exv10w1






EXHIBIT 10.1




FORM OF




LIMITED PARTNERSHIP AGREEMENT




OF




HINES GLOBAL REIT PROPERTIES LP




A DELAWARE LIMITED PARTNERSHIP




                                        , 200_





 









 








TABLE OF CONTENTS




	 	 	 	 	 	 	 
	Article 1 DEFINED TERMS	 	 	2	 
	Article 2 PARTNERSHIP FORMATION AND IDENTIFICATION	 	 	11	 
	2.1
	 	Formation	 	 	11	 
	2.2
	 	Name, Office and Registered Agent	 	 	11	 
	2.3
	 	Partners	 	 	11	 
	2.4
	 	Term and Dissolution	 	 	11	 
	2.5
	 	Filing of Certificate and Perfection of Limited Partnership	 	 	12	 
	2.6
	 	Certificates Describing Partnership Units and Special OP Units	 	 	12	 
	Article 3 BUSINESS OF THE PARTNERSHIP	 	 	12	 
	Article 4 CAPITAL CONTRIBUTIONS AND ACCOUNTS	 	 	13	 
	4.1
	 	Capital Contributions	 	 	13	 
	4.2
	 	Additional Capital Contributions and Issuances of Additional Partnership Interests	 	 	13	 
	4.3
	 	Additional Funding	 	 	15	 
	4.4
	 	Capital Accounts	 	 	15	 
	4.5
	 	Percentage Interests	 	 	16	 
	4.6
	 	No Interest On Contributions	 	 	16	 
	4.7
	 	Return Of Capital Contributions	 	 	16	 
	4.8
	 	No Third Party Beneficiary	 	 	16	 
	Article 5 PROFITS AND LOSSES; DISTRIBUTIONS	 	 	17	 
	5.1
	 	Allocation of Profit and Loss	 	 	17	 
	5.2
	 	Distribution of Cash	 	 	19	 
	5.3
	 	REIT Distribution Requirements	 	 	21	 
	5.4
	 	No Right to Distributions in Kind	 	 	21	 
	5.5
	 	Limitations on Return of Capital Contributions	 	 	21	 
	5.6
	 	Distributions Upon Liquidation	 	 	21	 
	5.7
	 	Substantial Economic Effect	 	 	21	 
	Article 6 RIGHTS, OBLIGATIONS AND POWERS OF THE GENERAL PARTNER	 	 	22	 
	6.1
	 	Management of the Partnership	 	 	22	 
	6.2
	 	Delegation of Authority	 	 	24	 
	6.3
	 	Indemnification and Exculpation of Indemnitees	 	 	24	 
	6.4
	 	Liability of the General Partner	 	 	26	 
	6.5
	 	Reimbursement of General Partner	 	 	27	 
	6.6
	 	Outside Activities	 	 	27	 
	6.7
	 	Employment or Retention of Affiliates	 	 	28	 
	6.8
	 	General Partner Participation	 	 	28	 
	6.9
	 	Title to Partnership Assets	 	 	28	 
	6.10
	 	Miscellaneous	 	 	29	 
	6.11
	 	No Duplication of Fees or Expenses	 	 	29	 
	Article 7 CHANGES IN GENERAL PARTNER	 	 	29	 
	7.1
	 	Transfer of the General Partner’s Partnership Interest	 	 	29	 
	7.2
	 	Admission of a Substitute or Additional General Partner	 	 	31	 
	7.3
	 	Effect of Bankruptcy, Withdrawal, Death or Dissolution of a General Partner	 	 	31	 
	7.4
	 	Removal of a General Partner	 	 	32	 
	Article 8 RIGHTS AND OBLIGATIONS OF THE LIMITED PARTNERS	 	 	33	 
	8.1
	 	Management of the Partnership	 	 	33	 






 









 






	 	 	 	 	 	 	 
	8.2
	 	Power of Attorney	 	 	33	 
	8.3
	 	Limitation on Liability of Limited Partners	 	 	33	 
	8.4
	 	Redemption Right	 	 	33	 
	8.5
	 	Redemption or Conversion of Special OP Units and Partnership Units owned by the Advisor or its Affiliates	 	 	36	 
	Article 9 TRANSFERS OF LIMITED PARTNERSHIP INTERESTS	 	 	38	 
	9.1
	 	Purchase for Investment	 	 	38	 
	9.2
	 	Restrictions on Transfer of Limited Partnership Interests	 	 	38	 
	9.3
	 	Admission of Substitute Limited Partner	 	 	40	 
	9.4
	 	Rights of Assignees of Partnership Interests	 	 	41	 
	9.5
	 	Effect of Bankruptcy, Death, Incompetence or Termination of a Limited Partner	 	 	41	 
	9.6
	 	Joint Ownership of Interests	 	 	41	 
	Article 10 BOOKS AND RECORDS; ACCOUNTING; TAX MATTERS	 	 	42	 
	10.1
	 	Books and Records	 	 	42	 
	10.2
	 	Custody of Partnership Funds; Bank Accounts	 	 	42	 
	10.3
	 	Fiscal and Taxable Year	 	 	42	 
	10.4
	 	Annual Tax Information and Report	 	 	42	 
	10.5
	 	Tax Matters Partner; Tax Elections; Special Basis Adjustments	 	 	42	 
	10.6
	 	Reports to Limited Partners	 	 	43	 
	10.7
	 	Safe Harbor Election	 	 	43	 
	Article 11 AMENDMENT OF AGREEMENT; MERGER	 	 	44	 
	Article 12 GENERAL PROVISIONS	 	 	44	 
	12.1
	 	Notices	 	 	44	 
	12.2
	 	Survival of Rights	 	 	44	 
	12.3
	 	Additional Documents	 	 	44	 
	12.4
	 	Severability	 	 	45	 
	12.5
	 	Entire Agreement	 	 	45	 
	12.6
	 	Pronouns and Plurals	 	 	45	 
	12.7
	 	Headings	 	 	45	 
	12.8
	 	Counterparts	 	 	45	 
	12.9
	 	Governing Law	 	 	45	 






EXHIBITS




EXHIBIT A — Partners, Capital Contributions and Percentage Interests




EXHIBIT B — Notice of Exercise of Redemption Right





 











 





LIMITED PARTNERSHIP AGREEMENT

OF

HINES GLOBAL REIT PROPERTIES LP




     This Limited Partnership Agreement (this “Agreement”) is entered into this ___day of
                    , 200_, between Hines Global REIT, Inc., as the General Partner, Hines Global REIT
Associates Limited Partnership, as a Limited Partner, and the Limited Partners set forth on
Exhibit A attached hereto. Capitalized terms used herein but not otherwise defined shall
have the meanings given them in Article 1.



AGREEMENT




     WHEREAS, the General Partner intends to qualify as a real estate investment trust under the
Internal Revenue Code of 1986, as amended;



     WHEREAS, Hines Global REIT Properties LP (the “Partnership”), was formed on January 7, 2009 as
a limited partnership under the laws of the State of Delaware, pursuant to a Certificate of Limited
Partnership filed with the Office of the Secretary of State of the State of Delaware on January 7,
2009;



     WHEREAS, the General Partner desires to conduct its current and future business through the
Partnership;



     WHEREAS, in furtherance of the foregoing, the General Partner desires to contribute certain
assets to the Partnership from time to time;



     WHEREAS, in exchange for the General Partner’s contribution of assets, the parties desire that
the Partnership issue Partnership Units to the General Partner in accordance with the terms of this
Agreement;



     WHEREAS, the Limited Partner has contributed and it and future Limited Partners may contribute
certain of their property to the Partnership in exchange for Partnership Units or the Special OP
Units in accordance with the terms of this Agreement;



     WHEREAS, in furtherance of the Partnership’s business, the Partnership will acquire Properties
and other assets from time to time by means of the contribution of such Properties or other assets
to the Partnership by the owners thereof in exchange for Partnership Units; and



     WHEREAS, the parties hereto wish to establish herein their respective rights and obligations
in connection with all of the foregoing and certain other matters;



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



 









 





ARTICLE 1

DEFINED TERMS




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



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



     “ADDITIONAL FUNDS” has the meaning set forth in Section 4.3 hereof.



     “ADDITIONAL SECURITIES” means any additional REIT Shares (other than REIT Shares issued in
connection with a redemption pursuant to Section 8.4 hereof or REIT Shares issued pursuant
to a distribution reinvestment plan of the General Partner) or rights, options, warrants or
convertible or exchangeable securities containing the right to subscribe for or purchase REIT
Shares, as set forth in Section 4.2(a)(ii).



     “ADMINISTRATIVE EXPENSES” means (i) all administrative and operating costs and expenses
incurred by the Partnership, (ii) those administrative costs and expenses of the General Partner,
including any salaries or other payments to directors, officers or employees of the General
Partner, and any accounting and legal expenses of the General Partner, which expenses, the Partners
have agreed, are expenses of the Partnership and not the General Partner, (iii) costs and expenses
relating to the formation and continuity of existence and operation of the General Partner and any
Subsidiaries thereof (which Subsidiaries shall, for purposes hereof, be included within the
definition of General Partner), including taxes, fees and assessments associated therewith, (iv)
costs and expenses relating to any Offering and registration of securities by the General Partner
and all statements, reports, fees and expenses incidental thereto, including, without limitation,
underwriting discounts and selling commissions applicable to any such Offering, and any costs and
expenses associated with any claims made by any holders of such securities or any underwriters or
placement agents thereof, (v) costs and expenses associated with any repurchase of any securities
by the General Partner, (vi) costs and expenses associated with the preparation and filing of any
periodic or other reports and communications by the General Partner under federal, state or local
laws or regulations, including filings with the Commission, (vii) costs and expenses associated
with compliance by the General Partner with laws, rules and regulations promulgated by any
regulatory body, including the Commission and any securities exchange, (viii) costs and expenses
associated with any 401(k) plan, incentive plan, bonus plan or other plan providing for
compensation for the employees of the General Partner, (ix) costs and expenses incurred by the
General Partner relating to any issuing or redemption of Partnership Interests and (x) all other
operating or administrative costs of the General Partner incurred in the ordinary course of its
business on behalf of or in connection with the Partnership; provided, however, that Administrative
Expenses shall not include any administrative costs and expenses incurred by the General Partner
that are attributable to Properties or partnership interests in a Subsidiary Partnership that are
owned by the General Partner directly.



     “ADVISOR” or “ADVISORS” has the meaning set forth in the Advisory Agreement.



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     “ADVISORY AGREEMENT” means the agreement between the General Partner, the Partnership and the
Advisor pursuant to which the Advisor will direct or perform the day-to-day business affairs of the
General Partner.



     “AFFILIATE” means, with respect to any Person, (i) any Person directly or indirectly owning,
controlling or holding, with the power to vote, ten percent or more of the outstanding voting
securities of such other Person; (ii) any Person ten percent or more of whose outstanding voting
securities are directly or indirectly owned, controlled or held, with the power to vote, by such
other Person; (iii) any Person directly or indirectly controlling, controlled by or under common
control with such other Person; (iv) any executive officer, director, trustee or general partner of
such other Person and (v) any legal entity for which such Person acts as an executive officer,
director, trustee or general partner.



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



     “AGREEMENT” has the meaning set forth in the preamble.



     “APPLICABLE PERCENTAGE” has the meaning set forth in Section 8.4(b) hereof.



     “ASSET” means any Property, Mortgage, other debt or other investment (other than investments
in bank accounts, money market funds or other current assets) owned by the General Partner,
directly or indirectly through one or more of its Affiliates.



     “BUSINESS DAY” means any day on which the New York Stock Exchange is open for trading.



     “CAPITAL ACCOUNT” has the meaning set forth in Section 4.4 hereof.



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



     “CARRYING VALUE” means, with respect to any asset of the Partnership, the asset’s adjusted net
basis for federal income tax purposes or, in the case of any asset contributed to the Partnership,
the fair market value of such asset at the time of contribution, reduced by any amounts
attributable to the inclusion of liabilities in basis pursuant to Section 752 of the Code, except
that the Carrying Values of all assets may, at the discretion of the General Partner, be adjusted
to equal their respective fair market values (as determined by the General Partner), in accordance
with the rules set forth in Regulations Section 1.704-1(b)(2)(iv)(f), as provided for in
Section 4.4. In the case of any asset of the Partnership that has a Carrying Value that
differs from its adjusted tax basis, the Carrying Value shall be adjusted by the amount of
depreciation, depletion and amortization calculated for purposes of the allocations of net profit
and net loss



3









 







pursuant to Article 5 hereof rather than the amount of depreciation, depletion and
amortization determined for federal income tax purposes.



     “CASH AMOUNT” means an amount of cash per Partnership Unit equal to the lesser of (i) the
Value of the REIT Shares Amount on the date of receipt by the General Partner of a Notice of
Redemption or (ii) the applicable Redemption Price determined by the General Partner.



     “CERTIFICATE” means any instrument or document that is required under the laws of the State of
Delaware, or any other jurisdiction in which the Partnership conducts business, to be signed and
sworn to by the Partners of the Partnership (either by themselves or pursuant to the
power-of-attorney granted to the General Partner in Section 8.2 hereof) and filed for
recording in the appropriate public offices within the State of Delaware or such other jurisdiction
to perfect or maintain the Partnership as a limited partnership, to effect the admission,
withdrawal, or substitution of any Partner of the Partnership, or to protect the limited liability
of the Limited Partners as limited partners under the laws of the State of Delaware or such other
jurisdiction.



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



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



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



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



4









 







had received the Notice of Redemption immediately prior to the record date for such dividend,
distribution, subdivision or combination.



     “DEFAULTING LIMITED PARTNER” has the meaning set forth in Section 5.2(c).



     “DIRECTOR” has the meaning set forth in the Charter.



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



     “EXCEPTED HOLDER LIMIT” has the meaning set forth in the Charter.



     “GENERAL PARTNER” means Hines Global REIT, Inc., a Maryland corporation, and any Person who
becomes a substitute or additional General Partner as provided herein, and any of their successors
as General Partner.



     “GENERAL PARTNER LOAN” has the meaning set forth in Section 5.2(c) hereof.



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



     “INDEMNITEE” means the General Partner, the Advisor or any of its Affiliates or any employee,
director or Affiliate of the General Partner or the Partnership.



     “INDEPENDENT DIRECTORS” has the meaning set forth in the Charter.



     “JOINT VENTURE” means those joint venture, co-investment, co-ownership or partnership
arrangements in which the General Partner or any of its subsidiaries is a co-venturer or general
partner established to acquire or hold Assets.



     “LIMITED PARTNER” means any Person named as a Limited Partner on Exhibit A attached
hereto (including without limitation the Special OP Unitholder), and any Person who becomes a
Substitute Limited Partner, in such Person’s capacity as a Limited Partner in the Partnership.



     “LIMITED PARTNERSHIP INTEREST” means the ownership interest of a Limited Partner in the
Partnership at any particular time, including the right of such Limited Partner to any and all
benefits to which such Limited Partner may be entitled as provided in this Agreement



5









 







and in the Act, together with the obligations of such Limited Partner to comply with all the
provisions of this Agreement and of such Act.



     “LISTING” means the listing of the REIT Shares on a national securities exchange or the
receipt by the holders of the REIT Shares of securities that are listed on a national securities
exchange. Upon such Listing, the REIT Shares shall be deemed “Listed.”



     “MORTGAGES” means, in connection with mortgage financing provided, invested in, participated
in or purchased, all of the notes, deeds of trust, security interests or other evidences of
indebtedness or obligations, which are secured or collateralized by Real Property owned by the
borrowers under such notes, deeds of trust, security interests or other evidences of indebtedness
or obligations.



     “NET SALES PROCEEDS” means, in the case of a transaction described in clause (i)(A) of
the definition of Sale, the proceeds of any such transaction less the amount of selling expenses
incurred by or on behalf of the General Partner or the Partnership, including all real estate
commissions, closing costs and legal fees and expenses. In the case of a transaction described in
clause (i)(B) of such definition, Net Sales Proceeds means the proceeds of any such
transaction less the amount of selling expenses incurred by or on behalf of the General Partner or
the Partnership, including any legal fees and expenses and other selling expenses incurred in
connection with such transaction. In the case of a transaction described in clause (i)(C)
of such definition, Net Sales Proceeds means the proceeds of any such transaction actually
distributed to the General Partner or the Partnership from the Joint Venture less the amount of any
selling expenses, including legal fees and expenses incurred by or on behalf of the General Partner
(other than those paid by the Joint Venture). In the case of a transaction or series of
transactions described in clause (i)(D) of the definition of Sale, Net Sales Proceeds means
the proceeds of any such transaction (including the aggregate of all payments under a Mortgage or
in satisfaction thereof other than regularly scheduled interest payments) less the amount of
selling expenses incurred by or on behalf of the General Partner or the Partnership, including all
commissions, closing costs and legal fees and expenses. In the case of a transaction described in
clause (i)(E) of such definition, Net Sales Proceeds means the proceeds of any such
transaction less the amount of selling expenses incurred by or on behalf of the General Partner or
the Partnership, including any legal fees and expenses and other selling expenses incurred in
connection with such transaction. In the case of a transaction described in clause (ii) of
the definition of Sale, Net Sales Proceeds means the proceeds of such transaction or series of
transactions less all amounts generated thereby which are reinvested in one or more Assets within
180 days thereafter and less the amount of any real estate commissions, closing costs, and legal
fees and expenses and other selling expenses incurred by or allocated to the General Partner or the
Partnership in connection with such transaction or series of transactions. Net Sales Proceeds
shall also include any amounts that the General Partner determines, in its discretion, to be
economically equivalent to proceeds of a Sale. Net Sales Proceeds shall not include any reserves
established by the General Partner in its sole discretion.



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



     “OFFER” has the meaning set forth in Section 7.1(c)(ii) hereof.



6









 





     “OFFERING” means the offer and sale of REIT Shares to the public.



     “OP UNITHOLDERS” means all holders of Partnership Interests other than the Special OP
Unitholder in its capacity as holder of the Special OP Unit.



     “ORIGINAL LIMITED PARTNER” means the Limited Partners designated as “Original Limited
Partners” on Exhibit A hereto.



     “OWNERSHIP LIMIT” has the meaning set forth in the Charter.



     “PARTNER” means any General Partner or Limited Partner.



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



     “PARTNERSHIP” has the meaning set forth in the recitals.



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



     “PARTNERSHIP LOAN” has the meaning set forth in Section 5.2(c) hereof.



     “PARTNERSHIP MINIMUM GAIN” has the meaning set forth in Regulations Section 1.704-2(d). In
accordance with Regulations Section 1.704-2(d), the amount of Partnership Minimum Gain is
determined by first computing, for each Partnership nonrecourse liability, any gain the Partnership
would realize if it disposed of the property subject to that liability for no consideration other
than full satisfaction of the liability, and then aggregating the separately computed gains. A
Partner’s share of Partnership Minimum Gain shall be determined in accordance with Regulations
Section 1.704-2(g)(1).



     “PARTNERSHIP RECORD DATE” means the record date established by the General Partner for the
distribution of cash pursuant to Section 5.2 hereof, which record date shall be the same as
the record date established by the General Partner for a distribution to its shareholders of some
or all of its portion of such distribution.



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



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



7









 





     “PERSON” means an individual, corporation, partnership, limited liability company, estate,
trust (including a trust qualified under Sections 401(a) or 501(c)(17) of the Code), a portion of a
trust permanently set aside for or to be used exclusively for the purposes described in Section
642(c) of the Code, association, private foundation within the meaning of Section 509(a) of the
Code, joint stock company or other entity and also includes a group as that term is used for
purposes of Section 13(d)(3) of the Securities Exchange Act of 1934, as amended from time to time,
and a group to which an Excepted Holder Limit applies.



     “PROPERTY” means, as the context requires, all or a portion of each Real Property acquired by
the General Partner, directly or indirectly through joint venture or co-ownership arrangements or
other partnership or investment entities.



     “REAL PROPERTY” means land, rights in land (including leasehold interests), and any buildings,
structures, improvements, furnishings, fixtures and equipment located on or used in connection with
land and rights or interests in land.



     “REDEMPTION” has the meaning set forth in Section 8.4(a).



     “REDEMPTION PRICE” means the Value of the REIT Shares Amount on the date of receipt by the
General Partner of a Notice of Redemption discounted by any applicable discount that would apply
had the Partnership Units first been converted to REIT Shares and then redeemed by the General
Partner pursuant to the General Partner’s existing redemption plan, if any (provided further, that
in determining any such discount, to the extent it is based on a holding period, such REIT Shares
will be deemed to have been held for the same period of time as the related underlying Partnership
Units had been held by the applicable holder).



     “REDEMPTION RIGHT” has the meaning set forth in Section 8.4(a) hereof.



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



     “REGULATORY ALLOCATIONS” has the meaning set forth in Section 5.1(h) hereof.



     “REIT” means a corporation, trust, association or other legal entity (other than a real estate
syndication) that qualifies as a real estate investment trust under Sections 856 through 860 of the
Code, and any successor or other provisions of the Code relating to real estate investment trusts
(including provisions as to the attribution of ownership of beneficial interests therein) and the
regulations promulgated thereunder.



     “REIT SHARE” means a common share of beneficial interest in the General Partner (or successor
entity, as the case may be).



     “REIT SHARES AMOUNT” means a number of REIT Shares equal to the product of the number of
Partnership Units offered for exchange by a Tendering Party, multiplied by the Conversion Factor as
adjusted to and including the Specified Redemption Date; provided that in the event the General
Partner issues to all holders of REIT Shares rights, options, warrants or



8









 







convertible or exchangeable securities entitling the shareholders to subscribe for or purchase
REIT Shares, or any other securities or property (collectively, the “rights”), and the rights have
not expired at the Specified Redemption Date, then the REIT Shares Amount shall also include the
rights issuable to a holder of the REIT Shares Amount of REIT Shares on the record date fixed for
purposes of determining the holders of REIT Shares entitled to rights.



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



     “RESTRICTION NOTICE” has the meaning set forth in Section 8.4(e) hereof.



     “SAFE HARBOR” means, the election described in the Safe Harbor Regulation, pursuant to which a
partnership and all of its partners may elect to treat the fair market value of a partnership
interest that is transferred in connection with the performance of services as being equal to the
liquidation value of that interest.



     “SAFE HARBOR ELECTION” means the election by a partnership and its partners to apply the Safe
Harbor, as described in the Safe Harbor Regulation and Internal Revenue Service Notice 2005-43 ,
issued on May 19, 2005.



     “SAFE HARBOR REGULATION” means Proposed Treasury Regulations Section 1.83-3(l) issued on May
19, 2005.



     “SALE” means (i) any transaction or series of transactions whereby: (A) the General Partner
or the Partnership directly or indirectly (except as described in other subsections of this
definition) sells, grants, transfers, conveys, or relinquishes its ownership of any Property or
portion thereof, including the lease of any Property consisting of a building only, and including
any event with respect to any Property which gives rise to a significant amount of insurance
proceeds or condemnation awards; (B) the General Partner or the Partnership directly or indirectly
(except as described in other subsections of this definition) sells, grants, transfers, conveys, or
relinquishes its ownership of all or substantially all of the interest of the General Partner or
the Partnership in any Joint Venture in which it is a co-venturer or partner; (C) any Joint Venture
directly or indirectly (except as described in other subsections of this definition) in which the
General Partner or the Partnership as a co-venturer or partner sells, grants, transfers, conveys,
or relinquishes its ownership of any Property or portion thereof, including any event with respect
to any Property which gives rise to insurance claims or condemnation awards; (D) the General
Partner or the Partnership directly or indirectly (except as described in other subsections of this
definition) sells, grants, conveys or relinquishes its interest in any Mortgage or portion thereof
(including with respect to any Mortgage, all payments thereunder or in satisfaction thereof other
than regularly scheduled interest payments) of amounts owed pursuant to such Mortgage and any event
which gives rise to a significant amount of insurance proceeds or similar awards; or (E) the
General Partner or the Partnership directly or indirectly (except as described in other subsections
of this definition) sells, grants, transfers, conveys, or relinquishes its ownership of any other
Asset not previously described in this definition or any portion thereof, but (ii) not including
any transaction or series of transactions specified in clause (i) (A)



9









 







through (E) above in which the proceeds of such transaction or series of transactions are
reinvested by the General Partner in one or more Assets within 180 days thereafter.



     “SECURITIES ACT” means the Securities Act of 1933, as amended from time to time, or any
successor statute thereto. Reference to any provision of the Securities Act shall mean such
provision as in effect from time to time, as the same may be amended, and any successor provision
thereto, as interpreted by any applicable regulations as in effect from time to time.



     “SERVICE” means the United States Internal Revenue Service.



     “SPECIAL OP UNITS” means units of a series of Partnership Interests, designated as Special OP
Units, issued pursuant to Section 4.1. The holder of the Special OP Units shall have the
same rights and preferences as a holder of a Partnership Unit under this Agreement that is a
Limited Partner except as otherwise set forth in this Agreement.



     “SPECIAL OP UNIT DISTRIBUTION” has the meaning set forth in Section 5.2(b) hereof.



     “SPECIAL OP UNITHOLDER” means Hines Global REIT Associates Limited Partnership.



     “SPECIAL OP UNIT VALUE” has the meaning set forth in Section 8.5(b)(i) hereof.



     “SPECIFIED REDEMPTION DATE” means the first business day of the month that is at least sixty
(60) Business Days after the receipt by the General Partner of the Notice of Redemption.



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



     “SUBSIDIARY PARTNERSHIP” means any partnership of which the partnership interests therein are
owned by the General Partner or a direct or indirect subsidiary of the General Partner.



     “SUBSTITUTE LIMITED PARTNER” means any Person admitted to the Partnership as a Limited Partner
pursuant to Section 9.3 hereof.



     “SUCCESSOR ENTITY” has the meaning set forth in the definition of “Conversion Factor”
contained herein.



     “SURVIVOR “ has the meaning set forth in Section 7.1(d) hereof.



     “TAX MATTERS PARTNER” has the meaning set forth in Section 10.5(a) hereof.



     “TENDERED UNITS” has the meaning set forth in Section 8.4(a) hereof.



     “TENDERING PARTY” has the meaning set forth in Section 8.4(a) hereof.



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     “TERMINATION EVENT” has the meaning set forth in Section 8.5(a).



     “TRANSACTION” has the meaning set forth in Section 7.1(c) hereof.



     “TRANSFER” has the meaning set forth in Section 9.2(a) hereof.



     “VALUE” means the fair market value per share of REIT Shares which will equal: (i) if REIT
Shares are Listed, the average closing price per share for the previous thirty Business Days, (ii)
if REIT Shares are not Listed, (a) the most recent offering price per share or share equivalent of
REIT Shares, until December 31st of the year following the year in which the most recently
completed offering of REIT Shares has expired, and (b) thereafter, such price per REIT Share as a
majority of the Directors of the General Partner determine in good faith.



     “VALUATION MECHANISMS” has the meaning set forth in Section 8.5(b)(i) hereof.



ARTICLE 2

PARTNERSHIP FORMATION AND IDENTIFICATION




     2.1 Formation. The Partnership was formed as a limited partnership pursuant to the Act and all other
pertinent laws of the State of Delaware, for the purposes and upon the terms and conditions set
forth in this Agreement.



     2.2 Name, Office and Registered Agent. The name of the Partnership is Hines Global REIT Properties LP, a Delaware limited
partnership. The specified office and place of business of the Partnership shall be 2800 Post Oak
Blvd., Suite 5000 Houston, TX 77056-6118. The General Partner may at any time change the location
of such office, provided the General Partner gives notice to the Partners of any such change. The
name and address of the Partnership’s registered agent is The Corporation Trust Company, 1209
Orange Street, Wilmington, Delaware 19801. The sole duty of the registered agent as such is to
forward to the Partnership any notice that is served on him as registered agent.



     2.3 Partners.



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



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



     2.4 Term and Dissolution.



          (a) The term of the Partnership shall continue in full force and effect until the first to
occur of any of the following events:



11









 





               (i) The occurrence of an Event of Bankruptcy as to a General Partner or the dissolution,
removal or withdrawal of a General Partner unless the business of the Partnership is continued
pursuant to Section 7.3(b) hereof;



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



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



          (b) Upon dissolution of the Partnership (unless the business of the Partnership is continued
pursuant to Section 7.3(b) hereof), the General Partner (or its trustee, receiver,
successor or legal representative) shall amend or cancel any Certificate(s) and liquidate the
Partnership’s assets and apply and distribute the proceeds thereof in accordance with Section
5.6 hereof. Notwithstanding the foregoing, the liquidating General Partner may either (i)
defer liquidation of, or withhold from distribution for a reasonable time, any assets of the
Partnership (including those necessary to satisfy the Partnership’s debts and obligations), or (ii)
distribute the assets to the Partners in kind.



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



     2.6 Certificates Describing Partnership Units and Special OP Units. At the request of a Limited Partner, the General Partner, at its option, may issue (but in
no way is obligated to issue) a certificate summarizing the terms of such Limited Partner’s
interest in the Partnership, including the number of Partnership Units (and, if applicable the
Special Op Units), as of the date of such certificate. Any such certificate (i) shall be in form
and substance as approved by the General Partner, (ii) shall not be negotiable and (iii) shall bear
a legend to the following effect:



     This certificate is not negotiable. The Partnership Units and Special OP Units represented by
this certificate are governed by and transferable only in accordance with the provisions of the
Limited Partnership Agreement of Hines Global REIT Properties LP, as amended from time to time.



ARTICLE 3

BUSINESS OF THE PARTNERSHIP




     The purpose and nature of the business to be conducted by the Partnership is (i) to conduct
any business that may be lawfully conducted by a limited partnership organized pursuant to the Act,
provided, however, that such business shall be limited to and conducted in



12









 







such a manner as to permit the General Partner at all times to qualify as a REIT, unless the
General Partner otherwise ceases to qualify as a REIT, and in a manner such that the General
Partner will not be subject to any taxes under Section 857 or 4981 of the Code, (ii) to enter into
any partnership, joint venture, co-ownership or other similar arrangement to engage in any of the
foregoing or the ownership of interests in any entity engaged in any of the foregoing and (iii) to
do anything necessary or incidental to the foregoing. In connection with the foregoing, and without
limiting the General Partner’s right in its sole and absolute discretion to qualify or cease
qualifying as a REIT, the Partners acknowledge that the General Partner intends to qualify as a
REIT for federal income tax purposes and upon such qualification the avoidance of income and excise
taxes on the General Partner inures to the benefit of all the Partners and not solely to the
General Partner. Notwithstanding the foregoing, the Limited Partners agree that the General
Partner may terminate its status as a REIT under the Code at any time to the full extent permitted
under the Charter. The General Partner on behalf of the Partnership shall also be empowered to do
any and all acts and things necessary or prudent to ensure that the Partnership will not be
classified as a “publicly traded partnership” for purposes of Section 7704 of the Code.



ARTICLE 4

CAPITAL CONTRIBUTIONS AND ACCOUNTS




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



     4.2 Additional Capital Contributions and Issuances of Additional Partnership Interests. Except as provided in this Section 4.2 or in Section 4.3, the Partners
shall have no right or obligation to make any additional Capital Contributions or loans to the
Partnership. The General Partner may contribute additional capital to the Partnership, from time
to time, and receive additional Partnership Interests in respect thereof, in the manner
contemplated in this Section 4.2.



          (a) Issuances of Additional Partnership Interests.



               (i) General. The General Partner is hereby authorized to cause the Partnership to
issue such additional Partnership Interests in the form of Partnership Units for any Partnership
purpose at any time or from time to time, including but not limited to Partnership Units issued in
connection with acquisitions of properties, to the Partners (including the General Partner) or to
other Persons for such consideration and on such terms and conditions as shall be established by
the General Partner in its sole and absolute discretion, all without the approval of any Limited
Partners. Any additional Partnership Interests issued thereby may be issued in one or more
classes, or one or more series of any of such classes, with such designations, preferences and
relative, participating, optional or other special rights, powers and duties, including rights,
powers and duties senior to Limited Partnership Interests, all as shall be determined by the
General Partner in its sole and absolute discretion and without the approval of any Limited
Partner, subject to Delaware law, including, without limitation, (i) the allocations of items of
Partnership income, gain, loss, deduction and credit to each such class or series of Partnership
Interests; (ii) the right of each such class or series of Partnership Interests to share in
Partnership distributions; and (iii) the rights of each such class or series of Partnership
Interests upon



13









 







dissolution and liquidation of the Partnership; provided, however, that no additional
Partnership Interests shall be issued to the General Partner unless:



                    (1) (A) the additional Partnership Interests are issued in connection with an issuance of REIT
Shares of or other interests in the General Partner, which shares or interests have designations,
preferences and other rights, all such that the economic interests are substantially similar to the
designations, preferences and other rights of the additional Partnership Interests issued to the
General Partner by the Partnership in accordance with this Section 4.2 and (B) the General
Partner shall make a Capital Contribution to the Partnership in an amount equal to the proceeds
raised in connection with the issuance of such shares of stock of or other interests in the General
Partner;



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



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



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



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



14









 







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



          (b) Certain Deemed Contributions of Proceeds of Issuance of REIT Shares. In
connection with any and all issuances of REIT Shares, the General Partner shall make Capital
Contributions to the Partnership of the proceeds therefrom, provided that if the proceeds actually
received and contributed by the General Partner are less than the gross proceeds of such issuance
as a result of any underwriter’s discount or other expenses paid or incurred in connection with
such issuance, then the General Partner shall be deemed to have made Capital Contributions to the
Partnership in the aggregate amount of the gross proceeds of such issuance and the Partnership
shall be deemed simultaneously to have paid such offering expenses in accordance with Section
6.5 hereof and in connection with the required issuance of additional Partnership Units to the
General Partner for such Capital Contributions pursuant to Section 4.2(a) hereof.



     4.3 Additional Funding. If the General Partner determines that it is in the best interests of the Partnership to
provide for additional Partnership funds (“Additional Funds”) for any Partnership purpose, the
General Partner may (i) cause the Partnership to obtain such funds from outside borrowings, or (ii)
elect to have the General Partner or any of its Affiliates provide such Additional Funds to the
Partnership through loans or otherwise, provided, however, that the Partnership may not borrow
money from its Affiliates, unless a majority of the Directors of the General Partner (including a
majority of Independent Directors) not otherwise interested in such transaction approve the
transaction as being fair, competitive, and commercially reasonable and no less favorable to the
Partnership than comparable loans between unaffiliated parties.



     4.4 Capital Accounts.



          (a) A separate capital account (each a “Capital Account”) shall be maintained for each Partner
in accordance with the rules of Treasury Regulations Section 1.704-1(b)(2)(iv), and this
Section 4.4 and Article 5 shall be interpreted and applied in a manner consistent
therewith. Whenever the Partnership would be permitted to adjust the Capital Accounts of the
Partners pursuant to Treasury Regulations Section 1.704-1(b)(2)(iv)(f) to reflect revaluations of
Partnership property, the Partnership may so adjust the Capital Accounts of the Partners. In the
event that the Capital Accounts of the Partners are adjusted pursuant to Treasury Regulations
Section 1.704-1(b)(2)(iv)(f) to reflect revaluations of Partnership property, (i) the Capital
Accounts of the Partners shall be adjusted in accordance with Treasury Regulations Section
1.704-1(b)(2)(iv)(g) for allocations of depreciation, depletion, amortization and gain or loss, as
computed for book purposes, with respect to such property, (ii) the Partners’ distributive shares
of depreciation, depletion, amortization and gain or loss, as computed for tax purposes, with
respect to such property shall be determined so as to take account of the variation between the
adjusted tax basis and book value of such property in the same manner as under Code Section 704(c),
and (iii) the amount of upward and/or downward adjustments to the book value of the Partnership
property shall be treated as income, gain, deduction and/or loss for purposes of applying the
allocation provisions of Article 5. In the event that Code Section 704(c) applies to



15









 







Partnership property, the Capital Accounts of the Partners shall be adjusted in accordance
with Treasury Regulations Section 1.704-1(b)(2)(iv)(g) for allocations of depreciation, depletion,
amortization and gain and loss, as computed for book purposes, with respect to such property.



          (b) Notwithstanding any provision herein to the contrary, any fees, expenses or other costs of
the Partnership that are required to be paid by the General Partner without reimbursement and that
are required to be treated as capital contributions to the Partnership for purposes of the Treasury
Regulations promulgated under Section 704(b) of the Code, shall be added to the balance of the
General Partner’s Capital Account.



     4.5 Percentage Interests. If the number of outstanding Partnership Units increases or decreases during a taxable
year, each Partner’s Percentage Interest shall be adjusted by the General Partner effective as of
the effective date of each such increase or decrease to a percentage equal to the number of
Partnership Units held by such Partner divided by the aggregate number of Partnership Units
outstanding after giving effect to such increase or decrease. If the Partners’ Percentage
Interests are adjusted pursuant to this Section 4.5, the net profits and net losses (and
items thereof) for the taxable year in which the adjustment occurs shall be allocated between the
part of the year ending on the day when the Partnership’s property is revalued by the General
Partner and the part of the year beginning on the following day either (i) as if the taxable year
had ended on the date of the adjustment or (ii) based on the number of days in each part. The
General Partner, in its sole and absolute discretion, shall determine which method shall be used to
allocate net profits and net losses (or items thereof) for the taxable year in which the adjustment
occurs. The allocation of net profits and net losses (or items thereof) for the earlier part of
the year shall be based on the Percentage Interests before adjustment, and the allocation of net
profits and net losses (or items thereof) for the later part shall be based on the adjusted
Percentage Interests.



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



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



     4.8 No Third Party Beneficiary. No creditor or other third party having dealings with the Partnership shall have the right
to enforce the right or obligation of any Partner to make Capital Contributions or loans or to
pursue any other right or remedy hereunder or at law or in equity, it being understood and agreed
that the provisions of this Agreement shall be solely for the benefit of, and may be enforced
solely by, the parties hereto and their respective successors and assigns. None of the rights or
obligations of the Partners herein set forth to make Capital Contributions or loans to the
Partnership shall be deemed an asset of the Partnership for any purpose by any creditor or other
third party, nor may such rights or obligations be sold, transferred or assigned by the Partnership
or pledged or encumbered by the Partnership to secure any debt or other obligation of the
Partnership or of any of the Partners. In addition, it is the intent of the parties hereto that no
distribution to any Limited Partner shall be deemed a return of



16









 







money or other property in violation of the Act. However, if any court of competent
jurisdiction holds that, notwithstanding the provisions of this Agreement, any Limited Partner is
obligated to return such money or property, such obligation shall be the obligation of such Limited
Partner and not of the General Partner. Without limiting the generality of the foregoing, a
deficit Capital Account of a Partner shall not be deemed to be a liability of such Partner nor an
asset or property of the Partnership.



ARTICLE 5

PROFITS AND LOSSES; DISTRIBUTIONS




     5.1 Allocation of Profit and Loss.



          (a) General.



               (i) Net income and net loss (or items thereof) of the Partnership for each fiscal year or
other applicable period of the Partnership shall be allocated among the OP Unitholders in
accordance with their respective Percentage Interests;



               (ii) Notwithstanding the foregoing, and subject only to the provisions of paragraph (b) and,
to the extent set forth in this clause (ii) below, paragraph (c), net income shall first be
allocated to the holder of the Special OP Units until such holder has received aggregate
allocations of income for all fiscal years equal to the aggregate amount of distributions such
holder is entitled to receive or have received with respect to such Special OP Units for such
fiscal year and all prior fiscal years, provided that in the event the holder of the Special OP
Unit’s entitlement to income allocations in such fiscal year would be satisfied pursuant to the
allocations set forth in paragraph (c) below, then such allocations shall be made pursuant to
paragraph (c) below in lieu of the provisions of this clause (ii).



          (b) General Partner Gross Income Allocation. There shall be specially allocated to
the General Partner an amount of (i) first, items of Partnership income and (ii) second, items of
Partnership gain during each fiscal year or other applicable period, before any other allocations
are made hereunder, in an amount equal to the excess, if any, of (A) the cumulative distributions
made to the General Partner under Section 6.5(b) hereof, other than distributions which
would properly be treated as “guaranteed payments” or which are attributable to the reimbursement
of expenses which would properly be deductible by the Partnership, over (B) the cumulative
allocations of Partnership income and gain to the General Partner under this Section
5.1(b).



          (c) Special Allocation with Respect to Sales. Items of income, gain, credit, loss and
deduction of the Partnership for each fiscal year or other applicable period from Sales, other than
any such items allocated under Section 5.1(b), shall be allocated among the Partners in a
manner that will, as nearly as possible (after giving effect to the allocations under
Sections 5.1(a) and 5.1(d)) cause the Capital Account balance of each
Partner at the end of such fiscal year or other applicable period to equal (i) the amount of the
hypothetical distribution that such Partner would receive if the Partnership were liquidated on the
last day of such period and all assets of the Partnership, including cash, were sold for cash equal
to their Carrying Value, taking into account any adjustments thereto for such period, all
liabilities of the Partnership were



17









 







satisfied in full in cash according to their terms (limited with respect to each nonrecourse
liability to the Carrying Value of the assets securing such liability) and Net Sales Proceeds
(after satisfaction of such liabilities) were distributed in full pursuant to Section
5.2(b), minus (ii) the sum of such Partner’s share of Partnership Minimum Gain and Partner
Nonrecourse Debt Minimum Gain and the amount, if any and without duplication, that the Partner
would be obligated to contribute to the capital of the Partnership, all computed as of the date of
the hypothetical sale of assets.



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



          (e) Qualified Income Offset. If a Partner unexpectedly receives in any taxable year
an adjustment, allocation, or distribution described in subparagraphs (4), (5), or (6) of
Regulations Section 1.704-1(b)(2)(ii)(d) that causes or increases a deficit balance in such
Partner’s Capital Account that exceeds the sum of such Partner’s shares of Partnership Minimum Gain
and Partner Nonrecourse Debt Minimum Gain, as determined in accordance with Regulations Sections
1.704-2(g)(1) and 1.704-2(i)(5), such Partner shall be allocated specially for such taxable year
(and, if necessary, later taxable years) items of income and gain in an amount and manner
sufficient to eliminate such deficit Capital Account balance as quickly as possible as provided in
Regulations Section 1.704-1(b)(2)(ii)(d). This Section 5.1(e) is intended to constitute a
“qualified income offset” under Section 1.704-1(b)(2)(ii)(d) of the Regulations and shall be
interpreted consistently therewith. After the occurrence of an allocation of income or gain to a
Partner in accordance with this Section 5.1(e), to the extent permitted by Regulations
Section 1.704-1(b), items of expense or loss shall be allocated to such Partner in an amount
necessary to offset the income or gain previously allocated to such Partner under this Section
5.1(e).



          (f) Capital Account Deficits. Loss (or items of loss) shall not be allocated to a
Limited Partner to the extent that such allocation would cause or increase a deficit in such
Partner’s Capital Account at the end of any fiscal year (after reduction to reflect the items



18









 







described in Regulations Section 1.704-1(b)(2)(ii)(d)(4), (5) and (6)) to exceed the sum of
such Partner’s shares of Partnership Minimum Gain and Partner Nonrecourse Debt Minimum Gain, as
determined in accordance with Regulations Sections 1.704-2(g)(1) and 1.704-2(i)(5). Any net loss
in excess of that limitation shall be allocated to the General Partner. After the occurrence of an
allocation of net loss to the General Partner in accordance with this Section 5.1(f), to
the extent permitted by Regulations Section 1.704-1(b), Profit shall be allocated to such Partner
in an amount necessary to offset the net loss previously allocated to such Partner under this
Section 5.1(f).



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



          (h) Curative Allocations. The allocations set forth in Sections 5.1(d),
5.1(e) and 5.1(f) of this Agreement (the “Regulatory Allocations”) are intended to
comply with certain requirements of the Regulations. The General Partner is authorized to offset
all Regulatory Allocations either with other Regulatory Allocations or with special allocations of
other items of Partnership income, gain, loss or deduction pursuant to this Section 5.1(h).
Therefore, notwithstanding any other provision of this Section 5.1 (other than the
Regulatory Allocations), the General Partner shall make such offsetting special allocations of
Partnership income, gain, loss or deduction in whatever manner it deems appropriate so that, after
such offsetting allocations are made, each Partner’s Capital Account is, to the extent possible,
equal to the Capital Account balance such Partner would have had if the Regulatory Allocations were
not part of this Agreement and all Partnership items were allocated pursuant to Sections
5.1(a), 5.1(b), 5.1(c)and 5.1(g).



     5.2 Distribution of Cash.



          (a) The Partnership may distribute cash on a quarterly (or, at the election of the General
Partner, more or less frequent) basis, in an amount determined by the General Partner in its sole
and absolute discretion, to the Partners who are Partners on the Partnership Record Date with
respect to such quarter (or other distribution period) in accordance with Section 5.2(b);
provided, however, that if a new or existing Partner acquires an additional Partnership Interest in
exchange for a Capital Contribution on any date other than a Partnership Record Date, the cash
distribution attributable to such additional Partnership Interest relating to the Partnership
Record Date next following the issuance of such additional Partnership Interest shall be reduced in
the proportion equal to one minus (i) the number of days that such additional Partnership Interest
is held by such Partner bears to (ii) the number of days between such Partnership Record Date and
the immediately preceding Partnership Record Date.




19










 





          (b) Except for distributions pursuant to Section 5.6 of this Agreement in connection
with the dissolution and liquidation of the Partnership and subject to the provisions of
Sections 5.2(c), 5.2(d), 5.3, 5.5 and 8.5 of this
Agreement, all distributions shall be made: (i) first, 100% to the OP Unitholders in accordance
with their respective Percentage Interests on the Partnership Record Date until the OP Unitholders
have received cumulative distributions under this Section 5.2(b) equal to the aggregate
Capital Contributions made by the OP Unitholders to the Partnership plus a cumulative,
noncompounded pre-tax rate of return thereon of 8.0% per annum, determined by taking into account
the dates on which all such Capital Contributions and distributions were made and (ii) second, (A)
85% to the OP Unitholders, in accordance with their respective Percentage Interests on the
Partnership Record Date and (B) 15% to the holder of the Special OP Units, provided however,
notwithstanding the foregoing, in the event that the Special OP Unitholder has received a
distribution under the circumstances described in Section 8.5(b)(iv) hereof (a “Special OP
Unit Distribution”) and there is a subsequent Termination Event, no further amount shall be
distributed to the Special OP Unitholder until the OP Unitholders, have collectively received
aggregate distributions equal to the sum of (x) the amount such OP Unitholders are entitled to
receive pursuant to this Section 5.2(b)(i) plus (y) an amount equal to 85% of (i) the
Special OP Unit Distribution divided by (ii) .15.



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



20









 





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



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



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



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



     5.5 Limitations on Return of Capital Contributions. Notwithstanding any of the provisions of this Article 5, no Partner shall have the
right to receive and the General Partner shall not have the right to make, a distribution that
includes a return of all or part of a Partner’s Capital Contributions, unless after giving effect
to the return of a Capital Contribution, the sum of all Partnership liabilities, other than the
liabilities to a Partner for the return of his Capital Contribution, does not exceed the fair
market value of the Partnership’s assets.



     5.6 Distributions Upon Liquidation. Upon liquidation of the Partnership, after payment of, or adequate provision for, debts and
obligations of the Partnership, including any Partner loans, any remaining assets of the
Partnership shall be distributed to all Partners in proportion to their respective positive Capital
Account balances, determined after taking into account all allocations required to be made pursuant
to Section 5.1 hereof and all prior distributions made pursuant to this Article 5,
in compliance with Treasury Regulation Section 1.704-1(b)(2)(ii)(b)(2). Notwithstanding any other
provision of this Agreement, the amount by which the value, as determined in good faith by the
General Partner, of any property other than cash to be distributed in kind to the Partners exceeds
or is less than the Carrying Value of such property shall, to the extent not otherwise recognized
by the Partnership, be taken into account in computing net profit and net loss of the Partnership
(or items thereof) for purposes of crediting or charging the Capital Accounts of, and distributing
proceeds to, the Partners, pursuant to this Agreement. To the extent deemed advisable by the
General Partner, appropriate arrangements (including the use of a liquidating trust) may be made to
assure that adequate funds are available to pay any contingent debts or obligations.



     5.7 Substantial Economic Effect. It is the intent of the Partners that the allocations of net profit and net loss (and items
thereof) under this Agreement have substantial economic effect (or be consistent with the Partners’
interests in the Partnership in the case of the allocation



21









 







of losses attributable to nonrecourse debt) within the meaning of Section 704(b) of the Code
as interpreted by the Regulations promulgated pursuant thereto. Article 5 and other
relevant provisions of this Agreement shall be interpreted in a manner consistent with such intent.



ARTICLE 6

RIGHTS, OBLIGATIONS AND

POWERS OF THE GENERAL PARTNER




     6.1 Management of the Partnership.



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



               (i) to acquire, purchase, own, operate, lease, dispose and exchange of any Assets, that the
General Partner determines are necessary or appropriate or in the best interests of the business of
the Partnership;



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



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



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



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



               (vi) to guarantee or become a co-maker of indebtedness of the General Partner or any
Subsidiary thereof, refinance, increase the amount of, modify, amend or change the terms of, or
extend the time for the payment of, any such guarantee or indebtedness, and secure such guarantee
or indebtedness by mortgage, deed of trust, pledge or other lien on the Partnership’s assets;



               (vii) to use assets of the Partnership (including, without limitation, cash on hand) for any
purpose consistent with this Agreement, including, without



22









 







limitation, payment, either directly or by reimbursement, of all operating costs and general
administrative expenses of the General Partner, the Partnership or any Subsidiary of either, to
third parties or to the General Partner as set forth in this Agreement;



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



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



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



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



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



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



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



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



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



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



23









 





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



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



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



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



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



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



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



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



     6.3 Indemnification and Exculpation of Indemnitees.



          (a) The Partnership shall indemnify an Indemnitee from and against any and all losses, claims,
damages, liabilities, joint or several, expenses (including reasonable legal fees and expenses),
judgments, fines, settlements, and other amounts arising from any and all claims, demands, actions,
suits or proceedings, civil, criminal, administrative or investigative, that relate to the
operations of the Partnership as set forth in this Agreement in which any



24









 







Indemnitee may be involved, or is threatened to be involved, as a party or otherwise, unless
it is established that: (i) the act or omission of the Indemnitee was material to the matter
giving rise to the proceeding and either was committed in bad faith or was the result of active and
deliberate dishonesty; (ii) the Indemnitee actually received an improper personal benefit in money,
property or services; or (iii) in the case of any criminal proceeding, the Indemnitee had
reasonable cause to believe that the act or omission was unlawful. Any indemnification pursuant to
this Section 6.3 shall be made only out of the assets of the Partnership.



          (b) The Partnership shall reimburse an Indemnitee for reasonable expenses incurred by an
Indemnitee who is a party to a proceeding in advance of the final disposition of the proceeding
upon receipt by the Partnership of (i) a written affirmation by the Indemnitee of the Indemnitee’s
good faith belief that the standard of conduct necessary for indemnification by the Partnership as
authorized in this Section 6.3 has been met, and (ii) a written undertaking by or on behalf
of the Indemnitee to repay the amount if it shall ultimately be determined that the standard of
conduct has not been met.



          (c) The indemnification provided by this Section 6.3 shall be in addition to any other
rights to which an Indemnitee or any other Person may be entitled under any agreement, pursuant to
any vote of the Partners, as a matter of law or otherwise, and shall continue as to an Indemnitee
who has ceased to serve in such capacity.



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



          (e) For purposes of this Section 6.3, the Partnership shall be deemed to have
requested an Indemnitee to serve as fiduciary of an employee benefit plan whenever the performance
by it of its duties to the Partnership also imposes duties on, or otherwise involves services by,
it to the plan or participants or beneficiaries of the plan; excise taxes assessed on an Indemnitee
with respect to an employee benefit plan pursuant to applicable law shall constitute fines within
the meaning of this Section 6.3; and actions taken or omitted by the Indemnitee with
respect to an employee benefit plan in the performance of its duties for a purpose reasonably
believed by it to be in the interest of the participants and beneficiaries of the plan shall be
deemed to be for a purpose which is not opposed to the best interests of the Partnership.



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



          (g) An Indemnitee shall not be denied indemnification in whole or in part under this
Section 6.3 because the Indemnitee had an interest in the transaction with respect to which
the indemnification applies if the transaction was otherwise permitted by the terms of this
Agreement.



25









 





          (h) The provisions of this Section 6.3 are for the benefit of the Indemnitees, their
heirs, successors, assigns and administrators and shall not be deemed to create any rights for the
benefit of any other Persons.



               (i) Notwithstanding the foregoing, the Partnership may not indemnify or hold harmless an
Indemnitee for any liability or loss unless all of the following conditions are met: (i) the
Indemnitee has determined, in good faith, that the course of conduct that caused the loss or
liability was in the best interests of the Partnership; (ii) the Indemnitee was acting on behalf of
or performing services for the Partnership; (iii) the liability or loss was not the result of (A)
negligence or misconduct, in the case that the Indemnitee is a director of the General Partner
(other than an Independent Director), the Advisor or an Affiliate of the Advisor or (B) gross
negligence or willful misconduct, in the case that the Indemnitee is an Independent Director; and
(iv) the indemnification or agreement to hold harmless is recoverable only out of net assets of the
Partnership. In addition, the Partnership shall not provide indemnification for any loss,
liability or expense arising from or out of an alleged violation of federal or state securities
laws by such party unless one or more of the following conditions are met: (i) there has been a
successful adjudication on the merits of each count involving alleged material securities law
violations as to the Indemnitee; (ii) such claims have been dismissed with prejudice on the merits
by a court of competent jurisdiction as to the Indemnitee; or (iii) a court of competent
jurisdiction approves a settlement of the claims against the Indemnitee and finds that
indemnification of the settlement and the related costs should be made, and the court considering
the request for indemnification has been advised of the position of the Securities and Exchange
Commission and of the published position of any state securities regulatory authority in which
Securities were offered or sold as to indemnification for violations of securities laws.



     6.4 Liability of the General Partner.



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



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



26









 







Partner shall not be liable for monetary damages for losses sustained, liabilities incurred,
or benefits not derived by Limited Partners in connection with such decisions, provided that the
General Partner has acted in good faith.



          (c) Subject to its obligations and duties as General Partner set forth in Section 6.1
hereof, the General Partner may exercise any of the powers granted to it under this Agreement and
perform any of the duties imposed upon it hereunder either directly or by or through its agents.
The General Partner shall not be responsible for any misconduct or negligence on the part of any
such agent appointed by it in good faith.



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



          (e) Any amendment, modification or repeal of this Section 6.4 or any provision hereof
shall be prospective only and shall not in any way affect the limitations on the General Partner’s
liability to the Partnership and the Limited Partners under this Section 6.4 as in effect
immediately prior to such amendment, modification or repeal with respect to matters occurring, in
whole or in part, prior to such amendment, modification or repeal, regardless of when claims
relating to such matters may arise or be asserted.



     6.5 Reimbursement of General Partner.



          (a) Except as provided in this Section 6.5 and elsewhere in this Agreement (including
the provisions of Article 5 and Article 6 regarding distributions, payments, and
allocations to which it may be entitled), the General Partner shall not be compensated for its
services as general partner of the Partnership.



          (b) The General Partner shall be reimbursed on a monthly basis, or such other basis as the
General Partner may determine in its sole and absolute discretion, for all Administrative Expenses
incurred by the General Partner.



     6.6 Outside Activities. Subject to (a) Section 6.8 hereof, (b) the Charter and (c) any agreements entered
into by the General Partner or its Affiliates with the Partnership, a Subsidiary or any officer,
director, employee, agent, trustee, Affiliate or shareholder of the General Partner, the General
Partner shall be entitled to and may have business interests and engage in business activities in
addition to those relating to the Partnership, including business interests and activities
substantially similar or identical to those of the Partnership. Neither the Partnership nor any of
the Limited Partners shall have any rights by virtue of this Agreement in any such business
ventures, interests or activities. None of the Limited Partners nor any other Person shall have
any rights by virtue of this Agreement or the partnership relationship established hereby in any
such business ventures, interests or activities, and the General Partner shall have no



27









 







obligation pursuant to this Agreement to offer any interest in any such business ventures,
interests and activities to the Partnership or any Limited Partner, even if such opportunity is of
a character which, if presented to the Partnership or any Limited Partner, could be taken by such
Person.



     6.7 Employment or Retention of Affiliates.



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



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



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



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



     6.8 General Partner Participation. The General Partner agrees that all business activities of the General Partner, including
activities pertaining to the acquisition, development or ownership of any Asset shall be conducted
through the Partnership or one or more Subsidiary Partnerships; provided, however, that the General
Partner is allowed to make a direct acquisition, but if and only if, such acquisition is made in
connection with the issuance of Additional Securities, which direct acquisition and issuance have
been approved and determined to be in the best interests of the General Partner and the Partnership
by a majority of the Independent Directors.



     6.9 Title to Partnership Assets. Title to Partnership assets, whether real, personal or mixed and whether tangible or
intangible, shall be deemed to be owned by the Partnership as an entity, and no Partner,
individually or collectively, shall have any ownership interest in such Partnership assets or any
portion thereof. Title to any or all of the Partnership assets may be held in the name of the
Partnership, the General Partner or one or more nominees, as the General Partner may determine,
including Affiliates of the General Partner. The General Partner hereby declares and warrants that
any Partnership assets for which legal title is held in the name of the General Partner or any
nominee or Affiliate of the General Partner shall be held by the General Partner for the use and
benefit of the Partnership or one or more Subsidiary Partnerships in



28









 







accordance with the provisions of this Agreement; provided, however, that the General Partner
shall use its commercially reasonable efforts to cause beneficial and record title to such assets
to be vested in the Partnership as soon as reasonably practicable. All Partnership assets shall be
recorded as the property of the Partnership in its books and records, irrespective of the name in
which legal title to such Partnership assets is held.



     6.10 Miscellaneous. In the event the General Partner redeems any REIT Shares (other than REIT Shares redeemed
in accordance with the share redemption program of the General Partner through proceeds received
from the General Partner’s dividend reinvestment plan), then the General Partner shall cause the
Partnership to purchase from the General Partner a number of Partnership Units as determined based
on the application of the Conversion Factor on the same terms that the General Partner redeemed
such REIT Shares. Moreover, if the General Partner makes a cash tender offer or other offer to
acquire REIT Shares, then the General Partner shall cause the Partnership to make a corresponding
offer to the General Partner to acquire an equal number of Partnership Units held by the General
Partner. In the event any REIT Shares are redeemed by the General Partner pursuant to such offer,
the Partnership shall redeem an equivalent number of the General Partner’s Partnership Units for an
equivalent purchase price based on the application of the Conversion Factor.



     6.11 No Duplication of Fees or Expenses. The Partnership may not incur or be responsible for any fee or expense (in connection with
the Offering or otherwise) that would be duplicative of fees and expenses paid by the General
Partner.



ARTICLE 7

CHANGES IN GENERAL PARTNER




     7.1 Transfer of the General Partner’s Partnership Interest.



          (a) The General Partner shall not transfer all or any portion of its General Partnership
Interest or withdraw as General Partner except as provided in, or in connection with a transaction
contemplated by, Sections 7.1(c), 7.1(d)or 7.1(e).



          (b) The General Partner agrees that its Percentage Interest will at all times be in the
aggregate, at least 0.1%.



          (c) Except as otherwise provided in Section 6.4(b) or Section 7.1(d) or
7.1(e) hereof, the General Partner shall not engage in any merger, consolidation or other
combination with or into another Person or sale of all or substantially all of its assets, (other
than in connection with a change in the General Partner’s state of incorporation or organizational
form) in each case which results in a change of control of the General Partner (a “Transaction”),
unless:



               (i) the consent of Limited Partners holding more than 50% of the Percentage Interests and the
consent of the Special OP Unitholder is obtained;



               (ii) as a result of such Transaction: (A) all Limited Partners will receive for each
Partnership Unit an amount of cash, securities, or other property equal to the product of the
Conversion Factor and the greatest amount of cash, securities or other property



29









 







paid in the Transaction to a holder of one REIT Share in consideration of one REIT Share,
provided that if, in connection with the Transaction, a purchase, tender or exchange offer
(“Offer”) shall have been made to and accepted by the holders of more than 50% of the outstanding
REIT Shares, each holder of Partnership Units shall be given the option to exchange its Partnership
Units for the greatest amount of cash, securities, or other property which a Limited Partner
holding Partnership Units would have received had it (1) exercised its Redemption Right and (2)
sold, tendered or exchanged pursuant to the Offer the REIT Shares received upon exercise of the
Redemption Right immediately prior to the expiration of the Offer and (B) the Special OP Unitholder
will receive for the Special OP Units an amount of cash, securities or other property (as
applicable based upon the type of consideration and the proportions thereof paid to holders of REIT
Shares in the Transaction) determined as set forth pursuant to Section 5.2(b) or
Section 8.5 hereof, as applicable; or



               (iii) the General Partner is the surviving entity in the Transaction and either (A) the
holders of REIT Shares do not receive cash, securities, or other property in the Transaction or (B)
all Limited Partners (other than the General Partner or any Subsidiary) receive (1) in exchange for
their Partnership Units, an amount of cash, securities, or other property (expressed as an amount
per REIT Share) that is no less than the product of the Conversion Factor and the greatest amount
of cash, securities, or other property (expressed as an amount per REIT Share) received in the
Transaction by any holder of REIT Shares and (2) the Special OP Unitholder receives in exchange for
the Special OP Units, an amount of cash, securities or other property (as applicable based upon the
type of consideration and the proportions thereof paid to holders of REIT Shares in the
Transaction) determined as set forth pursuant to Section 8.5(a) hereof.



          (d) Notwithstanding Section 7.1(c), the General Partner may merge with or into or
consolidate with another entity if immediately after such merger or consolidation (i)
substantially all of the assets of the successor or surviving entity (the “Survivor”), other than
Partnership Units held by the General Partner, are contributed, directly or indirectly, to the
Partnership as a Capital Contribution in exchange for Partnership Units with a fair market value
equal to the value of the assets so contributed as determined by the Survivor in good faith and
(ii) the Survivor expressly agrees to assume all obligations of the General Partner, as
appropriate, hereunder. Upon such contribution and assumption, the Survivor shall have the right
and duty to amend this Agreement as set forth in this Section 7.1(d). The Survivor shall in
good faith arrive at a new method for the calculation of the Cash Amount, the REIT Shares Amount
and Conversion Factor for a Partnership Unit after any such merger or consolidation so as to
approximate the existing method for such calculation as closely as reasonably possible. Such
calculation shall take into account, among other things, the kind and amount of securities, cash
and other property that was receivable upon such merger or consolidation by a holder of REIT Shares
or options, warrants or other rights relating thereto, and which a holder of Partnership Units
could have acquired had such Partnership Units been exchanged immediately prior to such merger or
consolidation. Such amendment to this Agreement shall provide for adjustment to such method of
calculation, which shall be as nearly equivalent as may be practicable to the adjustments provided
for with respect to the Conversion Factor. The Survivor also shall in good faith modify the
definition of REIT Shares and make such amendments to Sections 8.4 and 8.5 hereof
so as to approximate the existing rights and obligations set forth in Sections 8.4 and
8.5 as



30









 







closely as reasonably possible. The above provisions of this Section 7.1(d) shall
similarly apply to successive mergers or consolidations permitted hereunder.



          (e) Notwithstanding Section 7.1(c),



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



               (ii) the General Partner may engage in any transaction that is not required to be submitted to
the vote of the holders of the REIT Shares by (A) law or (B) the rules of any national securities
exchange on which the REIT Shares are Listed.



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



          (a) the Person to be admitted as a substitute or additional General Partner shall have
accepted and agreed to be bound by all the terms and provisions of this Agreement by executing a
counterpart thereof and such other documents or instruments as may be required or appropriate in
order to effect the admission of such Person as a General Partner, and a certificate evidencing the
admission of such Person as a General Partner shall have been filed for recordation and all other
actions required by Section 2.5 hereof in connection with such admission shall have been
performed;



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



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



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



          (a) Upon the occurrence of an Event of Bankruptcy as to a General Partner (and its removal
pursuant to Section 7.4(a) hereof) or the death, withdrawal, deemed removal or dissolution
of a General Partner (except that, if a General Partner is on the date of such occurrence a
partnership, the withdrawal, death, dissolution, Event of Bankruptcy as to, or removal of a partner
in, such partnership shall be deemed not to be a dissolution of such General Partner if the
business of such General Partner is continued by the remaining partner or partners),



31









 







the Partnership shall be dissolved and terminated unless the Partnership is continued pursuant
to Section 7.3(b) hereof. The merger of the General Partner with or into any entity that
is admitted as a substitute or successor General Partner pursuant to Section 7.2 hereof
shall not be deemed to be the withdrawal, dissolution or removal of the General Partner.



          (b) Following the occurrence of an Event of Bankruptcy as to a General Partner (and its
removal pursuant to Section 7.4(a) hereof) or the death, withdrawal, removal or dissolution
of a General Partner (except that, if a General Partner is, on the date of such occurrence, a
partnership, the withdrawal of, death, dissolution, Event of Bankruptcy as to, or removal of a
partner in, such partnership shall be deemed not to be a dissolution of such General Partner if the
business of such General Partner is continued by the remaining partner or partners), the Limited
Partners, within ninety (90) days after such occurrence, may elect to continue the business of the
Partnership for the balance of the term specified in Section 2.4 hereof by selecting,
subject to Section 7.2 hereof and any other provisions of this Agreement, a substitute
General Partner by consent of a majority in interest of the Limited Partners. If the Limited
Partners elect to continue the business of the Partnership and admit a substitute General Partner,
the relationship with the Partners and of any Person who has acquired an interest of a Partner in
the Partnership shall be governed by this Agreement.



     7.4 Removal of a General Partner.



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



          (b) If a General Partner has been removed pursuant to this Section 7.4 and the
Partnership is continued pursuant to Section 7.3 hereof, such General Partner shall
promptly transfer and assign its General Partnership Interest in the Partnership to the substitute
General Partner approved by a majority in interest of the Limited Partners in accordance with
Section 7.3(b) hereof and otherwise admitted to the Partnership in accordance with
Section 7.2 hereof. At the time of assignment, the removed General Partner shall be
entitled to receive from the substitute General Partner the fair market value of the General
Partnership Interest of such removed General Partner as reduced by any damages caused to the
Partnership by such General Partner. Such fair market value shall be determined by an appraiser
mutually agreed upon by the General Partner and a majority in interest of the Limited Partners
within ten (10) days following the removal of the General Partner. In the event that the parties
are unable to agree upon an appraiser, the removed General Partner and a majority in interest of
the Limited Partners each shall select an appraiser. Each such appraiser shall complete an
appraisal of the fair market value of the removed General Partner’s General Partnership Interest
within thirty (30) days of the General Partner’s removal, and the fair market value of the removed
General Partner’s General Partnership Interest shall be the average of the two appraisals;
provided, however, that if the higher appraisal exceeds the lower appraisal by more than 20% of the
amount of the lower appraisal, the two appraisers, no later than forty (40) days after the removal
of the General



32









 







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



          (c) The General Partnership Interest of a removed General Partner, until transfer under
Section 7.4(b), shall be converted to that of a special Limited Partner; provided, however,
such removed General Partner shall not have any rights to participate in the management and affairs
of the Partnership, and shall not be entitled to any portion of the income, expense, profit, gain
or loss allocations or cash distributions allocable or payable, as the case may be, to the Limited
Partners. Instead, such removed General Partner shall receive and be entitled only to retain
distributions or allocations of such items that it would have been entitled to receive in its
capacity as General Partner, until the transfer is effective pursuant to Section 7.4(b).



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



ARTICLE 8

RIGHTS AND OBLIGATIONS OF THE LIMITED PARTNERS




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



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



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



     8.4 Redemption Right.



          (a) Subject to Sections 8.4(b), 8.4(c), 8.4(d), 8.4(e),
8.4(f) and 8.5 hereof, the provisions of any agreements between the Partnership and
one or more Limited Partners with respect to Partnership Units held by them, each Limited Partner,
other than the General Partner, shall, after holding its
Partnership Units for at



33









 







least one
year (other than the Advisor and its Affiliates), have the right (subject to the terms and conditions set forth herein) to
require the Partnership to redeem (a “Redemption”) all or a portion of the Partnership Units (other
than Special OP Units), held by such Limited Partner (such Units, the “Tendered Units”), in
exchange (a “Redemption Right”), alternatively, for either REIT Shares or the Cash Amount, as
determined by the General Partner in its sole discretion. The consideration payable in respect of
Tendered Units shall be issued or paid, as the case may be, on the Specified Redemption Date. Any
Redemption Right shall be exercised pursuant to a Notice of Redemption delivered to the Partnership
(with a copy to the General Partner) by the Limited Partner exercising the Redemption Right (the
“Tendering Party”). A Limited Partner may not exercise the Redemption Right for less than 1,000
Partnership Units or, if such Limited Partner holds less than 1,000 Partnership Units, all of the
Partnership Units held by such Partner. The Tendering Party shall have no right, with respect to
any Partnership Units so redeemed, to receive any distribution paid with respect to Partnership
Units if the record date for such distribution is on or after the Specified Redemption Date.



          (b) If the General Partner elects to cause the Tendered Units to be exchanged for REIT Shares
rather than the Cash Amount, then the Partnership shall direct the General Partner to issue and
deliver such REIT Shares to the Tendering Party pursuant to the terms set forth in this Section
8.4(b), in which case, (i) the General Partner, acting as a distinct legal entity, shall assume
directly the Partnership’s redemption obligation with respect thereto and shall satisfy the
Tendering Party’s exercise of its Redemption Right, and (ii) such transaction shall be treated, for
federal income tax purposes, as a transfer by the Tendering Party of such Tendered Units to the
General Partner in exchange for REIT Shares. The percentage of the Tendered Units which are to be
so exchanged for REIT Shares (rather than the Cash Amount) is referred to as the “Applicable
Percentage.” In making such election to exchange Tendered Units for cash or REIT Shares, the
General Partner shall act in a fair, equitable and reasonable manner that neither prefers one group
or class of Limited Partners over another nor discriminates against a group or class of Limited
Partners. If the General Partner determines to redeem any Tendered Units for REIT Shares, rather
than the Cash Amount, on the Specified Redemption Date, the Tendering Party shall sell such number
of the Tendered Units to the General Partner in exchange for a number of REIT Shares equal to the
product of the REIT Shares Amount and the Applicable Percentage. Such amount of REIT Shares shall
be delivered by the General Partner as duly authorized, validly issued, fully paid and
nonassessable REIT Shares, free of any pledge, lien, encumbrance or restriction, other than the
Ownership Limit (as calculated in accordance with the Charter) and other restrictions provided in
the Articles of Incorporation, the bylaws of the General Partner, the Securities Act and relevant
state securities or “blue sky” laws. Notwithstanding the provisions of Section 8.4(a) and
this Section 8.4(b), the Tendering Parties shall have no rights under this Agreement that
would otherwise be prohibited under the Charter.



          (c) In connection with an exercise of Redemption Rights pursuant to this Section 8.4,
the Tendering Party shall submit the following to the General Partner, in addition to the Notice of
Redemption:



               (i) A written affidavit, dated the same date as the Notice of Redemption, (a) disclosing the
actual and constructive ownership, as determined for purposes of Code Sections 856(a)(6) and
856(h), of REIT Shares by (i) such Tendering Party and (ii) any Related Party and (b) representing
that, after giving effect to the Redemption, neither the



34









 







Tendering Party nor any Related Party will own REIT Shares in excess of the Ownership Limit
(or, if applicable the Excepted Holder Limit);



               (ii) A written representation that neither the Tendering Party nor any Related Party has any
intention to acquire any additional REIT Shares prior to the closing of the Redemption on the
Specified Redemption Date; and



               (iii) An undertaking to certify, at and as a condition to the closing of the Redemption on the
Specified Redemption Date, that either (a) the actual and constructive ownership of REIT Shares by
the Tendering Party and any Related Party remain unchanged from that disclosed in the affidavit
required by Section 8.4(c)(i) or (b) after giving effect to the Redemption, neither the
Tendering Party nor any Related Party shall own REIT Shares in violation of the Ownership Limit
(or, if applicable, the Excepted Holder Limit).



               (iv) Any other documents as the General Partner may reasonably require in connection with the
issuance of REIT Shares upon the exercise of the Redemption Right.



          (d) Any Cash Amount to be paid to a Tendering Party pursuant to this Section 8.4 shall
be paid on the Specified Redemption Date; provided, however, that the General Partner may elect to
cause the Specified Redemption Date to be delayed for up to an additional 180 days to the extent
required for the General Partner to provide financing to be used to make such payment of the Cash
Amount, by causing the issuance of additional REIT Shares or otherwise. Notwithstanding the
foregoing, the General Partner agrees to use its commercially reasonable efforts to cause the
closing of the acquisition of Tendered Units hereunder to occur as quickly as reasonably possible.



          (e) Notwithstanding any other provision of this Agreement, the General Partner shall place
appropriate restrictions on the ability of the Limited Partners to exercise their Redemption Rights
to prevent, among other things, (i) any person from owning shares in excess of the Ownership Limit
and the Excepted Holder Limit, (ii) the General Partner’s common stock from being owned by less
than 100 persons, (iii) the General Partner from being “closely held” within the meaning of
section 856(h) of the Code, (iv) violations or what would be likely to constitute a violation of
any applicable federal or state securities law, (v) violations of any provision of the General
Partner’s Charter or Bylaws and (vi) as and if deemed necessary to ensure that the Partnership does
not constitute a “publicly traded partnership” under section 7704 of the Code. If and when the
General Partner determines that imposing such restrictions is necessary, the General Partner shall
give prompt written notice thereof (a “Restriction Notice”) to each of the Limited Partners holding
Partnership Units, which notice shall be accompanied by a copy of an opinion of counsel to the
Partnership which states that, in the opinion of such counsel, restrictions are necessary in order
to avoid having the Partnership be treated as a “publicly traded partnership” under section 7704 of
the Code.



          (f) A redemption fee may be charged in connection with an exercise of Redemption Rights
pursuant to this Section 8.4.



35









 




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



               (a) Termination Events. In connection with: (i) a Listing, (ii) a merger, consolidation or
sale of substantially all of the Partnership’s assets or any similar transaction, (iii) any
transaction pursuant to which a majority of the Directors then in office are replaced or removed
which is not otherwise described in (ii) above, or (iv) the termination or nonrenewal of the
Advisory Agreement for any reason other than by the Advisor and other than in connection with (i),
(ii) or (iii) above (the events described in (i) through (iv) are hereinafter referred to
individually as a “Termination Event” and collectively as the “Termination Events”), then at the
election of the Special OP Unitholder, and as further provided in Section 8.5(b) below,
such holder may (1) exchange its Special OP Units for Partnership Units, (2) exchange its Special
OP Units for Partnership Units and immediately thereafter redeem its Partnership Units received in
such exchange pursuant to Section 8.5(b) hereof, or (3) retain its Special OP Units.



          (b) Special OP Unit Exchange; Redemption of Partnership Units of the Special OP Unitholder,
the Advisor or its Affiliates; Entitlement to Distributions



               (i) If the Special OP Unitholder elects to exchange its Special OP Units for Partnership
Units in connection with a Termination Event, then the Special OP Units shall be exchanged for a
number of Partnership Units (the “Special OP Unit Value”) equal in value to the aggregate amount of
distributions that would have been made with respect to the Special OP Units under Section
5.2(b)(ii) if all assets of the Partnership were sold for their fair market value, as
determined in good faith by the General Partner and in the manner set forth below, all liabilities
of the Partnership were satisfied in full in cash according to their terms, and Net Sales Proceeds
(after satisfaction of such liabilities) were distributed in full pursuant to Section
5.2(b). The Special OP Unit Value shall be determined (1) in connection with a Termination
Event described in Section 8.5(a)(i) above, by reference to the market value of the REIT
Shares based upon the average closing sale price, or average of bid and asked prices (if closing
prices are not available) during a period of thirty (30) days during which such shares are traded
beginning 90 days after the Listing; (2) in connection with a Termination Event described in
Section 8.5(a)(ii) above, by reference to the value of
the consideration received or to be received by the holders of REIT Shares and
the implied value of the assets and liabilities of the General
Partner and the Partnership as a result thereof, or (3) in connection with a
Termination Event described in Sections 8.5(a)(iii) or 8.5(a)(iv) above, by
reference to the fair market value of the assets and liabilities of
the General Partnership and the Partnership as determined by an independent
third party mutually agreed to by the Partnership on the one hand and the holder of the applicable
Special OP Units on the other. The valuation mechanisms referred to in the immediately preceding
clauses (1) through (3) are hereinafter referred to as the “Valuation Mechanisms”. If multiple
Termination Events are triggered in connection with a series of related events, the Special OP
Unitholder, in its sole discretion, may determine which Valuation Mechanism should be used to value
the Partnership Units and determine the Special OP Unit Value. In the case of any Termination
Event other than a Listing, the exchange of the Special OP Units for Partnership Units shall occur
simultaneously with the occurrence or consummation of such Termination Event or as soon as is
reasonably practicable thereafter, and in the case of a Listing, the exchange of the Special OP
Units for Partnership Units shall occur within 125 days after the Listing shall have occurred.



36









 





               (ii) If the Special OP Unitholder elects to receive Partnership Units in exchange for its
Special OP Units in connection with the Termination Event but not to have such Partnership Units
redeemed, then such Partnership Units shall thereafter be subject to all of the applicable
provisions of this Agreement, including Section 8.5(d) hereof. If the Special OP
Unitholder elects to immediately redeem its Partnership Units, then the Special OP Unitholder shall
receive, at its option, upon redemption of such Partnership Units, cash or REIT Shares with an
aggregate value equal to the Special OP Unit Value as determined under subsection (i) of this
Section 8.5(b). Notwithstanding anything to the contrary above, in the case of any
Termination Event described in Sections 8.5(a)(i), (iii) or (iv) hereof, if the Special OP
Unitholder elects to receive cash and the Directors determine that such cash payment will impair
the capital of the General Partner or the Partnership, then such payment shall consist of a
promissory note issued by the Partnership, in a form reasonably acceptable to the General Partner
and the Special OP Unitholder, bearing interest at a competitive rate that will be repaid pursuant
to the terms thereof (but in any event, not more than five years after the date of issuance), and
requiring that the entire net proceeds of each Sale of an Asset or Assets of the Partnership in
connection with or following the occurrence of such Termination Event shall be used to repay such
promissory note.



               (iii) Notwithstanding anything to the contrary contained in Section 8.4 hereof, if the
Advisor and any of its Affiliates hold Partnership Units that were not received in connection with
a Termination Event, such holder or holders may elect to have such Partnership Units valued in the
manner set forth in Section 8.5(b)(i) and, using the applicable Valuation Mechanism,
redeemed for the resulting amount of consideration. Such holder may elect to have such
consideration paid in cash or REIT Shares. Such consideration shall be payable at the same time
that any consideration that would be payable upon a redemption described in subparagraph (i) of
this Section 8.5(b) would be due.



               (iv) In connection with a Termination Event, the Special OP Unitholder may elect not to have
the Special OP Units exchanged for Partnership Units. In such event, the Special OP Unitholder
shall receive a cash distribution equal to the aggregate amount that the Special OP Unitholder
would have been entitled to receive under subparagraph (ii) of this Section 8.5(b) above if
the Special OP Unitholder had elected to exchange the Special OP Units into Partnership Units which
were thereafter immediately redeemed; provided, however that the Special OP Units shall not, under
such circumstances, be exchanged for Partnership Units and shall instead remain outstanding and
subject to all of the applicable provisions of this Agreement.



               (v) If REIT Shares are to be issued in connection with the redemption of Partnership Units
pursuant to this Section 8.5(b), then the General Partner shall issue such REIT Shares in
accordance herewith and the exchange of Partnership Units shall be treated in accordance with
Section 8.4(b) as if the Partnership Units were Tendered Units. All cash payments required
to made pursuant to this Section 8.5 shall be made by wire transfer of immediately
available funds to an account designated by the recipient of such payment.



          (c) Limitation on Exchange and Redemption. Notwithstanding anything herein to the contrary,
no exchange or redemption pursuant to Section 8.5(b) shall be permitted unless and until
OP Unitholders have received (or are deemed to have received



37









 







pursuant to the deemed valuations set forth in such sections) aggregate, cumulative
distributions from the Partnership to OP Unitholders for all years from operating income, sales
proceeds and other sources in an amount equal to (i) the sum of the aggregate capital contributions
to the Partnership by the OP Unitholders for all years plus (ii) an 8.0% cumulative non-compounded
annual pre-tax return on the amount described in the immediately preceding subclause (i).



          (d) Redemption of Partnership Units Following a Termination Event. If the Advisor or any of
its Affiliates retains any of their Partnership Units following a Termination Event, the Advisor
and its Affiliates shall have the right to redeem such Partnership Units pursuant to all of the
terms and conditions of Section 8.4 hereof; provided, however, that the holder of such
Partnership Units and not the General Partner shall be entitled to elect cash or REIT Shares.



ARTICLE 9

TRANSFERS OF LIMITED PARTNERSHIP INTERESTS




     9.1 Purchase for Investment.



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



          (b) Each Limited Partner agrees that he will not sell, assign or otherwise transfer his
Partnership Interest or any fraction thereof, whether voluntarily or by operation of law or at
judicial sale or otherwise, to any Person who does not make the representations and warranties to
the General Partner set forth in Section 9.1(a) above and similarly agree not to sell,
assign or transfer such Partnership Interest or fraction thereof to any Person who does not
similarly represent, warrant and agree.



     9.2 Restrictions on Transfer of Limited Partnership Interests.



          (a) Subject to the provisions of Section 9.2(b) and 9.2(c), no Limited Partner
may offer, sell, assign, hypothecate, pledge or otherwise transfer all or any portion of his
Limited Partnership Interest, or any of such Limited Partner’s economic rights as a Limited
Partner, whether voluntarily or by operation of law or at judicial sale or otherwise (collectively,
a “Transfer”) without the prior consent of the General Partner, which consent may be granted or
withheld in its sole and absolute discretion. Any such purported transfer undertaken without such
consent shall be considered to be null and void ab initio and shall not be given effect. The
General Partner may require, as a condition of any Transfer to which it consents, that the
transferor assume all costs incurred by the Partnership in connection therewith.



          (b) No Limited Partner may withdraw from the Partnership other than: (i) as a result of a
permitted Transfer (i.e., a Transfer consented to as contemplated by clause (a) above or clause (c)
below or a Transfer pursuant to Section 9.5 below) of all of its Partnership Interest
pursuant to this Article 9, (ii) pursuant to a redemption of all of its Partnership Units
pursuant to Section 8.4 or (iii) pursuant to the redemption of the Limited Partner’s
Special OP Units and Partnership Units pursuant to Section 8.5. Upon the permitted
Transfer or redemption



38









 







of all of a Limited Partner’s Partnership Units and Special OP Units, if any, such Limited
Partner shall cease to be a Limited Partner.



          (c) Notwithstanding Section 9.2(a) and subject to Sections 9.2(d),
9.2(e) and 9.2(f) below, a Limited Partner may not Transfer, without the prior
consent of the General Partner, which consent will not be unreasonably withheld, all or a portion
of its Partnership Interest to (i) a parent or parent’s spouse, natural or adopted descendant or
descendants, spouse of such descendant, or brother or sister, or a trust created by such Limited
Partner for the benefit of such Limited Partner and/or any such person(s), of which trust such
Limited Partner or any such person(s) is a trustee, (ii) a corporation controlled by a Person or
Persons named in (i) above, or (iii) if the Limited Partner is an entity, its beneficial owners.



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



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



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



          (g) Any Transfer in contravention of any of the provisions of this Article 9 shall be
void and ineffectual and shall not be binding upon, or recognized by, the Partnership.



          (h) Prior to the consummation of any Transfer under this Article 9, the transferor
and/or the transferee shall deliver to the General Partner such opinions, certificates and other
documents as the General Partner shall request in connection with such Transfer.



39









 





     9.3 Admission of Substitute Limited Partner.



          (a) Subject to the other provisions of this Article 9, an assignee of the Limited
Partnership Interest of a Limited Partner (which shall be understood to include any purchaser,
transferee, donee, or other recipient of any disposition of such Limited Partnership Interest)
shall be deemed admitted as a Limited Partner of the Partnership only with the consent of the
General Partner, which consent may be granted or withheld in its sole and absolute discretion, and
upon the satisfactory completion of the following:



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



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



               (iii) The assignee shall have delivered a letter containing the representation set forth in
Section 9.1(a) hereof and the agreement set forth in Section 9.1(b) hereof.



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



               (v) The assignee shall have executed a power of attorney containing the terms and provisions
set forth in Section 8.2 hereof.



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



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



          (b) For the purpose of allocating profits and losses and distributing cash received by the
Partnership, a Substitute Limited Partner shall be treated as having become, and appearing in the
records of the Partnership as, a Partner upon the filing of the Certificate described in
Section 9.3(a)(ii) hereof or, if no such filing is required, the later of the date
specified in the transfer documents or the date on which the General Partner has received all
necessary instruments of transfer and substitution.



          (c) The General Partner shall cooperate with the Person seeking to become a Substitute Limited
Partner by preparing the documentation required by this Section and making all official filings and
publications. The Partnership shall take all such action as



40









 







promptly as practicable after the satisfaction of the conditions in this Article 9 to
the admission of such Person as a Limited Partner of the Partnership.



     9.4 Rights of Assignees of Partnership Interests.



          (a) Subject to the provisions of Sections 9.1 and 9.2 hereof, except as
required by operation of law, the Partnership shall not be obligated for any purposes whatsoever to
recognize the assignment by any Limited Partner of its Partnership Interest until the Partnership
has received notice thereof.



          (b) Any Person who is the assignee of all or any portion of a Limited Partner’s Limited
Partnership Interest, but does not become a Substitute Limited Partner and desires to make a
further assignment of such Limited Partnership Interest, shall be subject to all the provisions of
this Article 9 to the same extent and in the same manner as any Limited Partner desiring to
make an assignment of its Limited Partnership Interest.



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



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



41









 





ARTICLE 10

BOOKS AND RECORDS; ACCOUNTING; TAX MATTERS




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



     10.2 Custody of Partnership Funds; Bank Accounts.



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



          (b) All deposits and other funds not needed in the operation of the business of the
Partnership may be invested by the General Partner in investment grade instruments (or investment
companies whose portfolio consists primarily thereof), government obligations, certificates of
deposit, bankers’ acceptances and municipal notes and bonds. The funds of the Partnership shall not
be commingled with the funds of any other Person except for such commingling as may necessarily
result from an investment in those investment companies permitted by this Section 10.2(b).



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



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



     10.5 Tax Matters Partner; Tax Elections; Special Basis Adjustments.



          (a) The General Partner shall be the Tax Matters Partner of the Partnership within the meaning
of Section 6231(a)(7) of the Code. As Tax Matters Partner, the General Partner shall have the
right and obligation to take all actions authorized and required, respectively, by the Code for the
Tax Matters Partner. The General Partner shall have the right to retain professional assistance in
respect of any audit of the Partnership by the Service and all out-of-pocket expenses and fees
incurred by the General Partner on behalf of the Partnership as Tax Matters Partner shall
constitute Partnership expenses. In the event the General Partner receives notice of a final
Partnership adjustment under Section 6223(a)(2) of the Code, the General Partner shall either (i)
file a court petition for judicial review of such final adjustment



42









 







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



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



          (c) In the event of a transfer of all or any part of the Partnership Interest of any Partner,
the Partnership, at the option of the General Partner, may elect pursuant to Section 754 of the
Code to adjust the basis of the Partnership’s assets. Notwithstanding anything contained in
Article 5 of this Agreement, any adjustments made pursuant to Section 754 of the Code shall
affect only the successor in interest to the transferring Partner and in no event shall be taken
into account in establishing, maintaining or computing Capital Accounts for the other Partners for
any purpose under this Agreement. Each Partner will furnish the Partnership with all information
necessary to give effect to such election.



     10.6 Reports to Limited Partners.



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



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



     10.7 Safe Harbor Election. The Partners agree that, in the event the Safe Harbor Regulation is finalized, the
Partnership shall be authorized and directed to make the Safe Harbor Election and the Partnership
and each Partner (including any person to whom an interest in the Partnership is transferred in
connection with the performance of services) agrees to comply with all requirements of the Safe
Harbor with respect to all interests in the Partnership transferred in connection with the
performance of services while the Safe Harbor Election remains effective. The Tax Matters Partner
shall be authorized to (and shall) prepare, execute, and file the Safe Harbor Election.



43









 





ARTICLE 11

AMENDMENT OF AGREEMENT; MERGER




     The General Partner’s consent shall be required for any amendment to this Agreement. The
General Partner, without the consent of the Limited Partners, may amend this Agreement in any
respect or merge or consolidate the Partnership with or into any other partnership or business
entity (as defined in Section 17-211 of the Act) in a transaction pursuant to Section
7.1(c)(ii) or 7.1(c)(iii), 7.1(d) or 7.1(e) hereof; provided, however,
that the following amendments and any other merger or consolidation of the Partnership shall
require the consent of Limited Partners holding more than 67% of the Percentage Interests of the
Limited Partners and the Special OP Unitholder:



          (a) any amendment affecting the operation of the Conversion Factor or the Redemption Right
(except as provided in Section 7.4(d) or 7.1(d) hereof) in a manner adverse to the
Limited Partners;



          (b) any amendment that would adversely affect the rights of the Limited Partners to receive
the distributions payable to them hereunder, other than with respect to the issuance of additional
Partnership Units pursuant to Section 4.2 hereof; or



          (c) any amendment that would alter the Partnership’s allocations of profit and loss to the
Limited Partners, other than with respect to the issuance of additional Partnership Units pursuant
to Section 4.2 hereof; and any amendment that would impose on any Limited Partner any
obligation to make additional Capital Contributions to the Partnership or otherwise alter such
Limited Partner’s right to receive distributions of cash or other property or allocations of items
of income, gain, deduction loss or credit shall require the written consent of both the General
Partner and any such Limited Partner. In addition, any amendment to Section 8.5 shall
require the consent of the Special OP Unitholder, and any amendment to this Article 11
shall require the written consent of all Partners.



ARTICLE 12

GENERAL PROVISIONS




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



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



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



44









 





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



     12.5 Entire Agreement. This Agreement and exhibits attached hereto constitute the entire Agreement of the Partners
and supersede all prior written agreements and prior and contemporaneous oral agreements,
understandings and negotiations with respect to the subject matter hereof.



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



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



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



     12.9 Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the State
of Delaware; provided, however, that any cause of action for violation of federal or state
securities laws shall not be governed by this Section 12.9.



45









 





     IN WITNESS WHEREOF, the parties hereto have hereunder affixed their signatures to this
Agreement of Limited Partnership, all as of the ___day of                     , 200_.



	 	 	 	 	 
	 	GENERAL PARTNER:


HINES GLOBAL REIT, INC., a Maryland corporation

 	 
	 	By:  	 	 
	 	 	Name:  	  	 
	 	 	Title:  	  	 



 









 






	 	 	 	 	 



	 	 	 	 	 	 	 
	 	 	LIMITED PARTNERS:


HINES GLOBAL REIT ASSOCIATES LIMITED PARTNERSHIP
	 
	 	 	 	 	 	 
	 

	 	By:
	 	
 

	 	, its General Partner
	 

	 	Name:
	 	
 
	 	 
	 

	 	Title:
	 	
 
	 	 






 









 






EXHIBIT A




PARTNERS, CAPITAL CONTRIBUTIONS AND PERCENTAGE INTERESTS




General Partner and Limited Partners (other than the Special OP Unitholder)




	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	Agreed Value of	 	 	 	 
	 	 	Cash	 	Capital	 	Partnership	 	Percentage
	Partner	 	Contribution	 	Contribution	 	Units	 	Interest
	GENERAL PARTNER:
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Hines Global REIT , Inc.
[Address]
	 	$	10,000	 	 	 	[     ]	 	 	 	[     ]	 	 	 	5.0	%
	ORIGINAL LIMITED
PARTNERS:
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Hines Global REIT
Associates Limited
Partnership
[Address]
	 	$	190,000	 	 	 	[     ]	 	 	 	21,111	 	 	 	95.0	%
	Totals
	 	$	200,000	 	 	 	[     ]	 	 	 	[     ]	 	 	 	100	%






Special OP Unitholder




Hines Global REIT Associates Limited Partnership

[Address]



 









 





EXHIBIT B

NOTICE OF EXERCISE OF REDEMPTION RIGHT




     In accordance with Section 8.4 of the Limited Partnership Agreement (the “Agreement”)
of Hines Global REIT Properties LP, the undersigned hereby irrevocably (i) presents for redemption
                     Partnership Units in Hines Global REIT Properties LP in accordance with the terms of the
Agreement and the Redemption Right referred to in Section 8.4 thereof, (ii) surrenders such
Partnership Units and all right, title and interest therein, and (iii) directs that the Cash Amount
or REIT Shares Amount (as defined in the Agreement) as determined by the General Partner
deliverable upon exercise of the Redemption Right be delivered to the address specified below, and
if REIT Shares (as defined in the Agreement) are to be delivered, such REIT Shares be registered or
placed in the name(s) and at the address(es) specified below.



	 	 	 	 	 	 	 
	Dated:                     __, _____	 	
 

(Name of Limited Partner)
	 
	 	 	 	 	 	 
	 

	 	 	 	 	 	
 

(Signature of Limited Partner)
	 
	 	 	 	 	 	 
	 

	 	 	 	 	 	
 

(Mailing Address)
	 
	 	 	 	 	 	 
	 

	 	 	 	 	 	
 

(City) (State) (Zip Code)
	 
	 	 	 	 	 	 
	 

	 	 	 	 	 	Signature Guaranteed by:
	 
	 	 	 	 	 	 
	 

	 	 	 	 	 	
 

	If REIT Shares are to be issued, issue to:	 	 
	 
	 	 	 	 	 	 
	Name:	 	
 
	 	 
	 
	 	 	 	 	 	 
	Social Security	 	 	 	 
	or Tax I.D. Number: