purposes under this Agreement.



     Section 5.4 Distributions Upon Liquidation. Notwithstanding the other provisions of this
Article 5, net proceeds from a Terminating Capital Transaction, and any other cash received or
reductions in reserves made after commencement of the liquidation of the Partnership, shall be
distributed to the Holders in accordance with Section 13.2 hereof.



     Section 5.5 Distributions to Reflect Additional Partnership Units. In the event that the
Partnership issues additional Partnership Units pursuant to the provisions of Article 4 hereof, the
Managing General Partner is hereby authorized to make such revisions to this Article 5 as it
determines are necessary or desirable to reflect the issuance of such additional Partnership Units,
including, without limitation, making preferential distributions to certain classes of
Partnership Units.



     Section 5.6 Restricted Distributions. Notwithstanding any provision to the contrary contained
in this Agreement, neither the Partnership nor the Managing General Partner, on behalf of the
Partnership, shall make a distribution to any Holder if such distribution would violate Section
17-607 of the Act or other applicable law.



ARTICLE 6

ALLOCATIONS




     Section 6.1 Timing and Amount of Allocations of Net Income and Net Loss. Net Income and Net
Loss of the Partnership shall be determined and allocated with respect to each Partnership Year of
the Partnership as of the end of each such year, provided that the Managing General Partner may in
its discretion allocate Net Income and Net Loss for a shorter period as of the end of such period.
Except as otherwise provided in this Article 6, and subject to Section 11.6.C hereof, an allocation
to a Holder of a share of Net Income or Net Loss shall be treated as an allocation of the same
share of each item of income, gain, loss or deduction that is taken into account in computing Net
Income or Net Loss.



     Section 6.2 General Allocations. Subject to Section 6.3 and Section 11.6.C hereof, Net Income
and Net Loss shall be allocated to each of the Holders as follows:



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




     (i) First, to the holders of any Partnership Units that are entitled to any preference
in distribution in accordance with the rights of any other class of Partnership Units until
each such Partnership Unit has been allocated, on a cumulative basis pursuant to this
subparagraph (A)(i), Net Income equal to (x) the amount of distributions received which are
attributable to the preference of such class of Partnership Unit (and, within



29









 






such class,
pro rata in proportion to the respective Percentage Interests as of the last day of the
period for which such allocation is made); and (y) the cumulative Net Loss allocated to such
Partners under subparagraph (B)(ii);




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



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




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




     (ii) Second, with respect to classes of Partnership Units that are entitled to any
preference in distribution upon liquidation, in reverse order of the priorities of each such
class (and within each such class, pro rata in proportion to their respective Percentage
Interests) as of the last day of the period for which such allocation is being made;
provided that Net Loss shall not be allocated to any Partner pursuant to this
subparagraph (B)(ii) to the extent that such allocation would cause such Partner to have an
Adjusted Capital Account Deficit (or increase any existing Adjusted Capital Account
Deficit).



     For purposes of this Section 6.2, the Percentage Interests of the Holders of Partnership
Common Units shall be calculated based on a denominator equal to the aggregate Partnership Common
Units outstanding as of the date of determination.


It is intended that the provisions of this Article 6 satisfy the requirements of Section 704(b) of
the Code and the Regulations thereunder, and the Managing General Partner is authorized to make
adjustments to the allocation provisions set forth above to the extent the Managing General Partner
determines such adjustments to be necessary or appropriate to comply with Section 704(b) of the
Code and the Regulations thereunder (including to cause Capital Accounts attributable to
Partnership Common Units to be in proportion to their respective Percentage Interests); provided,
however, that in no event shall this sentence permit the Managing General Partner to adjust the
timing or amount of any distributions to the Partners.





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     Section 6.3 Additional Allocation Provisions. Notwithstanding the foregoing provisions of
this Article 6:



     A. Special Allocations Regarding Partnership Preferred Units. If any Partnership Preferred
Units are redeemed pursuant to Section 4.6.B hereof (treating a full liquidation of the Managing
General Partner’s General Partner Interest or of such Special Limited Partner’s Limited Partner
Interest for purposes of this Section 6.3.A as including a redemption of any then outstanding
Partnership Preferred Units pursuant to Section 4.6.B hereof), for the Partnership
Year that includes such redemption (and, if necessary, for subsequent Partnership Years) (a)
gross income and gain (in such relative proportions as the Managing General Partner in its
discretion shall determine) shall be allocated to the holder(s) of such Partnership Preferred Units
to the extent that the Redemption Amounts paid or payable with respect to the Partnership Preferred
Units so redeemed (or treated as redeemed) exceeds the aggregate Capital Account Balances (net of
liabilities assumed or taken subject to by the Partnership) per Partnership Preferred Unit
allocable to the Partnership Preferred Units so redeemed (or treated as redeemed) and (b)
deductions and losses (in such relative proportions as the Managing General Partner in its
discretion shall determine) shall be allocated to the holder(s) of such Partnership Preferred Units
to the extent that the aggregate Capital Account Balances (net of liabilities assumed or taken
subject to by the Partnership) per Partnership Preferred Unit allocable to the Partnership
Preferred Units so redeemed (or treated as redeemed) exceeds the Redemption Amount paid or payable
with respect to the Partnership Preferred Units so redeemed (or treated as redeemed).



     B. Regulatory Allocations.




     (i) Minimum Gain Chargeback. Except as otherwise provided in Regulations Section
1.704-2(f), notwithstanding the provisions of Section 6.2 hereof, or any other provision of
this Article 6, if there is a net decrease in Partnership Minimum Gain during any
Partnership Year, each Holder shall be specially allocated items of Partnership income and
gain for such year (and, if necessary, subsequent years) in an amount equal to such Holder’s
share of the net decrease in Partnership Minimum Gain, as determined under Regulations
Section 1.704-2(g). Allocations pursuant to the previous sentence shall be made in
proportion to the respective amounts required to be allocated to each Holder pursuant
thereto. The items to be allocated shall be determined in accordance with Regulations
Sections 1.704-2(f)(6) and 1.704-2(j)(2). This Section 6.3.B(i) is intended to qualify as a
“minimum gain chargeback” within the meaning of Regulations Section 1.704-2(f) and shall be
interpreted consistently therewith.




     (ii) Partner Minimum Gain Chargeback. Except as otherwise provided in Regulations
Section 1.704-2(i)(4) or in Section 6.3.B(i) hereof, if there is a net decrease in Partner
Minimum Gain attributable to a Partner Nonrecourse Debt during any Partnership Year, each
Holder who has a share of the Partner Minimum Gain attributable to such Partner Nonrecourse
Debt, determined in accordance with Regulations Section 1.704-2(i)(5), shall be specially
allocated items of Partnership income and gain for such year (and, if necessary, subsequent
years) in an amount equal to such Holder’s respective share of the net decrease in Partner
Minimum Gain attributable to such Partner Nonrecourse Debt, determined in accordance with
Regulations Section 1.704-2(i)(4). Allocations pursuant to the previous sentence shall be
made in proportion to the



31









 






respective amounts required to be allocated to each Holder
pursuant thereto. The items to be so allocated shall be determined in accordance with
Regulations Sections 1.704-2(i)(4) and 1.704-2(j)(2). This Section 6.3.B(ii) is intended to
qualify as a “chargeback of partner
nonrecourse debt minimum gain” within the meaning of Regulations Section 1.704-2(i) and
shall be interpreted consistently therewith.




     (iii) Nonrecourse Deductions and Partner Nonrecourse Deductions. Any Nonrecourse
Deductions for any Partnership Year shall be specially allocated to the Holders in
accordance with their respective Percentage Interests. Any Partner Nonrecourse Deductions
for any Partnership Year shall be specially allocated to the Holder(s) who bears the
economic risk of loss with respect to the Partner Nonrecourse Debt to which such Partner
Nonrecourse Deductions are attributable, in accordance with Regulations Section 1.704-2(i).




     (iv) Qualified Income Offset. If any Holder unexpectedly receives an adjustment,
allocation or distribution described in Regulations Section 1.704-1(b)(2)(ii)(d)(4), (5) or
(6), items of Partnership income and gain shall be allocated, in accordance with Regulations
Section 1.704-1(b)(2)(ii)(d), to such Holder in an amount and manner sufficient to
eliminate, to the extent required by such Regulations, the Adjusted Capital Account Deficit
of such Holder as quickly as possible, provided that an allocation pursuant to this Section
6.3.B(iv) shall be made if and only to the extent that such Holder would have an Adjusted
Capital Account Deficit after all other allocations provided in this Article 6 have been
tentatively made as if this Section 6.3.B(iv) were not in the Agreement. It is intended that
this Section 6.3.B(iv) qualify and be construed as a “qualified income offset” within the
meaning of Regulations Section 1.704-1(b)(2)(ii)(d) and shall be interpreted consistently
therewith.




     (v) Gross Income Allocation. In the event that any Holder has a deficit Capital
Account at the end of any Partnership Year that is in excess of the sum of (1) the amount
(if any) that such Holder is obligated to restore to the Partnership upon complete
liquidation of such Holder’s Partnership Interest (including, the Holder’s interest in
outstanding Partnership Preferred Units and other Partnership Units) and (2) the amount that
such Holder is deemed to be obligated to restore pursuant to the penultimate sentences of
Regulations Sections 1.704-2(g)(1) and 1.704-2(i)(5), each such Holder shall be specially
allocated items of Partnership income and gain in the amount of such excess to eliminate
such deficit as quickly as possible, provided that an allocation pursuant to this Section
6.3.B(v) shall be made if and only to the extent that such Holder would have a deficit
Capital Account in excess of such sum after all other allocations provided in this Article 6
have been tentatively made as if this Section 6.3.B(v) and Section 6.3.B(iv) hereof were not
in the Agreement.




     (vi) Limitation on Allocation of Net Loss. To the extent that any allocation of Net
Loss would cause or increase an Adjusted Capital Account Deficit as to any Holder, such
allocation of Net Loss shall be reallocated among the other Holders in accordance with their
respective Percentage Interests, subject to the limitations of this Section
6.3.B(vi); provided that in the event such allocation would result in all Partners



32









 






having an Adjusted Capital Account Deficit such Net Loss shall be allocated to the General
Partner.




     (vii) Section 754 Adjustment. To the extent that an adjustment to the adjusted tax
basis of any Partnership asset pursuant to Code Section 734(b) or Code Section 743(b) is
required, pursuant to Regulations Section 1.704-1(b)(2) (iv)(m)(2) or Regulations Section
1.704-1(b)(2)(iv)(m)(4), to be taken into account in determining Capital Accounts as the
result of a distribution to a Holder of Partnership Units in complete liquidation of its
interest in the Partnership, the amount of such adjustment to the Capital Accounts shall be
treated as an item of gain (if the adjustment increases the basis of the asset) or loss (if
the adjustment decreases such basis), and such gain or loss shall be specially allocated to
the Holders in accordance with their respective Percentage Interests in the event that
Regulations Section 1.704-1(b)(2)(iv)(m)(2) applies, or to the Holder(s) to whom such
distribution was made in the event that Regulations Section 1.704-1(b)(2)(iv)(m)(4) applies.




     (viii) Curative Allocations. The allocations set forth in Sections 6.3.B(i), (ii),
(iii), (iv), (v), (vi) and (vii) hereof (the “Regulatory Allocations”) are intended to
comply with certain regulatory requirements, including the requirements of Regulations
Sections 1.704-1(b) and 1.704-2. Notwithstanding the provisions of Section 6.1 hereof, the
Regulatory Allocations shall be taken into account in allocating other items of income,
gain, loss and deduction among the Holders of Partnership Units so that to the extent
possible without violating the requirements giving rise to the Regulatory Allocations, the
net amount of such allocations of other items and the Regulatory Allocations to each Holder
of a Partnership Unit shall be equal to the net amount that would have been allocated to
each such Holder if the Regulatory Allocations had not occurred.



     C. Special Allocations Upon Liquidation. Notwithstanding any provision in this Article 6 to
the contrary, in the event that the Partnership disposes of all or substantially all of its assets
in a transaction that will lead to a liquidation of the Partnership pursuant to Article 13 hereof,
then any Net Income or Net Loss realized in connection with such transaction and thereafter (and,
if necessary, constituent items of income, gain, loss and deduction) shall be specially allocated
for such Partnership Year (and to the extent permitted by Section 761(c) of the Code, for the
immediately preceding Partnership Year) among the Holders as required so as to cause liquidating
distributions pursuant to Section 13.2.A(4) hereof to be made in the same amounts and proportions
as would have resulted had such distributions instead been made pursuant to Article 5 hereof.



     D. Allocation of Excess Nonrecourse Liabilities. The Partnership shall allocate “nonrecourse
liabilities” (within the meaning of Regulations Section 1.752-3(a)(2) of the Partnership that are
secured by Multiple Properties under any reasonable method chosen by the Managing General Partner
and approved under Regulations Section 1.752-3(a)(5). The Partnership shall allocate “excess
nonrecourse liabilities” of the Partnership within the meaning
of Regulations Section 1.752-3(a)(3); profits shall be allocated using a method chosen by the
Managing General Partner and approved under such Regulations Section 1.752-3(a)(3).



33









 





     E. The Partnership shall allocate “excess nonrecourse liabilities” of the Partnership under
any method approved under the Regulations Section 1.752-3(a)(3) as chosen by the Managing General
Partner.



     Section 6.4 Tax Allocations.



     A. In General. Except as otherwise provided in this Section 6.4, for income tax purposes
under the Code and the Regulations each Partnership item of income, gain, loss and deduction
(collectively, “Tax Items”) shall be allocated among the Holders in the same manner as its
correlative item of “book” income, gain, loss or deduction is allocated pursuant to Sections 6.2
and 6.3 hereof.



     B. Section 704(c) Allocations. Notwithstanding Section 6.4.A hereof, Tax Items with respect
to Property that is contributed to the Partnership with a Gross Asset Value that varies from its
basis in the hands of the contributing Partner immediately preceding the date of contribution shall
be allocated among the Holders for income tax purposes pursuant to Regulations promulgated under
Code Section 704(c) so as to take into account such variation. The Partnership shall account for
such variation under any method approved under Code Section 704(c) and the applicable Regulations
as chosen by the Managing General Partner. In the event that the Gross Asset Value of any
partnership asset is adjusted pursuant to subsection (b) of the definition of “Gross Asset Value”
(provided in Article 1 hereof), subsequent allocations of Tax Items with respect to such asset
shall take account of the variation, if any, between the adjusted basis of such asset and its Gross
Asset Value in the same manner as under Code Section 704(c) and the applicable Regulations and
using the method chosen by the Managing General Partner.



ARTICLE 7

MANAGEMENT AND OPERATIONS OF BUSINESS




     Section 7.1 Management.



     A. Except as otherwise expressly provided in this Agreement or as delegated or provided to an
Additional General Partner by the Managing General Partner pursuant to Sections 4.2.A and 11.2
hereof, all management powers over the business and affairs of the Partnership are and shall be
exclusively vested in the Managing General Partner, and no Limited Partner (other than the Special
Limited Partner in its capacity as the sole member of the Managing General Partner) shall have any
right to participate in or exercise control or management power over the business and affairs of
the Partnership. No Partner may be removed by the Partners, with or without cause, except with the
consent of the Managing General Partner. In addition to the powers now or hereafter granted a
general partner of a limited partnership under applicable law, the Managing General Partner,
subject to the other provisions hereof including, without
limitation, Sections 3.1, 3.2 and 7.3, shall have full power and authority to do all things
deemed necessary or desirable by it to conduct the business of the Partnership, to exercise all
powers set forth in Section 3.2 hereof and to effectuate the purposes set forth in Section 3.1
hereof, including, without limitation:



34









 






     (1) the making of any expenditures, the lending or borrowing of money or selling of
assets (including, without limitation, making prepayments on loans and borrowing money to
permit the Partnership to make distributions to the Holders in such amounts as will permit
the Special Limited Partner (so long as the Special Limited Partner qualifies as a REIT) to
prevent the imposition of any Federal income tax (including, for this purpose, any excise
tax pursuant to Code Section 4981) and to make distributions to its stockholders sufficient
to permit the Special Limited Partner to maintain REIT qualification or otherwise to satisfy
the REIT Requirements), the assumption or guarantee of, or other contracting for,
indebtedness and other liabilities, the issuance of evidences of indebtedness (including the
securing of same by deed to secure Debt, mortgage, deed of trust or other lien or
encumbrance on the Partnership’s assets) and the incurring of any obligations that the
Managing General Partner deems necessary for the conduct of the activities of the
Partnership;




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




     (3) subject to Sections 11.2 and 11.3.B. hereof, the acquisition, sale, transfer,
exchange or other disposition of any, all or substantially all of the assets (including the
goodwill) of the Partnership (including, but not limited to, the exercise or grant of any
conversion, option, privilege or subscription right or any other right available in
connection with any assets at any time held by the Partnership) or the merger,
consolidation, reorganization or other combination of the Partnership with or into another
entity;




     (4) the mortgage, pledge, encumbrance or hypothecation of any assets of the
Partnership, the assignment of any assets of the Partnership in trust for creditors or on
the promise of the assignee to pay the liabilities of the Partnership, the use of the assets
of the Partnership (including, without limitation, cash on hand) for any purpose consistent
with the terms of this Agreement and on any terms that the Managing General Partner sees
fit, including, without limitation, the financing of the operations and activities of the
Managing General Partner, the Partnership or any of the Partnership’s Subsidiaries, the
lending of funds to other Persons (including, without limitation, the Managing General
Partner and/or the Partnership’s Subsidiaries) and the repayment of obligations of the
Partnership, its Subsidiaries and any other Person in which the Partnership has an equity
investment, and the making of capital contributions to and equity investments in the
Partnership’s Subsidiaries;




     (5) the management, operation, leasing, landscaping, repair, alteration, demolition,
replacement or improvement of any Property;




     (6) the negotiation, execution and performance of any contracts, including leases
(including ground leases), easements, management agreements, rights of way and other
property-related agreements, conveyances or other instruments that the Managing General
Partner considers useful or necessary to the conduct of the Partnership’s operations or the
implementation of the Managing General Partner’s powers under this



35









 






Agreement, including
contracting with contractors, developers, consultants, governmental authorities,
accountants, legal counsel, other professional advisors and other agents and the payment of
their expenses and compensation, as applicable, out of the Partnership’s assets;




     (7) the distribution of Partnership cash or other Partnership assets in accordance with
this Agreement, the holding, management, investment and reinvestment of cash and other
assets of the Partnership, and the collection and receipt of revenues, rents and income of
the Partnership;




     (8) the selection and dismissal of employees of the Partnership (if any) or the
Managing General Partner (including, without limitation, employees having titles or offices
such as “president,” “vice president,” “secretary” and “treasurer”), and agents, outside
attorneys, accountants, consultants and contractors of the Partnership or the Managing
General Partner and the determination of their compensation and other terms of employment or
hiring;




     (9) the maintenance of such insurance (including, without limitation, directors and
officers insurance) for the benefit of the Partnership and the Partners (including, without
limitation, the Special Limited Partner) as the Managing General Partner deems necessary or
appropriate;




     (10) the formation of, or acquisition of an interest in, and the contribution of
property to, any further limited or general partnerships, limited liability companies, joint
ventures or other relationships that it deems desirable; provided, however, that, as long as
the Special Limited Partner has determined to continue to qualify as a REIT, the Managing
General Partner will not engage in any such formation, acquisition or contribution that
would cause the Special Limited Partner to fail to qualify as a REIT;




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




     (12) the undertaking of any action in connection with the Partnership’s direct or
indirect investment in any Subsidiary or any other Person (including, without limitation,
the contribution or loan of funds by the Partnership to such Persons);




     (13) the determination of the fair market value of any Partnership property distributed
in kind using such reasonable method of valuation as the Managing General Partner may adopt;
provided, however, that such methods are otherwise consistent with the requirements of this
Agreement;



36









 






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




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




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




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




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




     (19) the issuance of additional Partnership Units in connection with Capital
Contributions by Additional Limited Partners and additional Capital Contributions by
Partners pursuant to Article 4 hereof;




     (20) an election to dissolve the Partnership pursuant to Section 13.1.B hereof; and




     (21) the distribution of cash to acquire Partnership Common Units held by a Limited
Partner in connection with a Redemption under Section 15.1 hereof.



     B. Each of the Limited Partners agrees that, except as provided in Section 7.3 hereof, the
Managing General Partner is authorized to execute, deliver and perform the above-mentioned
agreements and transactions on behalf of the Partnership without any further act, approval or vote
of the Partners, notwithstanding any other provision of the Act or any applicable law, rule or
regulation.



     C. At all times from and after the date hereof, the Managing General Partner may cause the
Partnership to obtain and maintain (i) casualty, liability and other insurance on the Properties of
the Partnership and (ii) liability insurance for the Indemnitees hereunder.



     D. At all times from and after the date hereof, the Managing General Partner may cause the
Partnership to establish and maintain working capital and other reserves in such amounts as the
Managing General Partner, in its sole and absolute discretion, deems appropriate and reasonable
from time to time.



37









 





     E. In exercising its authority under this Agreement, the Managing General Partner may, but
shall be under no obligation to (except as otherwise provided by this Agreement with respect to the
obligation to the Special Limited Partner), take into account the tax consequences to any Partner
of any action taken by it. The Managing General Partner, the Special Limited Partner and the
Partnership shall not have liability to a Limited Partner under any circumstances as a result of an
income tax liability incurred by such Limited Partner as a result of an action (or inaction) by the
Managing General Partner pursuant to its authority under this Agreement.



     Section 7.2 Certificate of Limited Partnership. To the extent that such action is determined
by the Managing General Partner to be reasonable and necessary or appropriate, the Managing General
Partner shall file amendments to and restatements of the Certificate and do all the things to
maintain the Partnership as a limited partnership (or a partnership in which the limited partners
have limited liability) under the laws of the State of Delaware and each other state, the District
of Columbia or any other jurisdiction, in which the Partnership may elect to do business or own
property. Subject to the terms of Section 8.5.A hereof, the Managing General Partner shall not be
required, before or after filing, to deliver or mail a copy of the Certificate or any amendment
thereto to any Limited Partner. The Managing General Partner shall use all reasonable efforts to
cause to be filed such other certificates or documents as may be reasonable and necessary or
appropriate for the formation, continuation, qualification and operation of a limited partnership
(or a partnership in which the limited partners have limited liability to the extent provided by
applicable law) in the State of Delaware and any other state, or the District of Columbia or other
jurisdiction, in which the Partnership may elect to do business or own property.



     Section 7.3 Restrictions on Managing General Partner’s Authority.



     A. The Managing General Partner may not take any action in contravention of this Agreement,
including, without limitation:




     (1) take any action that would make it impossible to carry on the ordinary business of
the Partnership, except as otherwise provided in this Agreement;




     (2) possess Partnership property, or assign any rights in specific Partnership
property, for other than a Partnership purpose, except as otherwise provided in this
Agreement, including, without limitation, Section 7.10;




     (3) admit a Person as a Partner, except as otherwise provided in this Agreement;




     (4) perform any act that would subject a Limited Partner to liability as a general
partner in any jurisdiction or any other liability, except as provided herein or under the
Act; or




     (5) enter into any contract, mortgage, loan or other agreement that expressly prohibits
or restricts (a) the Managing General Partner or the Partnership from performing its
specific obligations under Section 15.1 hereof in full or (b) a Limited Partner from
exercising its rights under Section 15.1 hereof to effect a Redemption in



38









 






full, except, in
either case, with the written consent of such Limited Partner affected by the prohibition or
restriction.



     B. Except as provided in Section 7.3C hereof, the Managing General Partner shall not, without
the prior Consent of the Partners, amend, modify or terminate this Agreement.



     C. Notwithstanding Section 7.3.B and 14.2 hereof, the Managing General Partner shall have the
power, without the Consent of the Partners, to amend this Agreement as may be required to
facilitate or implement any of the following purposes:




     (1) to add to the obligations of the Managing General Partner or surrender any right or
power granted to the Managing General Partner or any Affiliate of the Managing General
Partner (including the delegation or surrender of any power to any Additional General
Partner admitted to the Partnership pursuant to the terms hereof) for the benefit of the
Limited Partners;




     (2) to reflect the admission, substitution or withdrawal of Partners or the termination
of the Partnership in accordance with this Agreement, and to amend Exhibit A in connection
with such admission, substitution or withdrawal;




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




     (4) to satisfy any requirements, conditions or guidelines contained in any order,
directive, opinion, ruling or regulation of a Federal or state agency or contained in
Federal or state law (collectively, “Legal Requirements”);




     (5) (a) to reflect such changes as are reasonably necessary for the Special Limited
Partner to maintain or restore its qualification as a REIT or to satisfy the REIT
Requirements, or (b) to reflect the Transfer of all or any part of a Partnership Interest
among the Special Limited Partner and any “qualified REIT subsidiary” (within the meaning of
Code Section 856(i)(2)) with respect to the Special Limited Partner;




     (6) to modify either or both of the manner in which items of Net Income or Net Loss are
allocated pursuant to Article VI or the manner in which Capital Accounts are adjusted,
computed, or maintained (but in each case only to the extent set forth in the definition of
“Capital Account” or the flush language of Section 6.2);




     (7) to effectuate or otherwise reflect the issuance of additional Partnership Interests
in accordance with Section 4.2; and




     (8) to reflect any other modification to this Agreement as is reasonably necessary for
the business or operations of the Partnership or the Special Limited Partner and which does
not violate Section 7.3.D.



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     D. Notwithstanding Sections 7.3.B, 7.3.C and 14.2 hereof, this Agreement shall not be amended,
and no action may be taken by the Managing General Partner, without the consent of each Partner
adversely affected thereby, if such amendment or action would (i) convert a Limited Partner
Interest in the Partnership into a General Partner Interest (except as a result of the Managing
General Partner acquiring such Partnership Interest), (ii) modify the limited liability of a
Limited Partner, (iii) alter the rights of any Partner to receive the distributions to which such
Partner is entitled, pursuant to Article 5 or Section 13.2.A(4) hereof, or alter the allocations
specified in Article 6 hereof (except, in any case, as permitted pursuant to Sections 4.2, 7.3.C
and Article 6 hereof), (iv) alter or modify the Redemption rights, Cash Amount or REIT Shares
Amount as set forth in Section 15.1 hereof, or amend or modify any related definitions, (v) alter
or modify Section 11.2 hereof, (vi) remove, alter or amend the powers and restrictions related to
the REIT Requirements or permitting the Special Limited Partner to avoid paying tax under Sections
857 or 4981 contained in Sections 3.1, 3.2, 7.1 and 7.3, or (vii) amend this Section 7.3.D.
Further, no amendment may alter the restrictions on the Managing General Partner’s authority set
forth elsewhere in this Section 7.3 without the Consent specified therein. Any such amendment or
action consented to by any Partner shall be effective as to that Partner, notwithstanding the
absence of such Consent by any other Partner.



     Section 7.4 Reimbursement of the Managing General Partner and the Special Limited Partner.



     A. Neither the Managing General Partner nor the Special Limited Partner shall be compensated
for its services as managing general partner or limited partner of the Partnership, except as
provided in this Agreement (including the provisions of Articles 5 and 6 hereof regarding
distributions, payments and allocations to which they may be entitled in their respective
capacities as the Managing General Partner and the Special Limited Partner).



     B. Subject to Sections 7.4.C and 15.12 hereof, the Partnership shall be liable for, and shall
reimburse the Managing General Partner and the Special Limited Partner, as applicable, on a monthly
basis, or such other basis as the Managing General Partner may determine in its sole and absolute
discretion, for all sums expended in connection with the Partnership’s business, including, without
limitation, (i) expenses relating to the ownership of interests in and management and operation of,
or for the benefit of, the Partnership, (ii) compensation of officers and employees, including,
without limitation, payments under future compensation plans, of the Special Limited Partner, the
Managing General Partner, or the Partnership that may provide for stock units, or phantom stock,
pursuant to which employees of the Special Limited Partner, the Managing General Partner, or the
Partnership will receive payments based upon dividends on or the value of REIT Shares, (iii)
director or manager fees and expenses of the Special Limited Partner or its Affiliates, and (iv)
all costs and expenses of the Special Limited Partner being a public company, including costs of
filings with the SEC, reports and other distributions to its stockholders; provided, however, that
the amount of any reimbursement shall be reduced by any interest earned by the Managing General
Partner or the Special Limited Partner with respect to bank accounts or other instruments or
accounts held by it on behalf of the Partnership as permitted pursuant to Section 7.5 hereof. Such
reimbursements shall be in addition to any reimbursement of the Managing General Partner and the
Special Limited Partner as a result of indemnification pursuant to Section 7.7 hereof.



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     C. To the extent practicable, Partnership expenses shall be billed directly to and paid by the
Partnership and, subject to Section 15.12 hereof, reimbursements to the Managing General Partner,
the Special Limited Partner or any of their respective Affiliates by the Partnership pursuant to
this Section 7.4 shall be treated as “guaranteed payments” within the meaning of Code Section
707(c) and shall not be treated as distributions for purposes of computing the Partners’ Capital
Accounts.



     Section 7.5 Outside Activities of the Managing General Partner and the Special Limited
Partner. Neither the Managing General Partner nor the Special Limited Partner shall directly or
indirectly enter into or conduct any business, other than in connection with, (a) with respect to
the Managing General Partner, the ownership, acquisition and disposition of Partnership Interests
as the Managing General Partner, (b) with respect to the Managing General Partner, the management
of the business of the Partnership, (c) with respect to the Special Limited Partner, the operation
of the Special Limited Partner as a reporting company with a class
(or classes) of securities registered under the Exchange Act, (d) with respect to the Special
Limited Partner, its operations as a REIT, (e) with respect to the Special Limited Partner, the
offering, sale, syndication, private placement or public offering of stock, bonds, securities or
other interests, (f) financing or refinancing of any type related to the Partnership or its assets
or activities, and (g) such activities as are incidental thereto. Nothing contained herein shall
be deemed to prohibit the Managing General Partner from executing guarantees of Partnership Debt
for which it would otherwise be liable in its capacity as Managing General Partner The Managing
General Partner, the Special Limited Partner and all “qualified REIT subsidiaries” (within the
meaning of Code Section 856(i)(2)), taken as a group, shall not own any assets or take title to
assets (other than temporarily in connection with an acquisition prior to contributing such assets
to the Partnership) other than (i) interests in “qualified REIT subsidiaries” (within the meaning
of Code Section 856(i)(2)), (ii) Partnership Interests as the Managing General Partner or Special
Limited Partner and (iii) such cash and cash equivalents, bank accounts or similar instruments or
accounts as such group deems reasonably necessary, taking into account Section 7.1.D hereof and the
requirements necessary for the Special Limited Partner to qualify as a REIT and for the Managing
General Partner and the Special Limited Partner to carry out their respective responsibilities
contemplated under this Agreement and the Charter. The Managing General Partner and any Affiliates
of the Managing General Partner may acquire Limited Partner Interests and shall be entitled to
exercise all rights of a Limited Partner relating to such Limited Partner Interests.



     Section 7.6 Transactions with Affiliates.



     A. The Partnership may lend or contribute funds or other assets to the Special Limited Partner
and its Subsidiaries or other Persons in which the Special Limited Partner has an equity
investment, and such Persons may borrow funds from the Partnership, on terms and conditions no less
favorable to the Partnership in the aggregate than would be available from unaffiliated third
parties as determined by the Managing General Partner in good faith (provided, however, that the
foregoing limitation shall not apply to any transaction between the Partnership and its
Subsidiaries in which the Special Limited Partner does not own an equity interest other than
through the Partnership). The foregoing authority shall not create any right or benefit in favor of
any Subsidiary or any other Person. It is expressly acknowledged and agreed by each Partner that
the Special Limited Partner may, in the sole and absolute discretion of the Managing



41









 




General
Partner, (i) borrow funds from the Partnership in order to redeem, at any time or from time to
time, options or warrants previously or hereafter issued by the Special Limited Partner or (ii) put
to the Partnership, for cash, any rights, options, warrants or convertible or exchangeable
securities that the Special Limited Partner may desire or be required to purchase or redeem.




     B. Except as provided in Section 7.5 hereof and subject to Section 3.1 hereof, the Partnership
may transfer assets to joint ventures, limited liability companies, partnerships, corporations,
business trusts or other business entities in which it is or thereby becomes a participant upon
such terms and subject to such conditions consistent with this Agreement and applicable law as the
Managing General Partner, believes, in good faith, to be advisable.



     C. The Managing General Partner, the Special Limited Partner and their respective Affiliates
may sell, transfer or convey any property to the Partnership, directly or indirectly, on terms and
conditions no less favorable to the Partnership in the aggregate than would be available from
unaffiliated third parties, as determined by the Managing General Partner in good faith; provided,
however, that the foregoing limitation shall not apply to any transaction between the Partnership
and its Subsidiaries in which the Special Limited Partner does not own an equity interest other
than through the Partnership.



     D. The Managing General Partner or the Special Limited Partner, in their respective sole and
absolute discretion and without the approval of the Partners or any of them or any other Persons,
may propose and adopt (on behalf of the Partnership) employee benefit plans funded by the
Partnership for the benefit of employees of the Managing General Partner, the Partnership, the
Special Limited Partner, Subsidiaries of the Partnership or any Affiliate of any of them in respect
of services performed, directly or indirectly, for the benefit of the Managing General Partner, the
Special Limited Partner, the Partnership or any of the Partnership’s Subsidiaries.



     Section 7.7 Indemnification.



     A. To the fullest extent permitted by applicable law, the Partnership shall indemnify each
Indemnitee from and against any and all losses, claims, damages, liabilities, joint or several,
expenses (including, without limitation, attorney’s fees and other legal fees and expenses),
judgments, fines, settlements and other amounts arising from any and all claims, demands, actions,
suits or proceedings, civil, criminal, administrative or investigative, that relate to the
operations of the Partnership (“Actions”) as set forth in this Agreement in which such Indemnitee
may be involved, or is threatened to be involved, as a party or otherwise; provided, however, that
the Partnership shall not indemnify an Indemnitee (i) if the act or omission of the Indemnitee was
material to the matter giving rise to the Action and either was committed in bad faith or was the
result of active and deliberate dishonesty; (ii) in the case of any criminal proceeding, the
Indemnitee had reasonable cause to believe that the act or omission was unlawful; or (iii) for any
transaction for which such Indemnitee received an improper personal benefit in violation or breach
of any provision of this Agreement; and provided, further, that (x) no payments pursuant to this
Agreement shall be made by the Partnership to indemnify or advance funds to any Indemnitee with
respect to any Action initiated or brought voluntarily by such Indemnitee (and not by way of
defense) unless (I) approved or authorized by the Managing General Partner or (II) incurred to
establish or enforce such Indemnitee’s right to indemnification under this Agreement, and (y) the
Partnership shall not be liable for any expenses incurred by an



42









 




Indemnitee in connection with one
or more Actions or claims brought by the Partnership or involving such Indemnitee if such
Indemnitee is found liable to the Partnership on any portion of any claim in any such Action.



Without limitation, the foregoing indemnity shall extend to any liability of any Indemnitee,
pursuant to a loan guaranty or otherwise, for any Debt of the Partnership or any Subsidiary of the
Partnership (including, without limitation, any Debt which the Partnership or any Subsidiary of
the Partnership has assumed or taken subject to, and the Managing General Partner is hereby
authorized and empowered, on behalf of the Partnership, to enter into one or more indemnity
agreements consistent with the provisions of this Section 7.7 in favor of any Indemnitee having or
potentially having liability for any such Debt. It is the intention of this Section 7.7.A that the
Partnership indemnify each Indemnitee to the fullest extent permitted by law. The termination of
any proceeding by judgment, order or settlement does not create a presumption that the Indemnitee
did not meet the requisite standard of conduct set forth in this Section 7.7.A. The termination of
any proceeding by conviction of an Indemnitee or upon a plea of nolo contendere or its equivalent
by an Indemnitee, or an entry of an order of probation against an Indemnitee prior to judgment,
creates a rebuttable presumption that such Indemnitee acted in a manner contrary to that specified
in this Section 7.7.A with respect to the subject matter of such proceeding. Any indemnification
pursuant to this Section 7.7 shall be made only out of the assets of the Partnership, and neither
the Managing General Partner nor any other Holder shall have any obligation to contribute to the
capital of the Partnership or otherwise provide funds to enable the Partnership to fund its
obligations under this Section 7.7.




     B. To the fullest extent permitted by law, expenses incurred by an Indemnitee who is a party
to a proceeding or otherwise subject to or the focus of or is involved in any Action shall be paid
or reimbursed by the Partnership as incurred by the Indemnitee in advance of the final disposition
of the Action upon receipt by the Partnership of (i) a written affirmation by the Indemnitee of the
Indemnitee’s good faith belief that the standard of conduct necessary for indemnification by the
Partnership as authorized in Section 7.7A has been met, and (ii) a written undertaking by or on
behalf of the Indemnitee to repay the amount if it shall ultimately be determined that the standard
of conduct has not been met.



     C. The indemnification provided by this Section 7.7 shall be in addition to any other rights
to which an Indemnitee or any other Person may be entitled under any agreement, pursuant to any
vote of the Partners, as a matter of law or otherwise, and shall continue as to an Indemnitee who
has ceased to serve in such capacity and shall inure to the benefit of the heirs, successors,
assigns and administrators of the Indemnitee unless otherwise provided in a written agreement with
such Indemnitee or in the writing pursuant to which such Indemnitee is indemnified.



     D. The Partnership may, but shall not be obligated to, purchase and maintain insurance, on
behalf of any of the Indemnitees and such other Persons as the Managing 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.



43









 





     E. Any liabilities which an Indemnitee incurs as a result of acting on behalf of the
Partnership, the Managing General Partner or the Special Limited Partner (whether as a fiduciary or
otherwise) in connection with the operation, administration or maintenance of an employee
benefit plan or any related trust or funding mechanism (whether such liabilities are in the
form of excise taxes assessed by the IRS, penalties assessed by the Department of Labor,
restitutions to such a plan or trust or other funding mechanism or to a participant or beneficiary
of such plan, trust or other funding mechanism, or otherwise) shall be treated as liabilities or
judgments or fines under this Section 7.7, unless such liabilities arise as a result of (i) an act
or omission of such Indemnitee that was material to the matter giving rise to the Action and either
was committed in bad faith or was the result of active and deliberate dishonesty; (ii) in the case
of any criminal proceeding, an act or omission that such Indemnitee had reasonable cause to believe
was unlawful, or (iii) any transaction in which such Indemnitee received a personal benefit in
violation or breach of any provision of this Agreement or applicable law.



     F. In no event may an Indemnitee subject any of the Holders 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
7.7 because the Indemnitee had an interest in the transaction with respect to which the
indemnification applies if the transaction was otherwise permitted by the terms of this Agreement.



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



     I. It is the intent of the parties that any amounts paid by the Partnership to the Managing
General Partner pursuant to this Section 7.7 shall be treated as “guaranteed payments” within the
meaning of Code Section 707(c).



     Section 7.8 Liability of the Managing General Partner and the Special Limited Partner.



     A. Notwithstanding anything to the contrary set forth in this Agreement, neither the Managing
General Partner (nor the Special Limited Partner as the managing member of the Managing General
Partner) nor any of their respective directors, managers or officers shall be liable or accountable
in damages or otherwise to the Partnership, any Partners, or any Assignees for losses sustained,
liabilities incurred or benefits not derived as a result of errors in judgment or mistakes of fact
or law or of any act or omission if the Managing General Partner, the Special Limited Partner or
such director, manager or officer acted in good faith.



44









 





     B. The Limited Partners expressly acknowledge that (i) the Managing General Partner (and the
Special Limited Partner, as the managing member of the Managing General Partner) is acting for the
benefit of the Partnership, the Limited Partners and the Special Limited Partner’s stockholders
collectively, (ii) the Special Limited Partner is under no obligation to give priority to the
separate interests of the Limited Partners (including, without limitation, the tax consequences to
Limited Partners or Assignees) in deciding whether to cause the Partnership to take (or decline to
take) any actions, and (iii) the Managing General Partner shall not be liable to the Partnership or
to any Partner for monetary damages for losses sustained, liabilities incurred or benefits not
derived by the Limited Partners in connection with such decisions, provided that the Managing
General Partner has acted in good faith.



     C. Subject to its obligations and duties as Managing General Partner set forth in Section
7.1.A hereof, the Managing General Partner may exercise any of the powers granted to it by this
Agreement and perform any of the duties imposed upon it hereunder either directly or by or through
its employees or agents or through the Special Limited Partner (subject to the supervision and
control of the Managing General Partner and the Special Limited Partner). The Managing 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. Any amendment, modification or repeal of this Section 7.8 or any provision hereof shall be
prospective only and shall not in any way affect the limitations on the Managing General Partner’s,
the Special Limited Partner’s and their respective officers’, managers’ and directors’ liability to
the Partnership and the Limited Partners under this Section 7.8 as in effect immediately prior to
such amendment, modification or repeal with respect to claims arising from or relating to matters
occurring, in whole or in part, prior to such amendment, modification or repeal, regardless of when
such claims may arise or be asserted.



     E. Notwithstanding anything herein to the contrary, except for fraud, willful misconduct or
gross negligence, or pursuant to any express indemnities given to the Partnership by any Partner
pursuant to any other written instrument, no Partner shall have any personal liability whatsoever,
to the Partnership or to the other Partners, for the Debts or liabilities of the Partnership or the
Partnership’s obligations hereunder, and the full recourse of the other Partner(s) shall be limited
to the interest of that Partner in the Partnership. To the fullest extent permitted by law, no
officer, director, manager, member or stockholder of the Managing General Partner or the Special
Limited Partner shall be liable to the Partnership for money damages except for (i) active and
deliberate dishonesty established by a non-appealable final judgment or (ii) actual receipt of an
improper benefit or profit in money, property or services. Without limitation of the foregoing, and
except for fraud, willful misconduct or gross negligence, or pursuant to any such express
indemnity, no property or assets of any Partner, other than its interest in the Partnership, shall
be subject to levy, execution or other enforcement procedures for the satisfaction of any judgment
(or other judicial process) in favor of any other Partner(s) and arising out of, or in connection
with, this Agreement. This Agreement is executed by the officers of the Managing General Partner or
of the Special Limited Partner as managing member of the
Managing General Partner, solely as officers of the same and not in their own individual
capacities.




45











 





     F. To the extent that, at law or in equity, the Managing General Partner or the Special
Limited Partner as the managing member of the Managing General Partner has duties (including
fiduciary duties) and liabilities relating thereto to the Partnership or the Limited Partners,
neither the Managing General Partner nor the Special Limited Partner shall be liable to the
Partnership or to any other Partner for its good faith reliance on the provisions of this
Agreement. The provisions of this Agreement, to the extent that they restrict the duties and
liabilities of the Managing General Partner and the Special Limited Partner otherwise existing at
law or in equity, are agreed by the Partners to replace such other duties and liabilities of such
Managing General Partner and the Special Limited Partner, as the managing member of the Managing
General Partner.



     G. Whenever in this Agreement the Managing General Partner is permitted or required to make a
decision (i) in its “sole discretion” or “discretion” or under a grant of similar authority or
latitude, the Managing General Partner shall be entitled to consider only such interests and
factors as it desires, including its own interests, and shall have no duty or obligation to give
any consideration to any interest or factors affecting the Partnership or the Partners or any of
them, or (ii) in its “good faith” or under another expressed standard, the Managing General Partner
shall act under such express standard and shall not be subject to any other or different standards
imposed by this Agreement or any other agreement contemplated herein or by relevant provisions of
law or in equity or otherwise. If any question should arise with respect to the operation of the
Partnership, which is not otherwise specifically provided for in this Agreement or the Act, or with
respect to the interpretation of this Agreement, the Managing General Partner is hereby authorized
to make a final determination with respect to any such question and to interpret this Agreement in
such a manner as it shall deem, in its sole discretion, to be fair and equitable, and its
determination and interpretations so made shall be final and binding on all parties. The Managing
General Partner’s “sole discretion” and “discretion” under this Agreement shall be exercised in
good faith.



     Section 7.9 Other Matters Concerning the Managing General Partner and the Special Limited
Partner.



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



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



     C. The Managing General Partner shall have the right, in respect of any of its powers or
obligations hereunder, to act through any of its duly authorized officers and a duly appointed



46









 




attorney or attorneys-in-fact (including, without limitation, officers and directors of the
Special Limited Partner). Each such attorney shall, to the extent provided by the Managing General
Partner in the power of attorney, have full power and authority to do and perform all and every act
and duty that is permitted or required to be done by the Managing General Partner hereunder.




     D. Notwithstanding any other provision of this Agreement or the Act, any action of the
Managing General Partner or the Special Limited Partner on behalf of the Partnership or any
decision of the Managing General Partner or the Special Limited 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 Special Limited Partner to
continue to qualify as a REIT, (ii) for the Special Limited Partner otherwise to satisfy the REIT
Requirements, (iii) to avoid the Special Limited Partner incurring any taxes under Code Section 857
or Code Section 4981, or (iv) for any Special Limited Partner Affiliate to continue to qualify as a
“qualified REIT subsidiary” (within the meaning of Code Section 856(i)(2)), is expressly authorized
under this Agreement and is deemed approved by all of the Partners.



     E. To the extent the Special Limited Partner, or its officers or directors, take any action by
or on behalf of the Managing General Partner or the Partnership, the Special Limited Partner and
its officers and directors shall be entitled to the same protection as the Managing General Partner
and its officers and managers.



     Section 7.10 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 with other Partners or Persons, 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 Managing General Partner, the
Special Limited Partner or one or more nominees, as the Managing General Partner or the Special
Limited Partner may determine, including Affiliates of the Managing General Partner or the Special
Limited Partner. The Managing General Partner and the Special Limited Partner hereby declare and
warrant that any Partnership assets for which legal title is held in the name of the Managing
General Partner or the Special Limited Partner, as applicable, or any nominee or Affiliate of the
Managing General Partner or the Special Limited Partner shall be held by the Managing General
Partner or the Special Limited Partner, as applicable, for the use and benefit of the Partnership
in accordance with the provisions of this Agreement. All Partnership assets shall be recorded as
the property of the Partnership in its books and records, irrespective of the name in which legal
title to such Partnership assets is held.



     Section 7.11 Reliance by Third Parties. Notwithstanding anything to the contrary in this
Agreement, any Person dealing with the Partnership shall be entitled to assume that the Managing
General Partner has full power and authority, without the consent or approval of any other Partner,
or Person, to encumber, sell or otherwise use in any manner any and all assets of the Partnership
and to enter into any contracts on behalf of the Partnership, and take any and all actions on
behalf of the Partnership, and such Person shall be entitled to deal with the Managing General
Partner as if it were the Partnership’s sole party in interest, both legally and beneficially. Each
Limited Partner hereby waives any and all defenses or other remedies that may be available against
such Person to contest, negate or disaffirm any action of the Managing General Partner in
connection with any such dealing. In no event shall any Person dealing with the Managing



47









 




General Partner or its representatives be obligated to ascertain that the terms of this
Agreement have been complied with or to inquire into the necessity or expediency of any act or
action of the Managing General Partner or its representatives. Each and every certificate, document
or other instrument executed on behalf of the Partnership by the Managing General Partner or its
representatives shall be conclusive evidence in favor of any and every Person relying thereon or
claiming thereunder that (i) at the time of the execution and delivery of such certificate,
document or instrument, this Agreement was in full force and effect, (ii) the Person executing and
delivering such certificate, document or instrument was duly authorized and empowered to do so for
and on behalf of the Partnership and (iii) such certificate, document or instrument was duly
executed and delivered in accordance with the terms and provisions of this Agreement and is binding
upon the Partnership.




ARTICLE 8

RIGHTS AND OBLIGATIONS OF LIMITED PARTNERS




     Section 8.1 Limitation of Liability. No Limited Partner shall have any liability under this
Agreement except as expressly provided in this Agreement (including, without limitation, Section
10.4 hereof) or under the Act.



     Section 8.2 Management of Business. Subject to the rights and powers of the Special Limited
Partner hereunder, no Limited Partner or Assignee (other than the Managing General Partner, any of
its Affiliates or any officer, director, member, employee, partner, agent, representative or
trustee of the Managing General Partner, the Partnership or any of their Affiliates, in their
capacity as such) shall take part in the operations, management or control (within the meaning of
the Act) of the Partnership’s business, transact any business in the Partnership’s name or have the
power to sign documents for or otherwise bind the Partnership. The transaction of any such business
by the Managing General Partner, any of its Affiliates or any officer, director, member, employee,
partner, agent, representative or trustee of the Managing General Partner, the Partnership or any
of their Affiliates, in their capacity as such, shall not affect, impair or eliminate the
limitations on the liability of the Limited Partners or Assignees under this Agreement.



     Section 8.3 Outside Activities of Limited Partners. Subject to any agreements entered into
pursuant to Section 7.6 hereof and any other agreements entered into by a Limited Partner or any of
its Affiliates with the Managing General Partner, the Partnership or a Subsidiary (including,
without limitation, any employment agreement), any Limited Partner (other than the Special Limited
Partner) and any Assignee, officer, director, employee, agent, trustee, Affiliate, member or
stockholder of any Limited Partner shall be entitled to and may have business interests and engage
in business activities in addition to those relating to the Partnership, including business
interests and activities that are in direct or indirect competition with the Partnership or that
are enhanced by the activities of the Partnership. Neither the Partnership nor any Partner shall
have any rights by virtue of this Agreement in any business ventures of any Limited Partner or
Assignee. Subject to such agreements, 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
business ventures of any other Person (other than the Managing General Partner or the Special
Limited Partner, to the extent expressly provided herein), and such Person shall have no obligation
pursuant to this Agreement, subject to Section 7.6 hereof and any



48









 




other agreements entered into by a Limited Partner or its Affiliates with the Managing General
Partner, the Partnership or a Subsidiary, to offer any interest in any such business ventures to
the Partnership, any Limited Partner, or any such other Person, even if such opportunity is of a
character that, if presented to the Partnership, any Limited Partner or such other Person, could be
taken by such Person.




     Section 8.4 Return of Capital. Except pursuant to the rights of Redemption set forth in
Section 15.1 hereof, no Limited Partner shall be entitled to the withdrawal or return of its
Capital Contribution, except to the extent of distributions made pursuant to this Agreement or upon
termination of the Partnership as provided herein. Except to the extent provided in Article 6
hereof or otherwise expressly provided in this Agreement, no Limited Partner or Assignee shall have
priority over any other Limited Partner or Assignee either as to the return of Capital
Contributions or as to profits, losses or distributions.



     Section 8.5 Rights of Limited Partners Relating to the Partnership.



     A. In addition to other rights provided by this Agreement or by the Act, and except as limited
by Section 8.5.C hereof, the Managing General Partner shall deliver to each Limited Partner a copy
of any information mailed to all of the common stockholders of the Special Limited Partner as soon
as practicable after such mailing.



     B. The Partnership shall notify any Limited Partner that is a Qualifying Party, on request, of
the then current Adjustment Factor and any change made to the Adjustment Factor shall be set forth
in the quarterly report required by Section 9.3.B hereof immediately following the date such change
becomes effective.



     C. Notwithstanding any other provision of this Section 8.5, the Managing General Partner may
keep confidential from the Limited Partners (or any of them), for such period of time as the
Managing General Partner determines in its sole and absolute discretion to be reasonable, any
information that (i) the Managing General Partner believes to be in the nature of trade secrets or
other information the disclosure of which the Managing General Partner in good faith believes is
not in the best interests of the Partnership or the Managing General Partner or (ii) the
Partnership or the Managing General Partner is required by law or by agreement to keep
confidential.



     Section 8.6 Partnership Right to Call Limited Partner Interests. Notwithstanding any other
provision of this Agreement, on and after the date on which the aggregate Percentage Interests of
the Limited Partners (other than the Special Limited Partner) are less than one percent (1%), the
Partnership shall have the right, but not the obligation, from time to time and at any time to
redeem any and all outstanding Limited Partner Interests (other than the Special Limited Partner’s
Limited Partner Interests) by treating any Limited Partner as a Tendering Party who has delivered a
Notice of Redemption pursuant to Section 15.1 hereof for the amount of Partnership Common Units to
be specified by the Managing General Partner, in its sole and absolute discretion, by notice to
such Limited Partner that the Partnership has elected to exercise its rights under this Section
8.6. Such notice given by the Managing General Partner to a Limited Partner pursuant to this
Section 8.6 shall be treated as if it were a Notice of Redemption delivered to the Managing General
Partner by such Limited Partner. For purposes of this



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Section 8.6, (a) any Limited Partner (whether or not otherwise a Qualifying Party) may, in the
Managing General Partner’s sole and absolute discretion, be treated as a Qualifying Party that is a
Tendering Party and (b) the provisions of Sections 15.1.F(2) and 15.1.F(3) hereof shall not apply,
but the remainder of Section 15.1 hereof shall apply, mutatis mutandis.




ARTICLE 9

BOOKS, RECORDS, ACCOUNTING AND REPORTS




     Section 9.1 Records and Accounting.



     A. The Managing General Partner shall keep or cause to be kept at the principal office of the
Partnership those records and documents required to be maintained by the Act and other books and
records deemed by the Managing General Partner to be appropriate with respect to the Partnership’s
business, including, without limitation, all books and records necessary to provide to the Limited
Partners any information, lists and copies of documents required to be provided pursuant to
Sections 8.5.A, 9.3 or Article 13 hereof. Any records maintained by or on behalf of the
Partnership in the regular course of its business may be kept on any information storage device,
provided that the records so maintained are convertible into clearly legible written form within a
reasonable period of time.



     B. The books of the Partnership shall be maintained, for financial and tax reporting purposes,
on an accrual basis in accordance with generally accepted accounting principles, or on such other
basis as the Managing General Partner determines to be necessary or appropriate. To the extent
permitted by sound accounting practices and principles, the Partnership and the Managing General
Partner may operate with integrated or consolidated accounting records, operations and principles.



     Section 9.2 Partnership Year. The Partnership Year of the Partnership shall be the calendar
year.



     Section 9.3 Reports.



     A. As soon as practicable, but in no event later than one hundred five (105) days after the
close of each Partnership Year, the Managing General Partner shall cause to be mailed to each
Limited Partner of record as of the close of the Partnership Year, financial statements of the
Partnership, or of the Special Limited Partner if such statements are prepared solely on a
consolidated basis with the Special Limited Partner, for such Partnership Year, presented in
accordance with generally accepted accounting principles, such statements to be audited by a
nationally recognized firm of independent public accountants selected by the Managing General
Partner.



     B. If and to the extent that the Special Limited Partner mails quarterly reports to its
stockholders, as soon as practicable, but in no event later than the date on which such reports are
mailed, the Managing General Partner shall cause to be mailed to each Limited Partner of record as
of the last day of the calendar quarter, a report containing unaudited financial statements of the
Partnership for such calendar quarter, or of the Special Limited Partner if such statements are
prepared solely on a consolidated basis with the Special Limited Partner, and such other



50









 




information as may be required by applicable law or regulation or as the Managing General
Partner determines to be appropriate.




     C. The Managing General Partner shall have satisfied its obligations under Sections 9.3A and
9.3B by posting or making available the reports required by this Section 9.3 on the website
maintained from time to time by the Partnership or the Special Limited Partner, provided that such
reports are able to be printed or downloaded from such website.



     D. At the request of any Limited Partner, the Managing General Partner shall provide access to
the books, records and work papers upon which the reports required by this Section 9.3 are based,
to the extent required by the Act.



ARTICLE 10

TAX MATTERS




     Section 10.1 Preparation of Tax Returns. The Managing General Partner shall arrange for the
preparation and timely filing of all returns with respect to Partnership income, gains, deductions,
losses and other items required of the Partnership for Federal and state income tax purposes and
shall use all reasonable efforts to furnish, within ninety (90) days of the close of each taxable
year, the tax information reasonably required by Limited Partners and for Federal and state income
tax and any other tax reporting purposes. The Limited Partners shall promptly provide the Managing
General Partner with such information relating to the Contributed Properties as is readily
available to the Limited Partners, including tax basis and other relevant information, as may be
reasonably requested by the Managing General Partner from time to time.



     Section 10.2 Tax Elections. Except as otherwise provided herein, the Managing General Partner
shall, in its sole and absolute discretion, determine whether to make any available election
pursuant to the Code, including, but not limited to, the election under Code Section 754 and the
election to use the “recurring item” method of accounting provided under Code Section 461(h) with
respect to property taxes imposed on the Partnership’s Properties; provided, however, that, if the
“recurring item” method of accounting is elected with respect to such property taxes, the
Partnership shall pay the applicable property taxes prior to the date provided in Code Section
461(h) for purposes of determining economic performance. The Managing General Partner shall have
the right to seek to revoke any such election (including, without limitation, any election under
Code Sections 461(h) and 754) upon the Managing General Partner’s determination in its sole and
absolute discretion that such revocation is in the best interests of the Partners.



     Section 10.3 Tax Matters Partner.



     A. The Managing General Partner shall be the “tax matters partner” of the Partnership for
Federal income tax purposes. The tax matters partner shall receive no compensation for its
services. All third-party costs and expenses incurred by the tax matters partner in performing its
duties as such (including legal and accounting fees and expenses) shall be borne by the Partnership
in addition to any reimbursement pursuant to Section 7.4 hereof. Nothing herein shall be construed
to restrict the Partnership from engaging an accounting firm to assist the tax matters partner in
discharging its duties hereunder.



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




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




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




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




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




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




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


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




     Section 10.4 Withholding. Each Limited Partner hereby authorizes the Partnership to withhold
from or pay on behalf of or with respect to such Limited Partner any amount of Federal, state,
local or foreign taxes that the Managing General Partner determines that the Partnership is
required to withhold or pay with respect to any amount distributable or allocable to such Limited
Partner pursuant to this Agreement, including, without limitation, any taxes required to be



52









 




withheld or paid by the Partnership pursuant to Code Section 1441, Code Section 1442, Code
Section 1445 or Code Section 1446. Any amount paid on behalf of or with respect to a Limited
Partner shall constitute a loan by the Partnership to such Limited Partner, which loan shall be
repaid by such Limited Partner within thirty (30) days after the affected Limited Partner receives
written notice from the Managing General Partner that such payment must be made, provided that the
Limited Partner shall not be required to repay such deemed loan if either (i) the Partnership
withholds such payment from a distribution that would otherwise be made to the Limited Partner or
(ii) the Managing General Partner determines, in its sole and absolute discretion, that such
payment may be satisfied out of the Available Cash of the Partnership that would, but for such
payment, be distributed to the Limited Partner. Any amounts payable by a Limited Partner hereunder
shall bear interest at the base rate on corporate loans at large United States money center
commercial banks, as published from time to time in the Wall Street Journal (but not higher than
the maximum lawful rate) from the date such amount is due (i.e., thirty (30) days after the Limited
Partner receives written notice of such amount) until such amount is paid in full.




     Section 10.5 Organizational Expenses. The Managing General Partner may cause the
Partnership to elect to deduct expenses, if any, incurred by it in organizing the Partnership
ratably over a 180-month period as provided in Section 709 of the Code.



ARTICLE 11

PARTNER TRANSFERS AND WITHDRAWALS




     Section 11.1 Transfer.



     A. No part of the interest of a Partner shall be subject to the claims of any creditor, to any
spouse for alimony or support, or to legal process, and may not be voluntarily or involuntarily
alienated or encumbered except as may be specifically provided for in this Agreement.



     B. No Partnership Interest shall be Transferred, in whole or in part, except in accordance
with the terms and conditions set forth in this Article 11. Any Transfer or purported Transfer of a
Partnership Interest not made in accordance with this Article 11 shall be null and void ab initio.



     C. Notwithstanding the other provisions of this Article 11 (other than Section 11.6.D hereof),
the respective Partnership Interests of the Managing General Partner and the Special Limited
Partner may be Transferred, in whole or in part, at any time or from time to time, to or among the
Managing General Partner, the Special Limited Partner, and any other Person that is, at the time of
such Transfer, an Affiliate of the Special Limited Partner, including any “qualified REIT
subsidiary” (within the meaning of Code Section 856(i)(2)). Any transferee of the entire General
Partner Interest of the Managing General Partner pursuant to this Section 11.1.C shall, upon
compliance with Section 12.1.A hereof, become, without further action or Consent of any Partners,
the sole Managing General Partner of the Partnership, subject to all the rights, privileges, duties
and obligations under this Agreement and the Act relating to a Managing General Partner. Any
transferee of the entire Limited Partner Interest of the Special Limited Partner pursuant to this
Section 11.1.C shall, upon its execution of a counterpart of this



53









 




Agreement, become, without further action or Consent of any Partner, a Substituted Limited
Partner (as the Special Limited Partner). Upon any Transfer of the Managing General Partner’s
entire General Partner Interest (other than a pledge, hypothecation, encumbrance or mortgage)
permitted by this Section 11.1.C, the transferor Partner shall be relieved of all its obligations
under this Agreement from and after the date of such Transfer. The provisions of Sections 11.2.B,
11.3, 11.4.A and 11.5 hereof shall not apply to any Transfer permitted by this Section 11.1.C.




     D. No Transfer of any Partnership Interest may be made to a lender to the Partnership or any
Person who is related (within the meaning of Section 1.752-4(b) of the Regulations) to any lender
to the Partnership whose loan constitutes a Nonrecourse Liability, without the consent of the
Managing General Partner in its sole and absolute discretion; provided, however, that as a
condition to such consent, the lender will be required to enter into an arrangement with the
Partnership and the Managing General Partner to redeem or exchange for the REIT Shares Amount any
Partnership Units in which a security interest is held by such lender 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 (provided that for purpose of calculating
the REIT Shares Amount in this Section 11.1.D, “Tendered Units” shall mean all such Partnership
Units in which a security interest is held by such lender).



     Section 11.2 Transfer of Managing General Partner’s General Partnership Interest.



     A. The Managing General Partner may not Transfer any of its General Partner Interest or
withdraw from the Partnership, except as provided in Sections 11.1.C, 11.2.B and 11.2.C hereof. The
term “Transfer”, when used in this Section 11.2 with respect to the General Partner Interest, shall
be deemed to include a Transfer of the General Partner Interest resulting from any merger,
consolidation or other combination by the Special Limited Partner with or into another Person
(other than a Subsidiary of the Special Limited Partner), the sale of all or substantially all of
the assets of the Special Limited Partner and its Subsidiaries, taken as a whole, or any
reclassification, recapitalization or change of the outstanding equity interests of the Special
Limited Partner, but shall exclude the transactions described in Section 11.3.B hereof.



     B. Except as provided in Section 11.1.C, this Section 11.2.B and Section 11.2.C hereof, the
Managing General Partner shall not withdraw from the Partnership and shall not Transfer all of its
interest in the Partnership (whether by sale, disposition, statutory merger or consolidation,
liquidation or otherwise) without the Consent of the Limited Partners. Upon any Transfer of such a
Partnership Interest pursuant to the Consent of the Limited Partners and otherwise in accordance
with the provisions of this Section 11.2.B, the transferee shall become a successor Managing
General Partner for all purposes herein, and shall be vested with the powers and rights of the
transferor Managing General Partner, and shall be liable for all obligations and responsible for
all duties of the Managing General Partner, once such transferee has executed such instruments as
may be necessary to effectuate such admission and to confirm the agreement of such transferee to be
bound by all the terms and provisions of this Agreement with respect to the Partnership Interest so
acquired. It is a condition to any Transfer otherwise permitted hereunder that the transferee
assumes, by operation of law or express agreement, all of the obligations of the transferor
Managing General Partner under this Agreement with respect to



54









 




such Transferred Partnership Interest, and such Transfer shall relieve the transferor Managing
General Partner of its obligations under this Agreement without the Consent of the Limited
Partners. In the event that the Managing General Partner withdraws from the Partnership in
violation of this Agreement or otherwise, or otherwise dissolves or terminates, or upon the
bankruptcy of the Managing General Partner, a Majority in Interest of the Limited Partners may
elect to continue the Partnership business by selecting a successor Managing General Partner in
accordance with Section 13.1.A hereof.




     C. The Managing General Partner may, with the Consent of the Limited Partners, merge with
another entity if immediately after such merger substantially all the assets of the surviving
entity, other than the General Partner Interest held by the Managing General Partner, are
contributed to the Partnership as a Capital Contribution in exchange for Partnership Units.



     D. No Additional General Partner shall Transfer any of its General Partner Interest or
withdraw from the Partnership, except with the consent of the Managing General Partner.



     Section 11.3 Limited Partners’ Rights to Transfer.



     A. General. Prior to the end of the Twelve-Month Period and except as provided in Section
11.1.C hereof, no Limited Partner shall Transfer all or any portion of its Partnership Interest to
any transferee without the consent of the Managing General Partner, which consent may be withheld
in its sole and absolute discretion; provided, however, that, except as provided in Sections
11.1.D, 11.3.D and 11.6.D, any Limited Partner may, at any time, without the consent of the
Managing General Partner, (i) Transfer all or part of its Partnership Interest to any Family
Member, any Charity, any Controlled Entity or any Affiliate or (ii) pledge (a “Pledge”) all or any
portion of its Partnership Interest to a lending institution as collateral or security for a bona
fide loan or other extension of credit, and Transfer such pledged Partnership Interest to such
lending institution in connection with the exercise of remedies under such loan or extension of
credit (any Transfer or Pledge permitted by this proviso is hereinafter referred to as a “Permitted
Transfer”). After such Twelve-Month Period, and subject to Sections 11.3.D and 11.6.D, each Limited
Partner, and each transferee of Partnership Units or Assignee pursuant to a Permitted Transfer,
shall have the right to Transfer all or any portion of its Partnership Interest to any Person,
without the consent of the Managing General Partner and subject to the provisions of Section 11.4
hereof and to satisfaction of each of the following conditions:




     (1) Special Limited Partner Right of First Refusal. The Transferring Limited Partner
(or the Limited Partner’s estate in the event of the Limited Partner’s death) shall give
written notice of the proposed Transfer to the Managing General Partner and the Special
Limited Partner, which notice shall state (i) the identity and address of the proposed
transferee and (ii) the amount and type of consideration proposed to be received for the
Transferred Partnership Units. The Special Limited Partner shall have ten (10) Business Days
upon which to give the Transferring Limited Partner notice of its election to acquire the
Partnership Units on the terms set forth in such notice. If it so elects, it shall purchase
the Partnership Units on such terms within ten (10) Business Days after giving notice of
such election; provided, however, that in the event that the proposed terms involve a
purchase for cash, the Special Limited Partner may at its election deliver in lieu of all or
any portion of such cash a note from the Special Limited Partner payable



55









 







to the Transferring Limited Partner at a date as soon as reasonably practicable, but in
no event later than one hundred eighty (180) days after such purchase, and bearing interest
at an annual rate equal to the total dividends declared with respect to one (1) REIT Share
for the four (4) preceding fiscal quarters of the Special Limited Partner, divided by the
Value as of the closing of such purchase; and provided, further, that such closing may be
deferred to the extent necessary to effect compliance with the Hart-Scott-Rodino Antitrust
Improvements Act of 1976, if applicable, and any other applicable requirements of law. If it
does not so elect, the Transferring Limited Partner may Transfer such Partnership Units to a
third party, on terms no more favorable to the transferee than the proposed terms, subject
to the other conditions of this Section 11.3.




     (2) Qualified Transferee. Any Transfer of a Partnership Interest shall be made only to
a single Qualified Transferee; provided, however, that, for such purposes, all Qualified
Transferees that are Affiliates, or that comprise investment accounts or funds managed by a
single Qualified Transferee and its Affiliates, shall be considered together to be a single
Qualified Transferee; and provided, further, that each Transfer meeting the minimum Transfer
restriction of Section 11.3.A(4) hereof may be to a separate Qualified Transferee.




     (3) Opinion of Counsel. The Transferring Limited Partner shall deliver or cause to be
delivered to the Managing General Partner an opinion of counsel reasonably satisfactory to
it to the effect that the proposed Transfer may be effected without registration under the
Securities Act and will not otherwise violate the registration provisions of the Securities
Act and the regulations promulgated thereunder or violate any state securities laws or
regulations applicable to the Partnership or the Partnership Interests Transferred;
provided, however, that the Managing General Partner may, in its sole discretion, waive this
condition upon the request of the Transferring Limited Partner. If, in the opinion of such
counsel, such Transfer would require the filing of a registration statement under the
Securities Act by the Partnership or the Special Limited Partner or would otherwise violate
any Federal or state securities laws or regulations applicable to the Partnership, the
Special Limited Partner or the Partnership Units, the Managing General Partner may prohibit
any Transfer otherwise permitted under this Section 11.3 by a Limited Partner of Partnership
Interests.




     (4) Minimum Transfer Restriction. Any Transferring Limited Partner must Transfer not
less than the lesser of (i) five hundred (500) Partnership Units or (ii) all of the
remaining Partnership Units owned by such Transferring Limited Partner, unless, in each
case, otherwise agreed to by the Managing General Partner in its sole and absolute
discretion; provided, however, that, for purposes of determining compliance with the
foregoing restriction, all Partnership Units owned by Affiliates of a Limited Partner shall
be considered to be owned by such Limited Partner.




     (5) No Further Transfers. The transferee shall not be permitted to effect any further
Transfer of the Partnership Units, other than to the Special Limited Partner.




     (6) Exception for Permitted Transfers. The conditions of Sections 11.3.A(1) through
11.3.A(5) hereof shall not apply in the case of a Permitted Transfer.



56









 




It is a condition to any Transfer otherwise permitted hereunder (whether or not such Transfer is
effected during or after the Twelve-Month Period) that the transferee assumes by operation of law
or express agreement all of the obligations of the transferor Limited Partner under this Agreement
with respect to such Transferred Partnership Interest, and no such Transfer (other than pursuant to
a statutory merger or consolidation wherein all obligations and liabilities of the Transferring
Limited Partner are assumed by a successor corporation by operation of law) shall relieve the
Transferring Limited Partner of its obligations under this Agreement without the approval of the
Managing General Partner, in its sole and absolute discretion. Notwithstanding the foregoing, any
transferee of any Transferred Partnership Interest shall be subject to the Ownership Limit. Any
transferee, whether or not admitted as a Substituted Limited Partner, shall take subject to the
obligations of the Transferring Limited Partner hereunder. Unless admitted as a Substituted Limited
Partner, no transferee, whether by a voluntary Transfer, by operation of law or otherwise, shall
have any rights hereunder, other than the rights of an Assignee as provided in Section 11.5 hereof.




     B. Certain Transactions of the Special Limited Partner. Notwithstanding anything to the
contrary in this Agreement, the Special Limited Partner may merge, consolidate or otherwise combine
its assets with another entity, sell all or substantially all of its assets or reclassify,
recapitalize or change its outstanding equity interests if:




     (i) in connection with such merger, consolidation, combination, sale, reclassification,
recapitalization or change, all of the Limited Partners (other than the Special Limited
Partner) will receive, or will have the right to elect to receive, for each Partnership Unit
an amount of cash, securities or other property equal in value to the product of the
Adjustment Factor and the greatest amount of cash, securities or other property paid to a
holder of one REIT Share in consideration of one REIT Share pursuant to the terms of such
merger, consolidation or combination; provided, that if, in connection with such merger,
consolidation, combination, sale, reclassification, recapitalization or change, a purchase,
tender or exchange offer shall have been made to and accepted by the holders of the
outstanding REIT Shares, each holder of Partnership Units (other than the Special Limited
Partner) shall receive, or shall have the right to elect to receive, the greatest amount of
cash, securities or other property which such holder of Partnership Units would have
received had it exercised its right to Redemption pursuant to Article 15 hereof and received
REIT Shares in exchange for its Partnership Units immediately prior to the expiration of
such purchase, tender or exchange offer and had thereupon accepted such purchase, tender or
exchange offer and then such merger, consolidation or combination shall have been
consummated; or




     (ii) the following conditions are met: (w) substantially all of the assets directly or
indirectly owned by the surviving entity, other than the Partnership Units held by the
Special Limited Partner, are owned directly or indirectly by the Partnership or another
limited partnership or limited liability company which is the survivor of a merger,
consolidation or combination of assets with the Partnership (in each case, the “Surviving
Partnership”); (x) the holders of Partnership Units own a percentage interest of the
Surviving Partnership based on the relative fair market value of the net assets of the
Partnership and the other net assets of the Surviving Partnership immediately prior to the
consummation of such transaction; (y) the rights, preferences and privileges of such



57









 







holders in the Surviving Partnership are at least as favorable as those in effect
immediately prior to the consummation of such transaction and as those applicable to any
other limited partners or non-managing members of the Surviving Partnership; and (z) the
rights of the Limited Partners include at least one of the following: (a) the right to
redeem their interests in the Surviving Partnership for the consideration available to such
persons pursuant to Section 11.3.B(i) or (b) the right to redeem their Partnership Units for
cash on terms equivalent to those in effect with respect to their Partnership Units
immediately prior to the consummation of such transaction, or, if the ultimate controlling
person of the Surviving Partnership has publicly traded common equity securities, such
common equity securities, with an exchange ratio based on the determination of relative fair
market value of such securities and the REIT Shares.



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



     D. Adverse Tax Consequences. No Transfer by a Limited Partner of its Partnership Interests
(including any Redemption, any other acquisition of Partnership Units by the Managing General
Partner or any acquisition of Partnership Units by the Partnership) may be made to or by any Person
if (i) in the opinion of legal counsel for the Partnership, it would (A) result in the Partnership
being treated as an association taxable as a corporation or would result in a termination of the
Partnership under Code Section 708 or (B) adversely affect the ability of the Special Limited
Partner to continue to qualify as a REIT or would subject the Special Limited Partner to any
additional taxes under Sections 857 or 4987 of the Code or (ii) such Transfer would be effectuated
through an “established securities market” or a “secondary market (or the substantial equivalent
thereof)” within the meaning of Code Section 7704.



     Section 11.4 Substituted Limited Partners.



     A. No Limited Partner shall have the right to substitute a transferee (including any
transferees pursuant to Transfers permitted by Section 11.3 hereof) as a Limited Partner in its
place. A transferee of the interest of a Limited Partner may be admitted as a Substituted Limited
Partner only with the consent of the Managing General Partner, which consent may be given or
withheld by the Managing General Partner in its sole and absolute discretion. The failure or
refusal by the Managing General Partner to permit a transferee of any such interests to become a
Substituted Limited Partner shall not give rise to any cause of action against the Partnership or
the Managing General Partner. Subject to the foregoing, an Assignee shall not be admitted as a
Substituted Limited Partner until and unless it furnishes to the Managing General Partner (i)
evidence of acceptance, in form and substance satisfactory to the Managing General Partner, of all
the terms, conditions and applicable obligations of this Agreement, (ii) a counterpart signature
page to this Agreement executed by such Assignee and (iii) such other documents and instruments as
may be required or advisable, in the sole and absolute discretion of the Managing General Partner,
to effect such Assignee’s admission as a Substituted Limited Partner.



58









 





     B. Concurrently with, and as evidence of, the admission of a Substituted Limited Partner, the
Managing General Partner shall amend Exhibit A and the books and records of the Partnership to
reflect the name, address and number of Partnership Units of such Substituted Limited Partner and
to eliminate or adjust, if necessary, the name, address and number of Partnership Units of the
predecessor of such Substituted Limited Partner.



     C. A transferee who has been admitted as a Substituted Limited Partner in accordance with this
Article 11 shall have all the rights and powers and be subject to all the restrictions and
liabilities of a Limited Partner under this Agreement.



     Section 11.5 Assignees. If the Managing General Partner, in its sole and absolute discretion,
does not consent to the admission of any permitted transferee under Section 11.3 hereof as a
Substituted Limited Partner, as described in Section 11.4 hereof, such transferee shall be
considered an Assignee for purposes of this Agreement. An Assignee shall be entitled to all the
rights of an assignee of a limited partnership interest under the Act, including the right to
receive distributions from the Partnership and the share of Net Income, Net Losses and other items
of income, gain, loss, deduction and credit of the Partnership attributable to the Partnership
Units assigned to such transferee and the rights to Transfer the Partnership Units provided in this
Article 11, but shall not be deemed to be a holder of Partnership Units for any other purpose under
this Agreement (other than as expressly provided in Section 15.1 hereof with respect to a
Qualifying Party that becomes a Tendering Party), and shall not be entitled to effect a Consent or
vote with respect to such Partnership Units on any matter presented to the Limited Partners for
approval (such right to Consent or vote, to the extent provided in this Agreement or under the Act,
fully remaining with the transferor Limited Partner). In the event that any such transferee desires
to make a further assignment of any such Partnership Units, such transferee shall be subject to all
the provisions of this Article 11 to the same extent and in the same manner as any Limited Partner
desiring to make an assignment of Partnership Units.



     Section 11.6 General Provisions.



     A. No Limited Partner may withdraw from the Partnership other than as a result of a Transfer
of all of such Limited Partner’s Partnership Units in accordance with this Article 11, with respect
to which the transferee becomes a Substituted Limited Partner, or pursuant to a redemption (or
acquisition by the Special Limited Partner) of all of its Partnership Units pursuant to a
Redemption under Section 15.1 hereof and/or pursuant to any Partnership Unit Designation.



     B. Any Limited Partner who shall Transfer all of its Partnership Units in a Transfer (i)
permitted pursuant to this Article 11 where such transferee was admitted as a Substituted Limited
Partner, (ii) pursuant to the exercise of its rights to effect a redemption of all of its
Partnership Units pursuant to a Redemption under Section 15.1 hereof and/or pursuant to any
Partnership Unit Designation or (iii) to the Special Limited Partner, whether or not pursuant to
Section 15.1.B hereof, shall cease to be a Limited Partner.



     C. If any Partnership Unit is Transferred in compliance with the provisions of this Article
11, or is redeemed by the Partnership, or acquired by the Special Limited Partner pursuant to
Section 15.1 hereof, on any day other than the first day of a Partnership Year, then Net Income,
Net Losses, each item thereof and all other items of income, gain, loss, deduction



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and credit attributable to such Partnership Unit for such Partnership Year shall be allocated
to the transferor Partner or the Tendering Party (as the case may be) and, in the case of a
Transfer other than a Redemption, to the transferee Partner, by taking into account their varying
interests during the Partnership Year in accordance with Code Section 706(d), using the “interim
closing of the books” method or another permissible method selected by the Managing General
Partner. Solely for purposes of making such allocations, each of such items for the calendar month
in which a Transfer occurs shall be allocated to the transferee Partner and none of such items for
the calendar month in which a Transfer or a Redemption occurs shall be allocated to the transferor
Partner, or the Tendering Party (as the case may be) if such Transfer occurs on or before the
fifteenth (15th) day of the month, otherwise such items shall be allocated to the transferor. All
distributions of Available Cash attributable to such Partnership Unit with respect to which the
Partnership Record Date is before the date of such Transfer, assignment or Redemption shall be made
to the transferor Partner or the Tendering Party (as the case may be) and, in the case of a
Transfer other than a Redemption, all distributions of Available Cash thereafter attributable to
such Partnership Unit shall be made to the transferee Partner.




     D. In addition to any other restrictions on Transfer herein contained, in no event may any
Transfer of a Partnership Interest by any Partner (including any Redemption, any acquisition of
Partnership Units by the Special Limited Partner or any other acquisition of Partnership Units by
the Partnership) be made: (i) to any person or entity who lacks the legal right, power or capacity
to own a Partnership Interest; (ii) in violation of applicable law; (iii) of any component portion
of a Partnership Interest, such as the Capital Account, or rights to distributions, separate and
apart from all other components of a Partnership Interest; (iv) in the event that such Transfer
would cause either the Special Limited Partner or any Special Limited Partner Affiliate to cease to
comply with the REIT Requirements or to cease to qualify as a “qualified REIT subsidiary” (within
the meaning of Code Section 856(i)(2)); (v) if such Transfer would, in the opinion of counsel to
the Partnership, the Managing General Partner or the Special Limited Partner, cause a termination
of the Partnership for Federal or state income tax purposes (except as a result of the Redemption
(or acquisition by the Special Limited Partner) of all Partnership Common Units held by all Limited
Partners); (vi) if such Transfer would, in the opinion of legal counsel to the Partnership, the
Managing General Partner or the Special Limited Partner, cause the Partnership to cease to be
classified as a partnership for Federal income tax purposes (except as a result of the Redemption
(or acquisition by the Special Limited Partner) of all Partnership Common Units held by all Limited
Partners (other than the Special Limited Partner)); (vii) if such Transfer would cause the
Partnership to become, with respect to any employee benefit plan subject to Title I of ERISA, a
“party-in-interest” (as defined in ERISA Section 3(14)) or a “disqualified person” (as defined in
Code Section 4975(c)); (viii) if such Transfer would, in the opinion of legal counsel to the
Partnership, the Managing General Partner or the Special Limited Partner, cause any portion of the
assets of the Partnership to constitute assets of any employee benefit plan pursuant to Department
of Labor Regulations Section 2510.3-101; (ix) if such Transfer requires the registration of such
Partnership Interest pursuant to any applicable Federal or state securities laws; (x) if such
Transfer causes the Partnership to become a “publicly traded partnership,” as such term is defined
in Code Section 469(k)(2) or Code 7704(b); (xi) if such Transfer causes the Partnership (as opposed
to the Special Limited Partner or the Managing General Partner) to become a reporting company under
the Exchange Act; or (xii) if such Transfer subjects the Partnership to regulation under the
Investment Company Act of 1940, the Investment Advisors Act of 1940 or ERISA, each as amended. The
Managing General Partner



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shall take all action necessary to avoid the Partnership from being classified as a “publicly
traded partnership” under Code Section 7704.




     E. Transfers pursuant to this Article 11 may only be made on the first day of a fiscal quarter
of the Partnership, unless the Managing General Partner otherwise agrees.



ARTICLE 12

ADMISSION OF PARTNERS




     Section 12.1 Admission of Successor Managing General Partner and Additional General Partners.



     A. A successor to all of the Managing General Partner’s General Partner Interest pursuant to
Section 11.1.C or Section 11.2 hereof who is proposed to be admitted as a successor Managing
General Partner shall be admitted to the Partnership as the Managing General Partner, effective
immediately prior to such Transfer. Any such successor shall carry on the business of the
Partnership without dissolution. In each case, the admission shall be subject to the successor
Managing General Partner executing and delivering to the Partnership an acceptance of all of the
terms and conditions of this Agreement and such other documents or instruments as may be required
to effect the admission.



     B. A successor to a portion of the Managing General Partner’s General Partner Interest
pursuant to Section 11.2.B hereof or any Person to be admitted as an Additional General Partner
pursuant to Section 4.2.A hereof who is proposed to be admitted as an Additional General Partner
shall be admitted to the Partnership as an Additional General Partner, effective immediately prior
to such Transfer. Any such Additional General Partner shall carry on the business of the
Partnership without dissolution. In each case, the admission shall be subject to the Additional
General Partner executing and delivering to the Partnership an acceptance of all of the terms and
conditions of this Agreement and such other documents or instruments as may be required to effect
the admission. Concurrently with, and as evidence of, the admission of an Additional General
Partner, the Managing General Partner shall amend Exhibit A and the books and records of the
Partnership to reflect the name, address and number of Partnership Units of such Additional General
Partner.



     Section 12.2 Admission of Additional Limited Partners.



     A. After the admission to the Partnership of an Original Limited Partner on the date hereof, a
Person (other than an existing Partner) who makes a Capital Contribution to the Partnership in
exchange for Partnership Units and in accordance with this Agreement shall be admitted to the
Partnership as an Additional Limited Partner only upon furnishing to the Managing General Partner
(i) evidence of acceptance, in form and substance satisfactory to the Managing General Partner, of
all of the terms and conditions of this Agreement, including, without limitation, the power of
attorney granted in Section 2.4 hereof, (ii) a counterpart signature page to this Agreement
executed by such Person and (iii) such other documents or instruments as may be required in the
sole and absolute discretion of the Managing General Partner in order to effect such Person’s
admission as an Additional Limited Partner. Concurrently with, and as evidence of, the admission of
an Additional Limited Partner, the Managing General



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Partner shall amend Exhibit A and the books and records of the Partnership to reflect the
name, address and number of Partnership Units of such Additional Limited Partner.




     B. Notwithstanding anything to the contrary in this Section 12.2, no Person shall be admitted
as an Additional Limited Partner without the consent of the Managing General Partner, which consent
may be given or withheld in the Managing General Partner’s sole and absolute discretion. The
admission of any Person as an Additional Limited Partner shall become effective on the date upon
which the name of such Person is recorded on the books and records of the Partnership, following
the consent of the Managing General Partner to such admission and the satisfaction of all the
conditions set forth in Section 12.2.A.



     C. If any Additional Limited Partner is admitted to the Partnership on any day other than the
first day of a Partnership Year, then Net Income, Net Losses, each item thereof and all other items
of income, gain, loss, deduction and credit allocable among Holders for such Partnership Year shall
be allocated among such Additional Limited Partner and all other Holders by taking into account
their varying interests during the Partnership Year in accordance with Code Section 706(d), using
the “interim closing of the books” method or another permissible method selected by the Managing
General Partner. Solely for purposes of making such allocations, each of such items for the
calendar month in which an admission of any Additional Limited Partner occurs shall be allocated
among all the Holders including such Additional Limited Partner, in accordance with the principles
described in Section 11.6.C hereof. All distributions of Available Cash with respect to which the
Partnership Record Date is before the date of such admission shall be made solely to Partners and
Assignees other than the Additional Limited Partner, and all distributions of Available Cash
thereafter shall be made to all the Partners and Assignees including such Additional Limited
Partner.



     D. Any Additional Limited Partner admitted to the Partnership that is an Affiliate of the
Managing General Partner shall be deemed to be a “Special Limited Partner Affiliate” hereunder and
shall be reflected as such on Exhibit A and the books and records of the Partnership.



     Section 12.3 Amendment of Agreement and Certificate of Limited Partnership. For the admission
to the Partnership of any Partner, the Managing General Partner shall take all steps necessary and
appropriate under the Act to amend the records of the Partnership and, if necessary, to prepare as
soon as practical an amendment of this Agreement (including an amendment of Exhibit A) and, if
required by law, shall prepare and file an amendment to the Certificate and may for this purpose
exercise the power of attorney granted pursuant to Section 2.4 hereof.



     Section 12.4 Limit on Number of Partners. Unless otherwise permitted by the Managing General
Partner in its sole and absolute discretion, no Person shall be admitted to the Partnership as an
Additional Limited Partner if the effect of such admission would be to cause the Partnership to
have a number of Partners that would cause the Partnership to become a reporting company under the
Exchange Act.



     Section 12.5 Admission. A Person shall be admitted to the Partnership as a Limited Partner of
the Partnership or a General Partner of the Partnership only upon strict compliance,



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and not upon substantial compliance, with the requirements set forth in this Agreement for
admission to the Partnership as an Additional Limited Partner or an Additional General Partner.




ARTICLE 13

DISSOLUTION, LIQUIDATION AND TERMINATION




     Section 13.1 Dissolution. The Partnership shall not be dissolved by the admission of
Substituted Limited Partners or Additional Limited Partners or by the admission of a successor
Managing General Partner or an Additional General Partner in accordance with the terms of this
Agreement. Upon the withdrawal of the Managing General Partner, any successor Managing General
Partner shall continue the business of the Partnership without dissolution. However, the
Partnership shall dissolve, and its affairs shall be wound up, upon the first to occur of any of
the following (each a “Liquidating Event”):



     A. an event of withdrawal, as defined in the Act (including, without limitation, bankruptcy),
of the last remaining Managing General Partner unless, within ninety (90) days after the
withdrawal, a Majority in Interest of the Partners remaining agree in writing, in their sole and
absolute discretion, to continue the business of the Partnership and to the appointment, effective
as of the date of withdrawal, of a successor Managing General Partner;



     B. an election to dissolve the Partnership made by the Managing General Partner in its sole
and absolute discretion, with or without the Consent of the Partners;



     C. entry of a decree of judicial dissolution of the Partnership pursuant to the provisions of
the Act;



     D. any sale or other disposition of all or substantially all of the assets of the Partnership
other than in the ordinary course of the Partnership’s business or a related series of transactions
that, taken together, result in the sale or other disposition of all or substantially all of the
assets of the Partnership other than in the ordinary course of the Partnership’s business;



     E. the Redemption (or acquisition by the Special Limited Partner) of all Partnership Units
other than Partnership Units held by the Managing General Partner or the Special Limited Partner.



     Section 13.2 Winding Up.



     A. Upon the occurrence of a Liquidating Event, the Partnership shall continue solely for the
purposes of winding up its affairs in an orderly manner, liquidating its assets and satisfying the
claims of its creditors and the Holders. After the occurrence of a Liquidating Event, no Holder
shall take any action that is inconsistent with, or not necessary to or appropriate for, the
winding up of the Partnership’s business and affairs. The Managing General Partner (or, in the
event that there is no remaining Managing General Partner or the Managing General Partner has
dissolved, become bankrupt within the meaning of the Act or ceased to operate, any Person elected
by a Majority in Interest of the Partners remaining (the Managing General Partner or such other
Person being referred to herein as the “Liquidator”) shall be responsible for overseeing the
winding up and dissolution of the Partnership and shall take full account of the Partnership’s
liabilities and property, and the Partnership property shall be liquidated as promptly



63









 




as is consistent with obtaining the fair value thereof, and the proceeds therefrom (which may,
to the extent determined by the Managing General Partner, include REIT Shares or Capital Shares)
shall be applied and distributed in the following order:





     (1) First, to the satisfaction of all of the Partnership’s Debts and liabilities to
creditors other than the Holders (whether by payment or the making of reasonable provision
for payment thereof);




     (2) Second, to the satisfaction of all of the Partnership’s Debts and liabilities to
the Managing General Partner and the Special Limited Partner (whether by payment or the
making of reasonable provision for payment thereof), including, but not limited to, amounts
due as reimbursements under Section 7.4 hereof;




     (3) Third, to the satisfaction of all of the Partnership’s Debts and liabilities to the
other Holders (whether by payment or the making of reasonable provision for payment
thereof);




     (4) Fourth, the balance, if any, to the Holders in accordance with and in proportion to
their positive Capital Account balances, after giving effect to all contributions,
distributions and allocations for all periods; provided, however, that it is the intent of
the Partners that liquidating distributions shall be made in the same manner as
distributions would be made under Section 5.1, and accordingly, to the extent that
distributions under Section 13.2.A(4) would result in different distributions than had all
liquidating distributions been made under Section 5.1, the Capital Accounts of the partners
shall be adjusted (including through allocations, or if necessary, credits or debits to
Capital Accounts) prior to the liquidating distributions being made to the extent necessary
to cause distributions made to each Partner under Section 13.2.A(4) to be the same as the
distributions that would have been made to such Partner had liquidating distributions been
made in accordance with Section 5.1.


The Managing General Partner shall not receive any additional compensation for any services
performed pursuant to this Article 13.




     B. Notwithstanding the provisions of Section 13.2.A hereof that require liquidation of the
assets of the Partnership, but subject to the order of priorities set forth therein, if prior to or
upon dissolution of the Partnership, the Liquidator determines that an immediate sale of part or
all of the Partnership’s assets would be impractical or would cause undue loss to the Holders, the
Liquidator may, in its sole and absolute discretion, defer for a reasonable time the liquidation of
any assets except those necessary to satisfy liabilities of the Partnership (including to those
Holders as creditors) and/or distribute to the Holders, in lieu of cash, as tenants in common and
in accordance with the provisions of Section 13.2.A hereof, undivided interests in such Partnership
assets as the Liquidator deems not suitable for liquidation. Any such distributions in kind shall
be made only if, in the good faith judgment of the Liquidator, such distributions in kind are in
the best interest of the Holders, and shall be subject to such conditions relating to the
disposition and management of such properties as the Liquidator deems reasonable and equitable and
to any agreements governing the operation of such properties at such time. The Liquidator



64









 




shall determine the fair market value of any property distributed in kind using such
reasonable method of valuation as it may adopt.




     C. In the event that the Partnership is “liquidated” within the meaning of Regulations Section
1.704-1(b)(2)(ii)(g), distributions shall be made pursuant to this Article 13 to the Holders that
have positive Capital Accounts in compliance with Regulations Section 1.704-1(b)(2)(ii)(b)(2) to
the extent of, and in proportion to, positive Capital Account balances, but distributions under
this clause (b) shall be subject to the proviso set forth above in Section 13.2.A(4). If any Holder
(other than the General Partner) has a deficit balance in its Capital Account (after giving effect
to all contributions, distributions and allocations for all taxable years, including the year
during which such liquidation occurs), such Holder shall have no obligation to make any
contribution to the capital of the Partnership with respect to such deficit, and such deficit shall
not be considered a Debt owed to the Partnership or to any other Person for any purpose whatsoever.
In the sole and absolute discretion of the Managing General Partner or the Liquidator, a pro rata
portion of the distributions that would otherwise be made to the Holders pursuant to this Article
13 may be:




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




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



     Section 13.3 Deemed Contribution and Distribution. Notwithstanding any other provision of
this Article 13, in the event that the Partnership is liquidated within the meaning of Regulations
Section 1.704-1(b)(2)(ii)(g), but no Liquidating Event has occurred, the Partnership’s Property
shall not be liquidated, the Partnership’s liabilities shall not be paid or discharged and the
Partnership’s affairs shall not be wound up. Instead, for Federal income tax purposes the
Partnership shall be deemed to have contributed all of its assets and liabilities to a new
partnership in exchange for an interest in the new partnership; and immediately thereafter,
distributed Partnership Units to the Partners in the new partnership in accordance with their
respective Capital Accounts in liquidation of the Partnership, and the new partnership is deemed to
continue the business of the Partnership. Nothing in this Section 13.3 shall be deemed to have
constituted any Assignee as a Substituted Limited Partner without compliance with the provisions of
Section 11.4 or Section 13.3 hereof.



     Section 13.4 Rights of Holders. Except as otherwise provided in this Agreement, (a) each
Holder shall look solely to the assets of the Partnership for the return of its Capital



65









 




Contribution, (b) no Holder shall have the right or power to demand or receive property other
than cash from the Partnership and (c) no Holder shall have priority over any other Holder as to
the return of its Capital Contributions, distributions or allocations.




     Section 13.5 Notice of Dissolution. In the event that a Liquidating Event occurs or an event
occurs that would, but for an election or objection by one or more Partners pursuant to Section
13.1 hereof, result in a dissolution of the Partnership, the Managing General Partner shall, within
thirty (30) days thereafter, provide written notice thereof to each Holder and, in the Managing
General Partner’s sole and absolute discretion or as required by the Act, to all other parties with
whom the Partnership regularly conducts business (as determined in the sole and absolute discretion
of the Managing General Partner), and the Managing General Partner may, or, if required by the Act,
shall, publish notice thereof in a newspaper of general circulation in each place in which the
Partnership regularly conducts business (as determined in the sole and absolute discretion of the
Managing General Partner).



     Section 13.6 Cancellation of Certificate of Limited Partnership. Upon the completion of the
liquidation of the Partnership cash and property as provided in Section 13.2 hereof, the
Partnership shall be terminated, a certificate of cancellation shall be filed with the State of
Delaware, all qualifications of the Partnership as a foreign limited partnership or association in
jurisdictions other than the State of Delaware shall be cancelled, and such other actions as may be
necessary to terminate the Partnership shall be taken.



     Section 13.7 Reasonable Time for Winding-Up. A reasonable time shall be allowed for the
orderly winding-up of the business and affairs of the Partnership and the liquidation of its assets
pursuant to Section 13.2 hereof, in order to minimize any losses otherwise attendant upon such
winding-up, and the provisions of this Agreement shall remain in effect between and among the
Partners during the period of liquidation.



ARTICLE 14

PROCEDURES FOR ACTIONS AND CONSENTS

OF PARTNERS; AMENDMENTS; MEETINGS




     Section 14.1 Procedures for Actions and Consents of Partners. The actions requiring Consent
or approval of Partners pursuant to this Agreement, including Section 7.3 hereof, or otherwise
pursuant to applicable law, are subject to the procedures set forth in this Article 14.



     Section 14.2 Amendments. Amendments to this Agreement may be proposed by the Managing General
Partner or by Limited Partners holding twenty-five percent (25%) or more of the Partnership
Interests held by Limited Partners (excluding the Partnership Interests held by the Special Limited
Partner) and, except as set forth in Section 7.3.C and subject to Section 7.3.D, shall be approved
by the Consent of the Partners. Following such proposal, the Managing General Partner shall submit
to the Partners entitled to vote thereon any proposed amendment that, pursuant to the terms of this
Agreement, requires the Consent, approval or vote of such Partners. The Managing General Partner
shall seek the written Consent, approval or vote of the Partners on any such proposed amendment or
shall call a meeting to vote thereon and to transact any other business that the Managing General
Partner may deem appropriate. For purposes of obtaining a written Consent, the Managing General
Partner may require a response within a



66









 




reasonable specified time, but not less than fifteen (15) days, and failure to respond in such
time period shall constitute a Consent that is consistent with the Managing General Partner’s
recommendation with respect to the proposal; provided, however, that an action shall become
effective at such time as requisite Consents are received even if prior to such specified time.




     Section 14.3 Meetings of the Partners.



     A. Meetings of the Partners may be called only by the Managing General Partner. The call shall
state the nature of the business to be transacted. Notice of any such meeting shall be given to all
Partners entitled to act at the meeting not less than seven (7) days nor more than sixty (60) days
prior to the date of such meeting. Partners may vote in person or by proxy at such meeting.
Whenever the vote, Consent or approval of Partners is permitted or required under this Agreement,
such vote, Consent or approval may be given at a meeting of Partners or may be given in accordance
with the procedure prescribed in Section 14.3.B hereof.



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



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



     D. Each meeting of Partners shall be conducted by the Managing General Partner or such other
Person as the Managing General Partner may appoint pursuant to such rules for the conduct of the
meeting as the Managing General Partner or such other Person deems appropriate in its sole and
absolute discretion. Without limitation, meetings of Partners may be conducted in the same manner
as meetings of the Special Limited Partner’s stockholders and may be held at the same time as, and
as part of, the meetings of the Special Limited Partner’s stockholders.



ARTICLE 15

GENERAL PROVISIONS




     Section 15.1 Redemption Rights of Qualifying Parties.



     A. Commencing on the expiration of the Twelve-Month Period applicable to any Partnership
Common Units, a Qualifying Party shall have the right (subject to the terms and



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conditions set forth herein), by delivering a Notice of Redemption to the Managing General
Partner, to require the Partnership to redeem all or a portion of such Partnership Common Units
held by such Tendering Party (Partnership Common Units that have in fact been tendered for
redemption being hereafter referred to as “Tendered Units”) in exchange (a “Redemption”) for the
Cash Amount payable on the Specified Redemption Date. The Partnership may, in the Managing General
Partner’s sole and absolute discretion, redeem Tendered Units at the request of the Holder prior to
the end of the applicable Twelve-Month Period (subject to the terms and conditions set forth
herein) (a “Special Redemption”); provided, however, that the Managing General Partner first
receives a legal opinion to the same effect as the legal opinion described in Section 15.1.G(4) of
this Agreement. Any Redemption shall be exercised pursuant to a Notice of Redemption delivered to
the Managing General Partner and the Special Limited Partner by the Qualifying Party when
exercising the Redemption right (the “Tendering Party”). The Partnership’s obligation to effect a
Redemption, however, shall not arise or be binding against the Partnership until the earlier of (i)
the date the Special Limited Partner notifies the Tendering Party that the Special Limited Partner
declines to acquire some or all of the Tendered Units under Section 15.1.B hereof following receipt
of a Notice of Redemption and (ii) the Business Day following the Cut-Off Date. In the event of a
Redemption, the Cash Amount shall be delivered as a certified or bank check payable to the
Tendering Party or, in the Managing General Partner’s sole and absolute discretion, in immediately
available funds, in each case, on or before the Specified Redemption Date.




     B. Notwithstanding the provisions of Section 15.1.A hereof, on or before the close of business
on the Cut-Off Date, the Special Limited Partner may, in its sole and absolute discretion, but
subject to the Ownership Limit and the availability of authorized but unissued REIT Shares, elect
to acquire some or all (such percentage being referred to as the “Applicable Percentage”) of the
Tendered Units from the Tendering Party in exchange for REIT Shares. If the Special Limited Partner
chooses to acquire some or all of the Tendered Units pursuant to this Section 15.1.B, the Special
Limited Partner shall give written notice thereof to the Managing General Partner and the Tendering
Party on or before the close of business on the Cut-Off Date. If the Special Limited Partner elects
to acquire any of the Tendered Units for REIT Shares, the Special Limited Partner shall issue and
deliver such REIT Shares to the Tendering Party pursuant to the terms of this Section 15.1.B, in
which case (1) the Special Limited Partner shall satisfy the Tendering Party’s exercise of its
Redemption right with respect to such Tendered Units and (2) such transaction shall be treated, for
Federal income tax purposes, as a transfer by the Tendering Party of such Tendered Units to the
Special Limited Partner in exchange for the REIT Shares Amount. If the Special Limited Partner so
elects, on the Specified Redemption Date, the Tendering Party shall sell such number of the
Tendered Units to the Special Limited Partner in exchange for a number of REIT Shares equal to the
product of the REIT Shares Amount and the Applicable Percentage. The Tendering Party shall submit
(i) such information, certification or affidavit as the Special Limited Partner may reasonably
require in connection with the application of the Ownership Limit and (ii) such written
representations, investment letters, legal opinions or other instruments necessary, in the Special
Limited Partner’s view, to effect compliance with the Securities Act. In the event of a purchase of
the Tendered Units by the Special Limited Partner pursuant to this Section 15.1.B, the Tendering
Party shall no longer have the right to cause the Partnership to effect a Redemption of such
Tendered Units, and, upon notice to the Tendering Party by the Special Limited Partner, given on or
before the close of business on the Cut-Off Date, that the Special Limited Partner has elected to
acquire some or all



68









 




of the Tendered Units pursuant to this Section 15.1.B, the obligation of the Partnership to
effect a Redemption of the Tendered Units to be acquired by the Special Limited Partner shall not
accrue or arise. A number of REIT Shares equal to the product of the Applicable Percentage and the
REIT Shares Amount, if applicable, shall be delivered by the Special Limited Partner, which shall
be duly authorized, validly issued, fully paid and non-assessable REIT Shares and, if applicable,
Rights, free of any pledge, lien, encumbrance or restriction, other than the Ownership Limit, the
Securities Act and relevant state securities or “blue sky” laws. Neither any Tendering Party whose
Tendered Units are acquired by the Special Limited Partner pursuant to this Section 15.1.B, any
Partner, any Assignee nor any other interested Person shall have any right to require or cause the
Special Limited Partner to register, qualify or list any REIT Shares owned or held by such Person,
whether or not such REIT Shares are issued pursuant to this Section 15.1.B, with the SEC, with any
state securities commissioner, department or agency, under the Securities Act or the Exchange Act
or with any stock exchange; provided, however, that this limitation shall not be in derogation of
any registration or similar rights granted pursuant to any other written agreement between the
Special Limited Partner and any such Person. Notwithstanding any delay in such delivery, the
Tendering Party shall be deemed the owner of such REIT Shares and Rights for all purposes,
including, without limitation, rights to vote or consent, receive dividends, and exercise rights,
as of the Specified Redemption Date. REIT Shares issued upon an acquisition of the Tendered Units
by the Special Limited Partner pursuant to this Section 15.1.B may contain such legends regarding
restrictions under the Charter, the Securities Act and applicable state securities laws as the
Special Limited Partner in good faith determines to be necessary or advisable in order to ensure
compliance with the Charter and such laws.




     C. Notwithstanding the provisions of Section 15.1.A and 15.1.B hereof, the Tendering Parties
shall have no rights under this Agreement that would otherwise be prohibited under the Charter with
respect to the Ownership Limit. To the extent that any attempted Redemption or acquisition of the
Tendered Units by the Special Limited Partner pursuant to Section 15.1.B hereof would be in
violation of this Section 15.1.C, it shall be null and void ab initio, and the Tendering Party
shall not acquire any rights or economic interests in REIT Shares otherwise issuable by the Special
Limited Partner under Section 15.1.B hereof or cash otherwise payable under Section 15.1.A hereof.



     D. If the Special Limited Partner does not choose to acquire the Tendered Units pursuant to
Section 15.1.B hereof:




     (1) The Partnership may elect to raise funds for the payment of the Cash Amount either
(a) by requiring that the Special Limited Partner contribute to the Partnership funds from
the proceeds of a registered public offering by the Special Limited Partner of REIT Shares
sufficient to purchase the Tendered Units or (b) from any other sources (including, but not
limited to, the sale of any Property and the incurrence of additional Debt) available to the
Partnership. Any proceeds from a public offering that are in excess of the Cash Amount shall
be for the sole benefit of the Special Limited Partner. The Special Limited Partner shall
make a Capital Contribution of any such amounts to the Partnership for an additional Limited
Partner Interest. Any such contribution shall entitle the Special Limited Partner to an
equitable Percentage Interest adjustment.



69









 






     (2) If the Cash Amount is not paid on or before the Specified Redemption Date, interest
shall accrue with respect to the Cash Amount from the day after the Specified Redemption
Date to and including the date on which the Cash Amount is paid at a rate equal to 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 (but not higher than the maximum lawful rate).



     E. Notwithstanding the provisions of Section 15.1.B hereof, the Special Limited Partner shall
not elect to acquire any Tendered Units in exchange for REIT Shares if such exchange would be
prohibited under the Charter.



     F. Notwithstanding anything herein to the contrary (but subject to Section 15.1.C hereof),
with respect to any Redemption (or any tender of Partnership Common Units for Redemption if the
Tendered Units are acquired by the Special Limited Partner pursuant to Section 15.1.B hereof)
pursuant to this Section 15.1:




     (1) All Partnership Common Units acquired by the Special Limited Partner pursuant to
Section 15.1.B hereof shall automatically, and without further action required, be converted
into and deemed to be a Special Limited Partner’s Partner Interest comprised of the same
number of Partnership Common Units.




     (2) Subject to the Ownership Limit, no Tendering Party may effect a Redemption for less
than one thousand (1,000) Partnership Common Units or, if such Tendering Party holds (as a
Limited Partner or, economically, as an Assignee) less than one thousand (1,000) Partnership
Common Units, all of the Partnership Common Units held by such Tendering Party, unless, in
each case, otherwise agreed to by the Managing General Partner in its sole and absolute
discretion.




     (3) If (i) a Tendering Party surrenders its Tendered Units during the period after the
Partnership Record Date with respect to a distribution and before the record date
established by the Special Limited Partner for a distribution to its stockholders of some or
all of its portion of such Partnership distribution, and (ii) the Special Limited Partner
elects to acquire any of such Tendered Units in exchange for REIT Shares pursuant to Section
15.1.B, such Tendering Party shall pay to the Special Limited Partner on the Specified
Redemption Date an amount in cash equal to the portion of the Partnership distribution in
respect of the Tendered Units exchanged for REIT Shares, insofar as such distribution
relates to the same period for which such Tendering Party would receive a distribution in
respect of such REIT Shares.




     (4) The consummation of such Redemption (or an acquisition of Tendered Units by the
Special Limited Partner pursuant to Section 15.1.B hereof, as the case may be) shall be
subject to the expiration or termination of the applicable waiting period, if any, under the
Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended.




     (5) The Tendering Party shall continue to own (subject, in the case of an Assignee, to
the provisions of Section 11.5 hereof) all Partnership Common Units subject to any
Redemption, and be treated as a Limited Partner or an Assignee, as applicable,



70









 







with respect to such Partnership Common Units for all purposes of this Agreement, until
such Partnership Common Units are either paid for by the Partnership pursuant to Section
15.1.A hereof or transferred to the Special Limited Partner and paid for, by the issuance of
the REIT Shares, pursuant to Section 15.1.B hereof on the Specified Redemption Date. Until a
Specified Redemption Date and an acquisition of the Tendered Units by the Special Limited
Partner pursuant to Section 15.1.B hereof, the Tendering Party shall have no rights as a
stockholder of the Special Limited Partner with respect to the REIT Shares issuable in
connection with such acquisition.



     G. In connection with an exercise of Redemption rights pursuant to this Section 15.1, the
Tendering Party shall submit the following to the Managing General Partner and the Special Limited
Partner, in addition to the Notice of Redemption:




     (1) A written affidavit, dated the same date as the Notice of Redemption, (a)
disclosing the actual and constructive ownership, as determined for purposes of Code
Sections 856(a)(6) and 856(h), of REIT Shares by (i) such Tendering Party and (ii) to the
best of their knowledge any Related Party and (b) representing that, after giving effect to
the Redemption or an acquisition of the Tendered Units by the Special Limited Partner
pursuant to Section 15.1.B hereof, neither the Tendering Party nor to the best of their
knowledge any Related Party will own REIT Shares in excess of the Ownership Limit;




     (2) A written representation that neither the Tendering Party nor to the best of their
knowledge any Related Party has any intention to acquire any additional REIT Shares prior to
the closing of the Redemption or an acquisition of the Tendered Units by the Special Limited
Partner pursuant to Section 15.1.B hereof on the Specified Redemption Date; and




     (3) An undertaking to certify, at and as a condition to the closing of (i) the
Redemption or (ii) the acquisition of the Tendered Units by the Special Limited Partner
pursuant to Section 15.1.B hereof on the Specified Redemption Date, that either (a) the
actual and constructive ownership of REIT Shares by the Tendering Party and to the best of
their knowledge any Related Party remain unchanged from that disclosed in the affidavit
required by Section 15.1.G(1) or (b) after giving effect to the Redemption or an acquisition
of the Tendered Units by the Special Limited Partner pursuant to Section 15.1.B hereof,
neither the Tendering Party nor to the best of their knowledge any Related Party shall own
REIT Shares in violation of the Ownership Limit.




     (4) In connection with any Special Redemption, the Special Limited Partner shall have
the right to receive an opinion of counsel reasonably satisfactory to it to the effect that
the proposed Special Redemption will not cause the Partnership, the Managing General Partner
or the Special Limited Partner to violate any Federal or state securities laws or
regulations applicable to the Special Redemption, the issuance and sale of the Tendered
Units to the Tendering Party or the issuance and sale of REIT Shares to the Tendering Party
pursuant to Section 15.1.B of this Agreement.



     Section 15.2 Addresses and Notice. Any notice, demand, request or report required or
permitted to be given or made to a Partner or Assignee under this Agreement shall be in writing




71












 




and shall be deemed given or made when delivered in person or when sent by first class
United States mail or by other means of written communication (including by telecopy, facsimile, or
commercial courier service) to the Partner, or Assignee at the address set forth in Exhibit A or
such other address of which the Partner shall notify the Managing General Partner in writing.




     Section 15.3 Titles and Captions. All article or section titles or captions in this Agreement
are for convenience only. They shall not be deemed part of this Agreement and in no way define,
limit, extend or describe the scope or intent of any provisions hereof. Except as specifically
provided otherwise, references to “Articles” or “Sections” are to Articles and Sections of this
Agreement.



     Section 15.4 Pronouns and Plurals. Whenever the context may require, any pronouns used in
this Agreement shall include the corresponding masculine, feminine or neuter forms, and the
singular form of nouns, pronouns and verbs shall include the plural and vice versa.



     Section 15.5 Further Action. The parties shall execute and deliver all documents, provide all
information and take or refrain from taking action as may be necessary or appropriate to achieve
the purposes of this Agreement.



     Section 15.6 Binding Effect. This Agreement shall be binding upon and inure to the benefit of
the parties hereto and their heirs, executors, administrators, successors, legal representatives
and permitted assigns.



     Section 15.7 Waiver.



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



     B. The restrictions, conditions and other limitations on the rights and benefits of the
Limited Partners contained in this Agreement, and the duties, covenants and other requirements of
performance or notice by the Limited Partners, are for the benefit of the Partnership and, except
for an obligation to pay money to the Partnership, may be waived or relinquished by the Managing
General Partner, in its sole and absolute discretion, on behalf of the Partnership in one or more
instances from time to time and at any time; provided, however, that any such waiver or
relinquishment may not be made if it would have the effect of (i) creating liability for any other
Limited Partner, (ii) causing the Partnership to cease to qualify as a limited partnership, (iii)
reducing the amount of cash otherwise distributable to the Limited Partners (other than any such
reduction that affects all of the Limited Partners holding the same class or series of Partnership
Units on a uniform or pro rata basis, if approved by a Majority in Interest of the Partners holding
such class or series of Partnership Units), (iv) resulting in the classification of the Partnership
as an association or publicly traded partnership taxable as a corporation or (v) violating the
Securities Act, the Exchange Act or any state “blue sky” or other securities laws; and provided,
further, that any waiver relating to compliance with the Ownership Limit shall be made and shall be
effective only as provided in the Charter.



72









 





     Section 15.8 Counterparts. This Agreement may be executed in counterparts, all of which
together shall constitute one agreement binding on all the parties hereto, notwithstanding that all
such parties are not signatories to the original or the same counterpart. Each party shall become
bound by this Agreement immediately upon affixing its signature hereto.



     Section 15.9 Applicable Law; Consent to Jurisdiction; Waiver of Jury Trial.



     A. This Agreement shall be construed and enforced in accordance with and governed by the laws
of the State of Delaware, without regard to the principles of conflicts of law. In the event of a
conflict between any provision of this Agreement and any non-mandatory provision of the Act, the
provisions of this Agreement shall control and take precedence.



     B. Each Partner hereby (i) submits to the non-exclusive jurisdiction of any state or federal
court sitting in the State of Delaware (collectively, the “Delaware Courts”), with respect to any
dispute arising out of this Agreement or any transaction contemplated hereby to the extent such
courts would have subject matter jurisdiction with respect to such dispute, (ii) irrevocably
waives, and agrees not to assert by way of motion, defense, or otherwise, in any such action, any
claim that it is not subject personally to the jurisdiction of any of the Delaware Courts, that its
property is exempt or immune from attachment or execution, that the action is brought in an
inconvenient forum, or that the venue of the action is improper, (iii) agrees that notice or the
service of process in any action, suit or proceeding arising out of or relating to this Agreement
or the transactions contemplated hereby shall be properly served or delivered if delivered to such
Partner at such Partner’s last known address as set forth in the Partnership’s books and records,
and (iv) irrevocably waives any and all right to trial by jury in any legal proceeding arising out
of or related to this Agreement or the transactions contemplated hereby.



     Section 15.10 Entire Agreement. This Agreement contains all of the understandings and
agreements between and among the Partners with respect to the subject matter of this Agreement and
the rights, interests and obligations of the Partners with respect to the Partnership.
Notwithstanding the immediately preceding sentence, the Partners hereby acknowledge and agree that
the Managing General Partner, without the approval of any Limited Partner, may enter into side
letters or similar written agreements with Limited Partners that are not Affiliates of the Managing
General Partner or the Special Limited Partner, executed contemporaneously with the admission of
such Limited Partner to the Partnership, affecting the terms hereof, as negotiated with such
Limited Partner and which the Managing General Partner in its sole discretion deems necessary,
desirable or appropriate. The parties hereto agree that any terms, conditions or provisions
contained in such side letters or similar written agreements with a Limited Partner shall govern
with respect to such Limited Partner notwithstanding the provisions of this Agreement.



     Section 15.11 Invalidity of Provisions. If any provision of this Agreement is or becomes
invalid, illegal or unenforceable in any respect, the validity, legality and enforceability of the
remaining provisions contained herein shall not be affected thereby.



     Section 15.12 Limitation to Preserve REIT Qualification. Notwithstanding anything else in
this Agreement, to the extent that the amount paid, credited, distributed or reimbursed by the
Partnership to any REIT Partner or its officers, directors, employees or agents, whether as a



73









 




reimbursement, fee, expense or indemnity (a “REIT Payment”), would constitute gross income to
the REIT Partner for purposes of Code Section 856(c)(2) or Code Section 856(c)(3), then,
notwithstanding any other provision of this Agreement, the amount of such REIT Payments, as
selected by the Managing General Partner in its discretion from among items of potential
distribution, reimbursement, fees, expenses and indemnities, shall be reduced for any Partnership
Year so that the REIT Payments, as so reduced, for or with respect to such REIT Partner shall not
exceed the lesser of:





     (i) an amount equal to the excess, if any, of (a) four and nine-tenths percent (4.9%)
of the REIT Partner’s total gross income (but excluding the amount of any REIT Payments) for
the Partnership Year that is described in subsections (A) through (I) of Code Section
856(c)(2) over (b) the amount of gross income (within the meaning of Code Section 856(c)(2))
derived by the REIT Partner from sources other than those described in subsections (A)
through (I) of Code Section 856(c)(2) (but not including the amount of any REIT Payments);
or




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


provided, however, that REIT Payments in excess of the amounts set forth in clauses (i) and (ii)
above may be made if the Managing General Partner, as a condition precedent, obtains an opinion of
tax counsel that the receipt of such excess amounts shall not adversely affect the REIT Partner’s
ability to qualify as a REIT. To the extent that REIT Payments may not be made in a Partnership
Year as a consequence of the limitations set forth in this Section 15.12, such REIT Payments shall
carry over and shall be treated as arising in the following Partnership Year if such carry over
does not adversely affect the REIT Partner’s ability to qualify as a REIT. The purpose of the
limitations contained in this Section 15.12 is to prevent any REIT Partner from failing to qualify
as a REIT under the Code by reason of such REIT Partner’s share of items, including distributions,
reimbursements, fees, expenses or indemnities, receivable directly or indirectly from the
Partnership, and this Section 15.12 shall be interpreted and applied to effectuate such purpose.




     Section 15.13 REIT Restrictions. Each Affiliated REIT is a REIT and is subject to the
provisions of Sections 856 through and including 860 of the Code. So long as an Affiliated REIT
owns, directly or indirectly, any interest in the Partnership, then notwithstanding any other
provision of this Agreement:




     (i) any services that would otherwise cause any rents from a lease to be excluded from
treatment as rents from real property pursuant to Section 856(d)(2)(C) of the Code shall be
provided by either (1) an independent contractor (as described in Section 856(d)(3) of the
Code) with respect to such Affiliated REIT and from whom neither the Partnership nor such
Affiliated REIT derives or receives any income or (2) a



74









 






taxable REIT subsidiary of such Affiliated REIT as described in Section 856(l) of the
Code;




     (ii) except for a taxable REIT subsidiary of an Affiliated REIT, the Partnership shall
not own, directly or indirectly or by attribution (in accordance with attribution rules
referred to in Section 856(d)(5) of the Code), in the aggregate ten percent (10%) or more of
the total value of all classes of stock or ten percent (10%) or more of the total voting
power (or, with respect to any such person which is not a corporation, an interest of ten
percent (10%) or more in the assets or net profits of such person) of a lessee or sublessee
of all or any part of the Property or of any other assets of the Partnership except in each
case with the specific written approval of each Affiliated REIT;




     (iii) except for securities of a taxable REIT subsidiary of an Affiliated REIT, the
Partnership shall not own or acquire, directly or indirectly or by attribution, ten percent
(10%) or more of the total value or the total voting power of the outstanding securities of
any issuer or own any other asset (including a security) which would cause the Affiliated
REIT to fail the asset test of Section 856(c)(4)(B) of the Code; and




     (iv) leases entered into by the Partnership or any of its Subsidiary partnerships,
limited partnerships, and limited liability companies shall provide for rents that qualify
as “rents from real property” within the meaning of Section 856(d) of the Code with respect
to each Affiliated REIT.



     Section 15.14 No Partition. No Partner nor any successor-in-interest to a Partner shall have
the right while this Agreement remains in effect to have any property of the Partnership
partitioned, or to file a complaint or institute any proceeding at law or in equity to have such
property of the Partnership partitioned, and each Partner, on behalf of itself and its successors
and assigns hereby waives any such right. It is the intention of the Partners that the rights of
the parties hereto and their successors-in-interest to Partnership property, as among themselves,
shall be governed by the terms of this Agreement, and that the rights of the Partners and their
respective successors-in-interest shall be subject to the limitations and restrictions as set forth
in this Agreement.



     Section 15.15 No Third-Party Rights Created Hereby. The provisions of this Agreement are
solely for the purpose of defining the interests of the Holders, inter se; and no other person,
firm or entity (i.e., a party who is not a signatory hereto or a permitted successor to such
signatory hereto) shall have any right, power, title or interest by way of subrogation or
otherwise, in and to the rights, powers, title and provisions of this Agreement. No creditor or
other third party having dealings with the Partnership (other than as expressly set forth herein
with respect to Indemnitees) shall have the right to enforce the right or obligation of any Partner
to make Capital Contributions or loans to the Partnership or to pursue any other right or remedy
hereunder or at law or in equity. 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 any 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 any of the Partners.



75









 





     Section 15.16 No Rights as Stockholders. Nothing contained in this Agreement shall be
construed as conferring upon the Holders of Partnership Units any rights whatsoever as stockholders
of the Special Limited Partner, including without limitation any right to receive dividends or
other distributions made to stockholders of the Special Limited Partner or to vote or to consent or
receive notice as stockholders in respect of any meeting of stockholders for the election of
directors of the Special Limited Partner or any other matter.



     Section 15.17 Preparation of Agreement. Briggs and Morgan, Professional Association
(“Briggs”) is representing the Partnership, the Managing General Partner and the Special Limited
Partner in connection with this Agreement. By signing this Agreement, each Partner (other than the
Managing General Partner and the Special Limited Partner, but including each Additional Limited
Partner, Additional General Partner or Substituted Limited Partner as a condition to becoming an
Additional Limited Partner, Additional General Partner or a Substituted Limited Partner),
acknowledges and agrees that it has been advised that Briggs is not representing such Limited
Partner or General Partner in connection with this Agreement and that such Partner’s interests in
connection with this Agreement may be adverse to, or in conflict with, the interests of the
Partnership, the Managing General Partner, the Special Limited Partner or the other Partners. Each
Partner (other than the Managing General Partner and the Special Limited Partner, but including
each Additional Limited Partner, Additional General Partner or Substituted Limited Partner as a
condition to becoming an Additional Limited Partner, Additional General Partner or a Substituted
Limited Partner) further acknowledges that it has been advised to seek separate counsel in
connection with this Agreement because of the adverse and conflicting interests that may exist or
that may arise in the future. The Partnership and the Partners each agree that, to the extent the
Partnership or such Partner is represented by Briggs on matters unrelated to this Agreement, the
Partnership and each such Partner consents to Briggs’ representation of the Partnership, the
Managing General Partner and the Special Limited Partner in connection with this Agreement, waives
any conflict of interest and agrees that the duty of loyalty of Briggs in connection with this
Agreement shall be owed solely to the Partnership, the Managing General Partner and the Special
Limited Partner.



[Remainder of Page Left Blank Intentionally]






76









 








     IN WITNESS WHEREOF, this Agreement has been executed as of the date first written above.



	 	 	 	 	 
	 	Managing General Partner:




WELSH PROPERTY TRUST, LLC,

 a Delaware limited
liability company


 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Its: 	 
	 
	 
	 	Special Limited Partner:





WELSH PROPERTY TRUST, INC.,

 a Maryland
corporation


 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Its: 	 
	 
	 
	 	LIMITED PARTNER:


 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Its: 	 
	 
	 
	 	LIMITED PARTNER


 	 
	 	 	 
	 	Name 	 
	 	 	 	 



77









 






	 	 	 	 	 



Exhibit A

PARTNERS AND PARTNERSHIP UNITS




	 	 	 
	Name and Address of Partners	 	Partnership Units (type and amount)
	Managing General Partner:
	 	 
	 
	 	 
	Welsh Property Trust, LLC

	 	                     Partnership Common Units
	4350 Baker Road
	 	 
	Suite 400
	 	 
	Minnetonka, MN 55343-8695
	 	 
	 
	 	 
	Special Limited Partner:
	 	 
	 
	 	 
	Welsh Property Trust, Inc.

	 	                     Partnership Common Units
	4350 Baker Road
	 	 
	Suite 400
	 	 
	Minnetonka, MN 55343-8695
	 	 
	 
	 	 
	Limited Partners:
	 	 
	 
	 	 
	 
	 
	 	 
	 
	 
	 	 
	 
	 
	 	 
	 
	 
	 	 
	 
	 
	 	 
	 
	 
	 	 
	 
	 
	 	 
	 
	 
	 	 
	 
	 
	 	 
	 
	 
	 	 
	 
	 
	 	 
	TOTAL:

	 	                     Partnership Common Units











A-1









 








Exhibit B

EXAMPLES REGARDING ADJUSTMENT FACTOR



For purposes of the following examples, it is assumed that (a) the Adjustment Factor in effect on
[                    ], 20___ is 1.0 and (b) on [                    , 20___] (the “Partnership Record Date” for purposes
of these examples), prior to the events described in the examples, there are 100 REIT Shares issued
and outstanding.




Example 1



On the Partnership Record Date, the Special Limited Partner declares a dividend on its outstanding
REIT Shares in REIT Shares. The amount of the dividend is one REIT Share paid in respect of each
REIT Share owned. Pursuant to Paragraph (i) of the definition of “Adjustment Factor,” the
Adjustment Factor shall be adjusted on the Partnership Record Date, effective immediately after the
stock dividend is declared, as follows:




     1.0 * 200/100 = 2.0


Accordingly, the Adjustment Factor after the stock dividend is declared is 2.0.




Example 2



On the Partnership Record Date, the Special Limited Partner distributes options to purchase REIT
Shares to all holders of its REIT Shares. The amount of the distribution is one option to acquire
one REIT Share in respect of each REIT Share owned. The strike price is $4.00 a share. The Value of
a REIT Share on the Partnership Record Date is $5.00 per share. Pursuant to Paragraph (ii) of the
definition of “Adjustment Factor,” the Adjustment Factor shall be adjusted on the Partnership
Record Date, effective immediately after the options are distributed, as follows:




     1.0 * (100 + 100)/(100 + [100 * $4.00/$5.00]) = 1.1111


Accordingly, the Adjustment Factor after the options are distributed is 1.1111. If the options
expire or become no longer exercisable, then the retroactive adjustment specified in Paragraph (ii)
of the definition of “Adjustment Factor” shall apply.




Example 3



On the Partnership Record Date, the Special Limited Partner distributes assets to all holders of
its REIT Shares. The amount of the distribution is one asset with a fair market value (as
determined by the Managing General Partner) of $1.00 in respect of each REIT Share owned. It is
also assumed that the assets do not relate to assets received by the Managing General Partner
pursuant to a pro rata distribution by the Partnership. The Value of a REIT Share on the
Partnership Record Date is $5.00 a share. Pursuant to Paragraph (iii) of the definition of
“Adjustment Factor,” the Adjustment Factor shall be adjusted on the Partnership Record Date,
effective immediately after the assets are distributed, as follows:




     1.0 * $5.00/($5.00 — $1.00) = 1.25


Accordingly, the Adjustment Factor after the assets are distributed is 1.25.









B-1









 








Exhibit C

NOTICE OF REDEMPTION




	 	 	 

	To:
	 	Welsh Property Trust, LLC

	 	 	4350 Baker Road

	 	 	Suite 400

	 	 	Minnetonka, MN 55343-8695







     The undersigned Limited Partner or Assignee hereby irrevocably tenders for Redemption ___
Partnership Common Units in Welsh Property Trust, L.P. in accordance with the terms of the
Agreement of Limited Partnership of Welsh Property Trust, L.P., dated as of [                    ], 20___ as
amended (the “Agreement”), and the Redemption rights referred to therein. The undersigned Limited
Partner or Assignee:



     (a) undertakes (i) to surrender such Partnership Common Units and any certificate therefor at
the closing of the Redemption and (ii) to furnish to the Managing General Partner, prior to the
Specified Redemption Date, the documentation, certifications, instruments and information required
under Section 15.1.G of the Agreement;



     (b) directs that the certified check representing the Cash Amount, or the REIT Shares Amount,
as applicable, deliverable upon the closing of such Redemption be delivered to the address
specified below;



     (c) represents, warrants, certifies and agrees that:




     (i) the undersigned Limited Partner or Assignee is a Qualifying Party,




     (ii) the undersigned Limited Partner or Assignee has, and at the closing of the
Redemption will have, good, marketable and unencumbered title to such Partnership Common
Units, free and clear of the rights or interests of any other person or entity,




     (iii) the undersigned Limited Partner or Assignee has, and at the closing of the
Redemption will have, the full right, power and authority to tender and surrender such
Partnership Common Units as provided herein, and




     (iv) the undersigned Limited Partner or Assignee has obtained the consent or approval
of all persons and entities, if any, having the right to consent to or approve such tender
and surrender; and



     (d) acknowledges that he will continue to own such Partnership Common Units until and unless
either (1) such Partnership Common Units are acquired by the Special Limited Partner pursuant to
Section 15.1.B of the Agreement or (2) such Redemption transaction closes.



     All capitalized terms used herein and not otherwise defined shall have the same meaning
ascribed to them respectively in the Agreement.



C-1









 





	 	 	 	 	 
	Dated:                                          	Name of Limited Partner or Assignee:

 	 
	 	 	 
	 	 	 	 
	 	
 	 
	 	(Signature of Limited Partner or Assignee) 	 
	 	 	 	 
	 
	 	
 	 
	 	(Street Address) 	 
	 	 	 
	 	
 	 
	 	(City)            (State)            (Zip Code) 	 
	 	 	 	 
	 
	 	Signature Guaranteed by:

 	 
	 	 	 
	 	 	 
	 	
 	 
	 	 	 	 
	 	 	 	 
	 


Issue Check Payable to:




Please insert social security
or identifying number:





C-2