Document:

Exhibit 10.30

                                                                  EXECUTION COPY

                             THIRD AMENDMENT TO THE
                     AMENDED AND RESTATED SECURITY AGREEMENT

                                                       Dated as of July 12, 2004

          THIRD AMENDMENT TO THE AMENDED AND RESTATED SECURITY AGREEMENT (the
"AMENDMENT") among BUILDING MATERIALS CORPORATION OF AMERICA, a Delaware
corporation (the "COMPANY"), each other grantor party to the Security Agreement
referred to below (the "GRANTORS") and CITIBANK, N.A., a national banking
association, as collateral agent under the Security Agreement referred to below
(the "COLLATERAL AGENT").

          PRELIMINARY STATEMENTS:

     (1)  Reference is made to the Credit Agreement, dated as of July 9, 2003
(as amended by the First Amendment to the Credit Agreement, dated as of May 7,
2004, and as otherwise amended, supplemented or otherwise modified through the
date hereof, the "CREDIT AGREEMENT"), among the Company, the lenders from time
to time party thereto, Citicorp USA, Inc., as administrative agent (the
"ADMINISTRATIVE AGENT") and Citigroup Global Markets Inc., as lead arranger.

     (2)  Reference is also made to the Amended and Restated Security Agreement,
dated as of July 9, 2003 (as amended by the First Amendment to the Amended and
Restated Security Agreement, dated as of August 22, 2003, and the Second
Amendment to the Amended and Restated Security Agreement, dated as of May 7,
2004, and as otherwise amended, supplemented or otherwise modified through the
date hereof, the "SECURITY AGREEMENT"), among the Company, the Grantors and the
Collateral Agent.

     (3)  Reference is further made to the Amended and Restated Collateral Agent
Agreement, dated as of July 9, 2003 (as amended, supplemented or otherwise
modified through the date hereof, the "COLLATERAL AGENT AGREEMENT"), among the
Company, the Grantors, each Senior Note Trustee (as defined therein), the
Administrative Agent and the Collateral Agent.

     (4)  Capitalized terms not otherwise defined in this Amendment have the
same meanings as specified in the Security Agreement or the Credit Agreement, as
applicable.

     (5)  The parties hereto have agreed to amend the Security Agreement as
hereinafter set forth.

          SECTION 1. AMENDMENTS TO THE SECURITY AGREEMENT. The Recitals of the
Security Agreement are, effective as of the date hereof, and subject to the
satisfaction of the conditions precedent set forth in Section 2, hereby amended
by:

          (i)       deleting the word "and" at the end of Recital (B)(iv);

<PAGE>
                                       2

          (ii)      adding a new Recital (B)(v) as follows:

                    "(v) the Indenture to be entered by BMCA and a trustee to be
          selected by the Company, as trustee (the "NEW TRUSTEE"), pursuant to
          which senior notes due 2011 or 2014, at the Company's election, will
          be issued (the "NEW INDENTURE"), and"; and

          (iii)     replacing Recital (B)(v) in its entirety with the following:

                    "(vi) the Indenture, dated as of July 5, 2000, between BMCA
          and The Bank of New York, as trustee (the "2002 Trustee", and
          collectively with the 2006 Trustee, the 2007 Trustee, the 2005
          Trustee, the 2008 Trustee, the New Trustee and any trustee in respect
          of any indenture pursuant to which Debt is issued to refinance any of
          the existing Senior Notes (as hereinafter defined) or which is
          otherwise permitted under the Credit Agreement and each of the other
          Senior Notes, the "Senior Note Trustees"), pursuant to which the
          10.50% senior notes due 2002 were issued, as supplemented by a
          Supplement, dated as of December 4, 2000 (the "2002 Indenture", and
          collectively with the 2006 Indenture, the 2007 Indenture, the 2005
          Indenture, the 2008 Indenture, the New Indenture and any other
          indenture pursuant to which Debt is issued to refinance any of the
          existing Senior Notes (as hereinafter defined) or which is otherwise
          permitted under the Credit Agreement and each of the other Senior
          Notes, the "Senior Note Indentures"). Payment of each Senior Note
          issued under each Senior Note Indenture is guaranteed by certain
          Subsidiaries of BMCA (each, a "Senior Note Guarantor") pursuant to
          Guaranties ("Senior Note Guaranties") executed in connection therewith
          or thereafter with respect thereto. The senior notes issued pursuant
          to the Senior Note Indentures (the "Senior Notes") are and will be,
          from time to time, held by various holders (collectively, the
          "Noteholders").".

          SECTION 2. CONDITIONS OF EFFECTIVENESS. This Amendment is subject to
the provisions of Section 14 of the Security Agreement and Section 8.01 of the
Credit Agreement. This Amendment shall become effective as of the date first
above written when, and only when, the Administrative Agent shall have received
counterparts of this Amendment executed by the Company and the Collateral Agent.

          SECTION 3. REFERENCE TO AND EFFECT ON THE LOAN DOCUMENTS.(a) On and
after the effectiveness of this Amendment, each reference in the Security
Agreement to "this Agreement", "hereunder", "hereof" or words of like import
referring to the Security Agreement, and each reference in each of the other
Loan Documents to "the Security Agreement", "thereunder", "thereof" or words of
like import referring to the Security Agreement, shall mean and be a reference
to the Security Agreement, as amended by this Amendment.

          (b) The Security Agreement, as specifically amended by this Amendment,
is and shall continue to be in full force and effect and is hereby in all
respects ratified and confirmed.

          (c) The execution, delivery and effectiveness of this Amendment shall
not, except as expressly provided herein, operate as a waiver of any right,
power or remedy of any Lender, the Administrative Agent or the Collateral Agent
under any of the Loan Documents, nor constitute a waiver of any provision of any
of the Loan Documents.

<PAGE>
                                       3

          SECTION 4. COSTS AND EXPENSES.The Company agrees to pay on demand all
costs and expenses of the Administrative Agent and the Collateral Agent in
connection with the preparation, execution, delivery and administration,
modification and amendment of this Amendment (including, without limitation, the
reasonable fees and expenses of counsel for the Administrative Agent and the
Collateral Agent) in accordance with the terms of Section 8.04 of the Credit
Agreement and Section 10 of the Security Agreement.

          SECTION 5. EXECUTION IN COUNTERPARTS.This Amendment may be executed in
any number of counterparts and by different parties hereto in separate
counterparts, each of which when so executed shall be deemed to be an original
and all of which taken together shall constitute but one and the same agreement.
Delivery of an executed counterpart of a signature page to this Amendment by
telecopier shall be effective as delivery of a manually executed counterpart of
this Amendment.

          SECTION 6. GOVERNING LAW.This Amendment shall be governed by, and
construed in accordance with, the laws of the State of New York.

                [REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK]

<PAGE>

         IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
executed by their respective officers thereunto duly authorized, as of the date
first above written.

                                   BUILDING MATERIALS CORPORATION OF AMERICA

                                   By /s/ John M. Maitner
                                     -------------------------------------------
                                   Name:  John M. Maitner
                                   Title: Vice President and Treasurer

                                   BMCA INSULATION PRODUCTS INC.
                                   BUILDING MATERIALS INVESTMENT CORPORATION
                                   BUILDING MATERIALS MANUFACTURING CORPORATION
                                   DUCTWORK MANUFACTURING CORPORATION
                                   GAF LEATHERBACK CORP.
                                   GAF MATERIALS CORPORATION (CANADA)
                                   GAF PREMIUM PRODUCTS INC.
                                   GAF REAL PROPERTIES, INC.
                                   GAFTECH CORPORATION
                                   LL BUILDING PRODUCTS INC.
                                   PEQUANNOCK VALLEY CLAIM SERVICE COMPANY, INC.
                                   SOUTH PONCA REALTY CORP.
                                   WIND GAP REAL PROPERTY ACQUISITION CORP.
                                   BMCA QUAKERTOWN INC.

                                   By /s/ John M. Maitner
                                     -------------------------------------------
                                   Name:  John M. Maitner
                                   Title: Vice President and Treasurer

<PAGE>

                                   CITIBANK, N.A., as Collateral Agent

                                   By /s/ Barbara L. Bennett
                                     -------------------------------------------
                                   Name:  Barbara L. Bennett
                                   Title: Assistant Vice President

                                   CITICORP USA, INC., as Administrative Agentexv10w1

 

Exhibit 10.1

SECOND AMENDED AND RESTATED

AGREEMENT OF LIMITED PARTNERSHIP

OF

U-STORE-IT, L.P.

Dated as of October __, 2004

 

 

TABLE OF CONTENTS

	 	 	 	 	 
	ARTICLE I DEFINED TERMS
	 	 	1	 
	ARTICLE II ORGANIZATIONAL MATTERS
	 	 	14	 
	Section 2.1 Organization
	 	 	14	 
	Section 2.2 Name
	 	 	14	 
	Section 2.3 Registered Office And Agent; Principal Office
	 	 	14	 
	Section 2.4 Term
	 	 	15	 
	ARTICLE III PURPOSE
	 	 	15	 
	Section 3.1 Purpose And Business
	 	 	15	 
	Section 3.2 Powers
	 	 	15	 
	ARTICLE IV CAPITAL CONTRIBUTIONS AND ISSUANCES OF PARTNERSHIP INTERESTS
	 	 	16	 
	Section 4.1 Capital Contributions Of The Partners
	 	 	16	 
	Section 4.2 Issuances Of Partnership Interests
	 	 	16	 
	Section 4.3 No Preemptive Rights
	 	 	17	 
	Section 4.4 Other Contribution Provisions
	 	 	18	 
	Section 4.5 No Interest On Capital
	 	 	18	 
	ARTICLE V DISTRIBUTIONS
	 	 	18	 
	Section 5.1 Requirement And Characterization Of Distributions
	 	 	18	 
	Section 5.2 Amounts Withheld
	 	 	20	 
	Section 5.3 Distributions Upon Liquidation
	 	 	21	 
	Section 5.4 Revisions To Reflect Issuance Of Partnership Interests
	 	 	21	 
	ARTICLE VI ALLOCATIONS
	 	 	21	 
	Section 6.1 Allocations For Capital Account Purposes
	 	 	21	 
	Section 6.2 Revisions To Allocations To Reflect Issuance Of Partnership Interests
	 	 	23	 
	ARTICLE VII MANAGEMENT AND OPERATIONS OF BUSINESS
	 	 	24	 
	Section 7.1 Management
	 	 	24	 
	Section 7.2 Certificate of Limited Partnership
	 	 	28	 
	Section 7.3 Title to Partnership Assets
	 	 	28	 
	Section 7.4 Reimbursement of the General Partner
	 	 	28	 
	Section 7.5 Outside Activities of the General Partner;
Relationship of Shares to Partnership Units; Funding Debt
	 	 	31	 
	Section 7.6 Transactions With Affiliates
	 	 	34	 
	Section 7.7 Indemnification
	 	 	34	 
	Section 7.8 Liability of the General Partner
	 	 	36	 
	Section 7.9 Other Matters Concerning the General Partner
	 	 	37	 
	Section 7.10 Reliance By Third Parties
	 	 	37	 
	Section 7.11 Restrictions on General Partner’s Authority
	 	 	38	 
	Section 7.12 Loans by Third Parties
	 	 	38	 

 

 

	 	 	 	 	 
	ARTICLE VIII RIGHTS AND OBLIGATIONS OF LIMITED PARTNERS
	 	 	39	 
	Section 8.1 Limitation of Liability
	 	 	39	 
	Section 8.2 Management of Business
	 	 	39	 
	Section 8.3 Outside Activities of Limited Partners
	 	 	39	 
	Section 8.4 Return of Capital
	 	 	40	 
	Section 8.5 Rights of Limited Partners Relating to the Partnership
	 	 	40	 
	Section 8.6 Redemption Right
	 	 	42	 
	ARTICLE IX BOOKS, RECORDS, ACCOUNTING AND REPORTS
	 	 	44	 
	Section 9.1 Records and Accounting
	 	 	44	 
	Section 9.2 Fiscal Year
	 	 	45	 
	Section 9.3 Reports
	 	 	45	 
	ARTICLE X TAX MATTERS
	 	 	45	 
	Section 10.1 Preparation of Tax Returns
	 	 	45	 
	Section 10.2 Tax Elections
	 	 	46	 
	Section 10.3 Tax Matters Partner
	 	 	46	 
	Section 10.4 Organizational Expenses
	 	 	47	 
	Section 10.5 Withholding
	 	 	47	 
	ARTICLE XI TRANSFERS AND WITHDRAWALS
	 	 	48	 
	Section 11.1 Transfer
	 	 	48	 
	Section 11.2 Transfers of Partnership Interests of General Partner
	 	 	48	 
	Section 11.3 Limited Partners’ Rights to Transfer
	 	 	49	 
	Section 11.4 Substituted Limited Partners
	 	 	51	 
	Section 11.5 Assignees
	 	 	52	 
	Section 11.6 General Provisions
	 	 	52	 
	ARTICLE XII ADMISSION OF PARTNERS
	 	 	54	 
	Section 12.1 Admission of a Successor General Partner
	 	 	54	 
	Section 12.2 Admission of Additional Limited Partners
	 	 	54	 
	Section 12.3 Amendment of Agreement and Certificate of Limited Partnership
	 	 	55	 
	ARTICLE XIII DISSOLUTION AND LIQUIDATION
	 	 	55	 
	Section 13.1 Dissolution
	 	 	55	 
	Section 13.2 Winding Up
	 	 	56	 
	Section 13.3 Compliance With Timing Requirements of
Regulations; Restoration of Deficit Capital Accounts
	 	 	57	 
	Section 13.4 Rights of Limited Partners
	 	 	59	 
	Section 13.5 Notice of Dissolution
	 	 	59	 
	Section 13.6 Cancellation of Certificate of Limited Partnership
	 	 	59	 
	Section 13.7 Reasonable Time for Winding Up
	 	 	59	 
	Section 13.8 Waiver of Partition
	 	 	60	 
	Section 13.9 Liability Of Liquidator
	 	 	60	 

ii

 

	 	 	 	 	 
	ARTICLE XIV AMENDMENT OF PARTNERSHIP AGREEMENT; MEETINGS
	 	 	60	 
	Section 14.1 Amendments
	 	 	60	 
	Section 14.2 Meetings of the Partners
	 	 	62	 
	ARTICLE XV GENERAL PROVISIONS
	 	 	62	 
	Section 15.1 Addresses and Notice
	 	 	62	 
	Section 15.2 Titles and Captions
	 	 	63	 
	Section 15.3 Pronouns And Plurals
	 	 	63	 
	Section 15.4 Further Action
	 	 	63	 
	Section 15.5 Binding Effect
	 	 	63	 
	Section 15.6 Creditors
	 	 	63	 
	Section 15.7 Waiver
	 	 	63	 
	Section 15.8 Counterparts
	 	 	63	 
	Section 15.9 Applicable Law
	 	 	64	 
	Section 15.10 Invalidity Of Provisions
	 	 	64	 
	Section 15.11 Power Of Attorney
	 	 	64	 
	Section 15.12 Entire Agreement
	 	 	65	 
	Section 15.13 No Rights As Shareholders
	 	 	65	 
	Section 15.14 Limitation To Preserve REIT Status
	 	 	65	 

EXHIBITS

EXHIBIT A            FORM OF PARTNER REGISTRY

EXHIBIT B            CAPITAL ACCOUNT MAINTENANCE

EXHIBIT C            SPECIAL ALLOCATION RULES

EXHIBIT D            NOTICE OF REDEMPTION

EXHIBIT E            FORM OF DRO REGISTRY

iii

 

SECOND AMENDED AND RESTATED

AGREEMENT OF LIMITED PARTNERSHIP

OF

U-STORE-IT, L.P.

     THIS SECOND AMENDED AND RESTATED AGREEMENT OF LIMITED PARTNERSHIP, dated
as of October
         , 2004, is entered into by and among U-Store-It Trust , a
Maryland real estate investment trust, as the General Partner, and the Persons
whose names are set forth on the Partner Registry (as hereinafter defined) as
Limited Partners, together with any other Persons who become Partners in
U-Store-It, L.P. (the “Partnership”) as provided herein.

     WHEREAS, the partners of the Partnership entered into that certain
Agreement of Limited Partnership of the Partnership dated as of July 31, 1996
(the “Original Agreement”), which was subsequently amended by that certain
First Amendment to Agreement of Limited Partnership, dated as of November 2,
1998 (the “First Amendment to Original Agreement”);

     WHEREAS, the Original Agreement, as amended by the First Amendment to
Original Agreement, was subsequently amended and restated by that certain
Amended and Restated Agreement of Limited Partnership of the Partnership dated
as of October 10, 2000, which was subsequently amended pursuant to (i) that
certain First Amendment to Amended and Restated Agreement of Limited
Partnership of the Partnership dated as of December 12, 2000, and (ii) that
certain Second Amendment to Amended and Restated Agreement of Limited
Partnership of the Partnership dated as of July 31, 2001 (such Amended and
Restated Agreement of Limited Partnership, as so amended, the “Prior
Agreement”); and

     WHEREAS, the name of the Partnership was changed from “Acquiport/Amsdell I
Limited Partnership” to “U-Store-It, L.P.” pursuant to an amendment to the
Certificate of Limited Partnership of the Partnership dated on or about the
date hereof;

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

ARTICLE I

DEFINED TERMS

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

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

 

 

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

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

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

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

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

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

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

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

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

2

 

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

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

	 	(i)	 	all interest, principal and other debt payments
made during such period by the Partnership,
	 
	 	(ii)	 	all cash expenditures (including capital
expenditures) made by the Partnership during such period,
	 
	 	(iii)	 	investments in any entity (including loans made
thereto) to the extent that such investments are permitted
under this Agreement and are not otherwise described in
clauses (b)(i) or (ii), and
	 
	 	(iv)	 	the amount of any increase in reserves
established during such period which the General Partner
determines is necessary or appropriate in its sole and
absolute discretion (including any reserves that may be
necessary or appropriate to account for distributions required
with respect to Partnership Interests having a preference over
other classes of Partnership Interests).

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

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

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

3

 

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

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

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

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

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

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

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

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

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

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

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

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

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

4

 

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

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

     “Conversion Factor” means 1.0; provided that, if the General Partner
Entity (i) declares or pays a dividend on its outstanding Shares in Shares or
makes a distribution to all holders of its outstanding Shares in Shares, (ii)
subdivides its outstanding Shares or (iii) combines its outstanding Shares into
a smaller number of Shares, the Conversion Factor shall be adjusted by
multiplying the Conversion Factor by a fraction, the numerator of which shall
be the number of Shares issued and outstanding on the record date for such
dividend, distribution, subdivision or combination (assuming for such purposes
that such dividend, distribution, subdivision or combination has occurred as of
such time) and the denominator of which shall be the actual number of Shares
(determined without the above assumption) issued and outstanding on the record
date for such dividend, distribution, subdivision or combination; and provided
further that if an entity shall cease to be the General Partner Entity (the
“Predecessor Entity”) and another entity shall become the General Partner
Entity (the “Successor Entity”), the Conversion Factor shall be adjusted by
multiplying the Conversion Factor by a fraction, the numerator of which is the
Value of one Share of the Predecessor Entity, determined as of the date when
the Successor Entity becomes the General Partner Entity, and the denominator of
which is the Value of one Share of the Successor Entity, determined as of that
same date. (For purposes of the second proviso in the preceding sentence, if
any shareholders of the Predecessor Entity will receive consideration in
connection with the transaction in which the Successor Entity becomes the
General Partner Entity, the numerator in the fraction described above for
determining the adjustment to the Conversion Factor (that is, the Value of one
Share of the Predecessor Entity) shall be the sum of the greatest amount of
cash and the fair market value (as determined in good faith by the General
Partner) of any securities and other consideration that the holder of one Share
in the Predecessor Entity could have received in such transaction (determined
without regard to any provisions governing fractional shares).) Any adjustment
to the Conversion Factor shall become effective immediately after the effective
date of the event retroactive to the record date, if any, for the event giving
rise thereto, it being intended that (x) adjustments to the Conversion Factor
are to be made to avoid unintended dilution or anti-dilution as a result of
transactions in which Shares are issued, redeemed or exchanged without a
corresponding issuance, redemption or exchange of Partnership Units and (y) if
a Specified Redemption Date shall fall between the record date and the
effective date of any event of the type described above, that the Conversion
Factor applicable to such redemption shall be adjusted to take into account
such event.

5

 

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

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

     “Declaration of Trust” means the Declaration of Trust relating to the
General Partner filed in the State of Maryland, as amended or restated from
time to time.

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

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

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

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

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

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

6

 

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

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

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

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

     “General Partnership Interest” means a Partnership Interest held by the
General Partner that is a general partnership interest. A General Partnership
Interest may be expressed as a number of Partnership Units.

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

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

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

     “Incapacity” or “Incapacitated” means, (i) as to any individual who is a
Partner, death, total physical disability or entry by a court of competent
jurisdiction adjudicating such Partner incompetent to manage his or her Person
or estate, (ii) as to any corporation which is a Partner, the filing of a
certificate of dissolution, or its equivalent, for the corporation or the
revocation of its charter, (iii) as to any partnership or limited liability
company which is a Partner, the dissolution and commencement of winding up of
the partnership or limited liability company, (iv) as to any estate which is a
Partner, the distribution by the fiduciary of the estate’s entire interest in
the Partnership, (v) as to any trustee of a trust which is a Partner, the
termination of the trust (but not the substitution of a new trustee) or (vi) as
to any Partner, the bankruptcy of such Partner. For purposes of this
definition, bankruptcy of a Partner shall be deemed to have occurred when (a)
the Partner commences a voluntary proceeding seeking liquidation,
reorganization or other relief under any bankruptcy, insolvency or other
similar law now or hereafter in effect, (b) the Partner is adjudged as bankrupt
or insolvent, or a final and nonappealable order for relief under any
bankruptcy, insolvency or similar law now or hereafter in effect has been
entered against the Partner, (c) the Partner executes and delivers a general
assignment for the benefit of the Partner’s creditors, (d) the Partner files an
answer or other

7

 

pleading admitting or failing to contest the material allegations of a
petition filed against the Partner in any proceeding of the nature described in
clause (b) above, (e) the Partner seeks, consents to or acquiesces in the
appointment of a trustee, receiver or liquidator for the Partner or for all or
any substantial part of the Partner’s properties, (f) any proceeding seeking
liquidation, reorganization or other relief under any bankruptcy, insolvency or
other similar law now or hereafter in effect has not been dismissed within one
hundred twenty (120) days after the commencement thereof, (g) the appointment
without the Partner’s consent or acquiescence of a trustee, receiver or
liquidator has not been vacated or stayed within ninety (90) days of such
appointment or (h) an appointment referred to in clause (g) is not vacated
within ninety (90) days after the expiration of any such stay.

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

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

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

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

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

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

     “Net Loss” means, for any taxable period, the excess, if any, of the
Partnership’s items of loss and deduction for such taxable period over the
Partnership’s items of income and gain for such taxable period. The items
included in the calculation of Net Loss shall be determined in accordance with
Exhibit B. If an item of income, gain, loss or deduction that has been included
in the initial computation of Net Loss is subjected to the special allocation
rules in Exhibit C, Net

8

 

Loss or the resulting Net Income, whichever the case may be, shall be
recomputed without regard to such item.

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

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

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

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

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

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

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

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

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

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

     “Partnership” means the limited partnership formed under the Act upon the
terms and conditions set forth in the Original Agreement and continued pursuant
to the Prior Agreement and this Agreement, or any successor to such limited
partnership.

9

 

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

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

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

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

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

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

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

     “Publicly Traded” means listed or admitted to trading on the New York
Stock Exchange, the American Stock Exchange or another national securities
exchange or designated for quotation on the NASDAQ National Market, or any
successor to any of the foregoing.

     “Qualified Assets” means any of the following assets: (i) interests,
rights, options, warrants or convertible or exchangeable securities of the
Partnership; (ii) Debt issued by the Partnership or any Subsidiary thereof in
connection with the incurrence of Funding Debt; (iii) equity interests in
Qualified REIT Subsidiaries and limited liability companies whose assets
consist solely of Qualified Assets; (iv) up to a one percent (1%) equity
interest in any partnership or limited liability company at least ninety-nine
percent (99%) of the equity of which is owned, directly or indirectly, by the
Partnership; (v) cash held for payment of administrative expenses or

10

 

pending distribution to security holders of the General Partner Entity or
any wholly owned Subsidiary thereof or pending contribution to the Partnership;
and (vi) other tangible and intangible assets that, taken as a whole, are de
minimis in relation to the net assets of the Partnership and its Subsidiaries.

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

     “Recapture Income” means any gain recognized by the Partnership (computed
without regard to any adjustment required by Section 734 or Section 743 of the
Code) upon the disposition of any property or asset of the Partnership, which
gain is characterized either as ordinary income or as “unrecaptured Section
1250 gain” (as defined in Section 1(h)(6) of the Code) because it represents
the recapture of depreciation deductions previously taken with respect to such
property or asset.

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

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

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

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

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

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

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

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

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

11

 

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

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

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

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

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

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

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

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

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

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

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

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

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

     “Value” means, with respect to one Share of a class of outstanding Shares
of the General Partner Entity that are Publicly Traded, the average of the
daily market price for the ten consecutive trading days immediately preceding
the date with respect to which value must be determined. The market price for
each such trading day shall be the closing price, regular way, on such day, or
if no such sale takes place on such day, the average of the closing bid and
asked prices on such day. If the outstanding Shares of the General Partner
Entity are Publicly Traded and the Shares Amount includes, in addition to the
Shares, rights or interests that a holder of Shares has received or would be
entitled to receive, then the Value of such rights shall be determined by the
General Partner acting in good faith on the basis of such quotations and other
information as it considers, in its reasonable judgment, appropriate. If the
Shares of the General Partner Entity are not Publicly Traded, the Value of the
Shares Amount per Partnership Unit offered for redemption (which will be the
Cash Amount per Partnership Unit offered for redemption payable pursuant to
Section 8.6.A) means the amount that a holder of one Partnership Unit would
receive if each of the assets of the Partnership were to be sold for its fair
market value on the Specified Redemption Date, the Partnership were to pay all
of its outstanding liabilities, and the remaining proceeds were to be
distributed to the Partners in accordance with the terms of this Agreement.
Such Value shall be determined by the General Partner, acting in good faith and
based upon a commercially reasonable estimate of the amount that would be
realized by the Partnership if each asset of the Partnership (and each asset of
each partnership, limited liability company, trust, joint venture or other
entity in which the Partnership owns a direct or indirect interest) were sold
to an unrelated purchaser in an arms’ length transaction where neither the
purchaser nor the seller were under economic compulsion to enter into the
transaction (without regard to any discount in value as a result of the
Partnership’s minority interest in any property or any illiquidity of the
Partnership’s interest in any property).

13

 

ARTICLE II

ORGANIZATIONAL MATTERS

Section 2.1 Organization

     A. Organization, Status and Rights. The Partnership is a limited
partnership organized pursuant to the provisions of the Act and upon the terms
and conditions set forth in the Original Agreement. The Partners hereby confirm
and agree to their status as partners of the Partnership and to continue the
business of the Partnership on the terms set forth in this Agreement. Except as
expressly provided herein, the rights and obligations of the Partners and the
administration and termination of the Partnership shall be governed by the Act.
The Partnership Interest of each Partner shall be personal property for all
purposes.

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

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

Section 2.2 Name

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

Section 2.3 Registered Office And Agent; Principal Office

     The address of the registered office of the Partnership in the State of
Delaware shall be located at Corporation Trust Center, 1209 Orange Street,
Wilmington County of New Castle,

14

 

Delaware 19801, and the registered agent for service of process on the
Partnership in the State of Delaware at such registered office shall be
Corporation Trust Company. The principal office of the Partnership shall be
6745 Engle Road, Suite 300, Middleburg Heights, Ohio 44130, or such other place
as the General Partner may from time to time designate by notice to the Limited
Partners. The Partnership may maintain offices at such other place or places
within or outside the State of Delaware as the General Partner deems advisable.

Section 2.4 Term

     The term of the Partnership commenced on July 25, 1996, and shall continue
until dissolved pursuant to the provisions of Article XIII or as otherwise
provided by law.

ARTICLE III

PURPOSE

Section 3.1 Purpose And Business

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

Section 3.2 Powers

     The Partnership is empowered to do any and all acts and things necessary,
appropriate, proper, advisable, incidental to or convenient for the furtherance
and accomplishment of the purposes and business described herein and for the
protection and benefit of the Partnership, including, without limitation, full
power and authority, directly or through its ownership interest in other
entities, to enter into, perform and carry out contracts of any kind, borrow
money and issue evidences of indebtedness, whether or not secured by mortgage,
deed of trust, pledge or other lien, acquire, own, manage, improve and develop
real property, and lease, sell, transfer and dispose of real property;
provided, however, that the Partnership shall not take, or shall refrain from
taking, any action which, in the judgment of the General Partner, in its sole
and absolute discretion, (i) could adversely affect the ability of the General
Partner Entity to continue to

15

 

qualify as a REIT, (ii) could subject the General Partner Entity to any
taxes under Section 857 or Section 4981 of the Code or (iii) could violate any
law or regulation of any governmental body or agency having jurisdiction over
either the General Partner or the General Partner Entity or its securities,
unless such action (or inaction) shall have been specifically consented to by
the General Partner in writing.

ARTICLE IV

CAPITAL CONTRIBUTIONS AND ISSUANCES OF PARTNERSHIP INTERESTS

Section 4.1 Capital Contributions Of The Partners

     Prior to the execution of this Agreement, the Partners have made the
Capital Contributions as set forth in the Partner Registry. On the date hereof,
the Partners own Partnership Units in the amounts set forth in the Partner
Registry and have Percentage Interests in the Partnership as set forth in the
Partner Registry. The number of Partnership Units and Percentage Interest
shall be adjusted in the Partner Registry from time to time by the General
Partner to the extent necessary to reflect accurately exchanges, redemptions,
Capital Contributions, the issuance of additional Partnership Units or similar
events having an effect on a Partner’s Percentage Interest occurring after the
date hereof in accordance with the terms of this Agreement. To the extent the
Partnership acquires any property by the merger of any other Person into the
Partnership or any of its Subsidiaries, Persons who receive Partnership
Interests in exchange for their interests in the Person merging into the
Partnership or any Subsidiary shall become Partners and shall be deemed to have
made Capital Contributions as provided in the applicable merger agreement and
as set forth in the Partner Registry. One thousand (1,000) Partnership Units
shall be deemed to be the General Partner’s Partnership Units and shall be the
General Partnership Interest of the General Partner. All other Partnership
Units held by the General Partner shall be deemed to be Limited Partnership
Interests and shall be held by the General Partner in its capacity as a Limited
Partner in the Partnership. Except as provided in Sections 7.5, 10.5, and 13.3
hereof, the Partners shall have no obligation to make any additional Capital
Contributions or provide any additional funding to the Partnership (whether in
the form of loans, repayments of loans or otherwise). Except as otherwise set
forth in Section 13.3 hereof, no Partner shall have any obligation to restore
any deficit that may exist in its Capital Account, either upon a liquidation of
the Partnership or otherwise.

Section 4.2 Issuances Of Partnership Interests

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

16

 

loss, deduction and credit to each such class or
series of Partnership Interests, (ii) the right of each such class or series of
Partnership Interests to share in Partnership distributions, (iii) the rights
of each such class or series of Partnership Interests upon dissolution and
liquidation of the Partnership, (iv) the rights, if any, of each such class to
vote on matters that require the vote or Consent of the Limited Partners, and
(v) the consideration, if any, to be received by the Partnership; provided that
no such Partnership Units or other Partnership Interests shall be issued to the
General Partner unless either (a) the Partnership Interests are issued in
connection with the grant, award or issuance of Shares or other equity
interests in the General Partner (including a transaction described in Section
7.4.F) having designations, preferences and other rights such that the economic
interests attributable to such Shares or other equity interests are
substantially similar to the designations, preferences and other rights (except
voting rights) of the Partnership Interests issued to the General Partner in
accordance with this Section 4.2.A or (b) the additional Partnership Interests
are issued to all Partners holding Partnership Interests in the same class in
proportion to their respective Percentage Interests in such class. If the
Partnership issues Partnership Interests pursuant to this Section 4.2.A, the
General Partner shall make such revisions to this Agreement (including but not
limited to the revisions described in Section 5.4, Section 6.2 and Section 8.6)
as it deems necessary to reflect the issuance of such Partnership Interests.
The designation of any newly issued class or series of Partnership Interests
may provide a formula for treating such Partnership Interests solely for
purposes of voting on or consenting to any matter that requires the vote or
Consent of the Limited Partners as set forth in one or more of Sections 7.5.A,
7.11.A, 7.11.B, 11.2.B, 13.1(i), 13.1(ii), 13.1(vi), 14.1.A, 14.1.C, 14.2.A,
and 14.2.B of this Agreement as the equivalent of a specified number (including
any fraction thereof) of Class A Units.

     B. Classes of Partnership Units. From and after the date of the
Agreement, the Partnership shall have two classes of Partnership Units entitled
“Class A Units” and “Class B Units” and such additional classes of Partnership
Units as may be created by the General Partner pursuant to Section 4.2.A.
Class A Units, Class B Units, or a class of Partnership Interests created
pursuant to Section 4.2.A, at the election of the General Partner, in its sole
and absolute discretion, may be issued to newly admitted Partners in exchange
for the contribution by such Partners of cash, real estate partnership
interests, stock, notes or other assets or consideration; provided that any
Partnership Unit that is not specifically designated by the General Partner as
being of a particular class shall be deemed to be a Class A Unit. Each Class B
Unit shall be converted automatically into a Class A Unit on the day
immediately following the Partnership Record Date for the Distribution Period
(as defined in Section 5.1.C) in which such Class B Unit was issued, without
the requirement for any action by the General Partner, the Partnership or the
Partner holding the Class B Unit.

Section 4.3 No Preemptive Rights

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

17

 

Section 4.4 Other Contribution Provisions

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

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

Section 4.5 No Interest On Capital

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

ARTICLE V

DISTRIBUTIONS

Section 5.1 Requirement And Characterization Of Distributions

     A. General. The General Partner shall distribute at least quarterly
an amount equal to one hundred percent (100%) of the Available Cash of the
Partnership with respect to such quarter or shorter period to the Partners in
accordance with the terms established for the class or classes of Partnership
Interests held by such Partners who are Partners on the respective Partnership
Record Date with respect to such quarter or shorter period as provided in
Sections 5.1.B, 5.1.C and 5.1.D and in accordance with the respective terms
established for each class of Partnership Interest. Notwithstanding anything to
the contrary contained herein, in no event may a Partner receive a distribution
of Available Cash with respect to a Partnership Unit for a quarter or shorter
period if such Partner is entitled to receive a distribution with respect to a
Share for which such Partnership Unit has been redeemed or exchanged. Unless
otherwise expressly provided for herein, or in the terms established for a new
class or series of Partnership Interests created in accordance with Article IV
hereof, no Partnership Interest shall be entitled to a distribution in
preference to any other Partnership Interest. The General Partner shall make
such reasonable efforts, as determined by it in its sole and absolute
discretion and consistent with the qualification of the General Partner Entity
as a REIT, to distribute Available Cash (a) to Limited Partners so as to
preclude any such distribution or portion thereof from being treated as part of
a sale of property to the Partnership by a Limited Partner under Section 707 of
the Code or the Regulations thereunder; provided, that, the General Partner and
the Partnership shall not have liability to a Limited Partner under any
circumstances as a result of any distribution to a Limited Partner being so
treated, and (b) to the General Partner in an amount sufficient to enable the
General Partner Entity to make distributions to its shareholders that will
enable the General

18

 

Partner Entity to (1) satisfy the requirements for qualification as a REIT
under the Code and the Regulations (the “REIT Requirements”), and (2) avoid any
federal income or excise tax liability.

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

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

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

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

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

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

     The Class A Share shall be distributed pro rata among Partners holding
Class A Units on the Partnership Record Date for the Distribution Period in
accordance with the number of Class A Units held by each Partner on such
Partnership Record Date; provided that in no event may a

19

 

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

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

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

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

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

Section 5.2 Amounts Withheld

     All amounts withheld pursuant to the Code or any provisions of any state
or local tax law and Section 10.5 with respect to any allocation, payment or
distribution to the General Partner, the Limited Partners or Assignees shall be
treated as amounts distributed to the General Partner,

20

 

Limited Partners or Assignees, as the case may be, pursuant to Section 5.1
for all purposes under this Agreement.

Section 5.3 Distributions Upon Liquidation

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

Section 5.4 Revisions To Reflect Issuance Of Partnership Interests

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

ARTICLE VI

ALLOCATIONS

Section 6.1 Allocations For Capital Account Purposes

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

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

	(1)	 	first, to the General Partner to the extent that Net Losses
previously allocated the General Partner pursuant to Section
6.1.B(6) exceed Net Income previously allocated to the General
Partner pursuant to this clause (1);
	 
	(2)	 	second, to each DRO Partner until the cumulative Net Income
allocated such DRO Partner under this clause (2) equals the
cumulative Net Losses allocated such DRO Partner under Section
6.1.B(5) (and, among the DRO Partners, pro rata in proportion to
their respective percentages of the cumulative Net Losses allocated
to all DRO Partners pursuant to Section 6.1.B(5) hereof);
	 
	(3)	 	third, to the General Partner until the cumulative Net Income
allocated under this clause (3) equals the cumulative Net Losses
allocated the General Partner under Section 6.1.B(4);
	 
	(4)	 	fourth, to the holders of any Partnership Interests that are
entitled to any preference upon liquidation until the cumulative Net
Income allocated under this

21

 

	 	 	clause (4) equals the cumulative Net Losses allocated to such
Partners under Section 6.1.B(3);
	 
	(5)	 	fifth, to the holders of any Partnership Interests that are
entitled to any preference in distribution in accordance with the
rights of any other class of Partnership Interests until each such
Partnership Interest has been allocated, on a cumulative basis
pursuant to this clause (5), Net Income equal to the amount of
distributions payable that are attributable to the preference of
such class of Partnership Interests whether or not paid (and, within
such class, pro rata in proportion to the respective Percentage
Interests as of the last day of the period for which such allocation
is being made); and
	 
	(6)	 	finally, with respect to Partnership Interests that are not
entitled to any preference in distribution or with respect to which
distributions are not limited to any preference in distribution, pro
rata to each such class in accordance with the terms of such class
(and, within such class, pro rata in proportion to the respective
Percentage Interests as of the last day of the period for which such
allocation is being made).

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

	(1)	 	first, to the holders of Partnership Interests, in proportion
to, and to the extent that, their share of the Net Income previously
allocated pursuant to Section 6.1.A(6) exceeds, on a cumulative
basis, the sum of (a) distributions with respect to such Partnership
Interests pursuant to clause (ii) of Section 5.1.B and (b) Net
Losses allocated under this clause (1);
	 
	(2)	 	second, with respect to classes of Partnership Interests that
are not entitled to any preference in distribution upon
distribution, pro rata to each such class in accordance with the
terms of such class (and, within such class, pro rata in proportion
to the respective Percentage Interests as of the last day of the
period for which such allocation is being made); provided that Net
Losses shall not be allocated to any Partner pursuant to this
Section 6.1.B(2) to the extent that such allocation would cause such
Partner to have an Adjusted Capital Account Deficit (or increase any
existing Adjusted Capital Account Deficit) (determined in each case
(i) by not including in the Partners’ Adjusted Capital Accounts any
amount that a Partner is obligated to contribute to the Partnership
with respect to any deficit in its Capital Account pursuant to
Section 13.3 and (ii) in the case of a Partner who also holds
classes of Partnership Interests that are entitled to any
preferences in distribution upon liquidation, by subtracting from
such Partners’ Adjusted Capital Account the amount of such preferred
distribution to be made upon liquidation) at the end of such taxable
year (or portion thereof);
	 
	(3)	 	third, with respect to classes of Partnership Interests that
are entitled to any preference in distribution upon liquidation, in
reverse order of the priorities of each such class (and within each
such class, pro rata in proportion to their

22

 

	 	 	respective Percentage Interests as of the last day of the period
for which such allocation is being made); provided that Net Losses
shall not be allocated to any Partner pursuant to this Section
6.1.B(3) to the extent that such allocation would cause such
Partner to have an Adjusted Capital Account Deficit (or increase
any existing Adjusted Capital Account Deficit) (determined in each
case by not including in the Partners’ Adjusted Capital Accounts
any amount that a Partner is obligated to contribute to the
Partnership with respect to any deficit in its Capital Account
pursuant to Section 13.3) at the end of such taxable year (or
portion thereof);
	 
	(4)	 	fourth, to the General Partner in an amount equal to the
excess of (a) the amount of the Partnership Recourse Liabilities
over (b) the Aggregate DRO Amount;
	 
	(5)	 	fifth, to and among the DRO Partners, in proportion to their
respective DRO Amounts, until such time as the DRO Partners as a
group have been allocated cumulative Net Losses pursuant to this
clause (5) equal to the Aggregate DRO Amount; and
	 
	(6)	 	thereafter, to the General Partner.

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

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

Section 6.2 Revisions To Allocations To Reflect Issuance Of Partnership Interests

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

23

 

ARTICLE VII

MANAGEMENT AND OPERATIONS OF BUSINESS

Section 7.1 Management

     A. Powers of General Partner. Except as otherwise expressly
provided in this Agreement, all management powers over the business and affairs
of the Partnership are and shall be exclusively vested in the General Partner,
and no Limited Partner shall have any right to participate in or exercise
control or management power over the business and affairs of the Partnership.
The General Partner may not be removed by the Limited Partners with or without
cause (unless the Shares of the General Partner Entity corresponding to
Partnership Units are not Publicly Traded, in which case the General Partner
may be removed with or without cause by the Consent of the Partners holding
Partnership Interests representing more than fifty percent (50%) of the
Percentage Interest of the Class A Units). In addition to the powers now or
hereafter granted a general partner of a limited partnership under applicable
law or which are granted to the General Partner under any other provision of
this Agreement, the General Partner, subject to Section 7.11, shall have full
power and authority to do all things deemed necessary or desirable by it to
conduct the business of the Partnership, to exercise all powers set forth in
Section 3.2 and to effectuate the purposes set forth in Section 3.1, including,
without limitation:

	(1)	 	the making of any expenditures, the lending or borrowing of
money (including, without limitation, making prepayments on loans
and borrowing money to permit the Partnership to make distributions
to its Partners in such amounts as are required under Section 5.1.A
or will permit the General Partner Entity (so long as the General
Partner Entity qualifies as a REIT) to avoid the payment of any
federal income tax (including, for this purpose, any excise tax
pursuant to Section 4981 of the Code) and to make distributions to
its shareholders sufficient to permit the General Partner Entity to
maintain its REIT status), the assumption or guarantee of, or other
contracting for, indebtedness and other liabilities including,
without limitation, the assumption or guarantee of the debt of the
General Partner, its Subsidiaries or the Partnership’s Subsidiaries,
the issuance of evidences of indebtedness (including the securing of
same by mortgage, deed of trust or other lien or encumbrance on the
Partnership’s assets) and the incurring of any obligations the
General Partner deems necessary for the conduct of the activities of
the Partnership;
	 
	(2)	 	the making of tax, regulatory and other filings, or rendering
of periodic or other reports to governmental or other agencies
having jurisdiction over the business or assets of the Partnership;
	 
	(3)	 	the acquisition, disposition, mortgage, pledge, encumbrance,
hypothecation or exchange of any or all of the assets of the
Partnership (including acquisition of any new assets, the exercise
or grant of any conversion, option, privilege or subscription right
or other right available in connection with any assets at any time
held by the Partnership) or the merger or other combination of the
Partnership or any Subsidiary with or into another entity on such
terms as the General Partner deems proper;

24

 

	(4)	 	the use of the assets of the Partnership (including, without
limitation, cash on hand) for any purpose consistent with the terms
of this Agreement and on any terms it sees fit, including, without
limitation, the financing of the conduct of the operations of the
General Partner, the Partnership or any of the Partnership’s
Subsidiaries, the lending of funds to other Persons (including,
without limitation, the General Partner, its Subsidiaries and the
Partnership’s Subsidiaries) and the repayment of obligations of the
Partnership and its Subsidiaries and any other Person in which the
Partnership has an equity investment and the making of capital
contributions to its Subsidiaries;
	 
	(5)	 	the management, operation, leasing, landscaping, repair,
alteration, demolition or improvement of any real property or
improvements owned by the Partnership or any Subsidiary of the
Partnership or any Person in which the Partnership has made a direct
or indirect equity investment;
	 
	(6)	 	the negotiation, execution, and performance of any contracts,
conveyances or other instruments that the General Partner considers
useful or necessary to the conduct of the Partnership’s operations
or the implementation of the General Partner’s powers under this
Agreement, including contracting with contractors, developers,
consultants, accountants, legal counsel, other professional advisors
and other agents and the payment of their expenses and compensation
out of the Partnership’s assets;
	 
	(7)	 	the mortgage, pledge, encumbrance or hypothecation of any
assets of the Partnership;
	 
	(8)	 	the distribution of Partnership cash or other Partnership
assets in accordance with this Agreement;
	 
	(9)	 	the holding, managing, investing and reinvesting of cash and
other assets of the Partnership;
	 
	(10)	 	the collection and receipt of revenues and income of the
Partnership;
	 
	(11)	 	the selection, designation of powers, authority and duties
and the dismissal of employees of the Partnership (including,
without limitation, employees having titles such as “president,”
“vice president,” “secretary” and “treasurer”) and agents, outside
attorneys, accountants, consultants and contractors of the
Partnership and the determination of their compensation and other
terms of employment or hiring;
	 
	(12)	 	the maintenance of such insurance for the benefit of the
Partnership and the Partners as it deems necessary or appropriate;
	 
	(13)	 	the formation of, or acquisition of an interest (including
non-voting interests in entities controlled by Affiliates of the
Partnership or third parties) in, and the contribution of property
to, any further limited or general partnerships, joint ventures,
limited liability companies or other relationships that it deems
desirable

25

 

	 	 	(including, without limitation, the acquisition of interests in,
and the contributions of funds or property to, or making of loans
to, its Subsidiaries and any other Person in which it has an equity
investment from time to time, or the incurrence of indebtedness on
behalf of such Persons or the guarantee of the obligations of such
Persons); provided that, as long as the General Partner has
determined to continue to qualify as a REIT, the Partnership may
not engage in any such formation, acquisition or contribution that
would cause the General Partner to fail to qualify as a REIT;
	 
	(14)	 	the control of any matters affecting the rights and
obligations of the Partnership, including the settlement,
compromise, submission to arbitration or any other form of dispute
resolution or abandonment of any claim, cause of action, liability,
debt or damages due or owing to or from the Partnership, the
commencement or defense of suits, legal proceedings, administrative
proceedings, arbitrations or other forms of dispute resolution, the
representation of the Partnership in all suits or legal proceedings,
administrative proceedings, arbitrations or other forms of dispute
resolution, the incurring of legal expense and the indemnification
of any Person against liabilities and contingencies to the extent
permitted by law;
	 
	(15)	 	the determination of the fair market value of any Partnership
property distributed in kind, using such reasonable method of
valuation as the General Partner may adopt;
	 
	(16)	 	the exercise, directly or indirectly, through any
attorney-in-fact acting under a general or limited power of
attorney, of any right, including the right to vote, appurtenant to
any assets or investment held by the Partnership;
	 
	(17)	 	the exercise of any of the powers of the General Partner
enumerated in this Agreement on behalf of or in connection with any
Subsidiary of the Partnership or any other Person in which the
Partnership has a direct or indirect interest, individually or
jointly with any such Subsidiary or other Person;
	 
	(18)	 	the exercise of any of the powers of the General Partner
enumerated in this Agreement on behalf of any Person in which the
Partnership does not have any interest pursuant to contractual or
other arrangements with such Person;
	 
	(19)	 	the making, executing and delivering of any and all deeds,
leases, notes, deeds to secure debt, mortgages, deeds of trust,
security agreements, conveyances, contracts, guarantees, warranties,
indemnities, waivers, releases or other legal instruments or
agreements in writing necessary or appropriate in the judgment of
the General Partner for the accomplishment of any of the powers of
the General Partner enumerated in this Agreement;
	 
	(20)	 	the distribution of cash to acquire Partnership Units held by
a Limited Partner in connection with a Limited Partner’s exercise of
its Redemption Right under Section 8.6;

26

 

	 	(21)	 	the determination regarding whether a payment to a Partner
who exercises its Redemption Right under Section 8.6 that is assumed
by the General Partner will be paid in the form of the Cash Amount
or the Shares Amount, except as such determination may be limited by
Section 8.6.
	 
	 	(22)	 	the acquisition of Partnership Interests in exchange for
cash, debt instruments and other property;
	 
	 	(23)	 	the maintenance of the Partner Registry in the books and
records of the Partnership to reflect the Capital Contributions and
Percentage Interests of the Partners as the same are adjusted from
time to time to the extent necessary to reflect redemptions, Capital
Contributions, the issuance of Partnership Units, the admission of
any Additional Limited Partner or any Substituted Limited Partner or
otherwise; and
	 
	 	(24)	 	the registration of any class of securities of the
Partnership under the Securities Act of 1933, as amended or the
Securities Exchange Act of 1934, as amended, and the listing of any
debt securities of the Partnership on any exchange.

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

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

     D. Working Capital and Other Reserves. At all times from and after the
date hereof, the General Partner may cause the Partnership to establish and
maintain working capital reserves in such amounts as the General Partner, in
its sole and absolute discretion, deems appropriate and reasonable from time to
time, including upon liquidation of the Partnership under Section 13.

     E. No Obligations to Consider Tax Consequences of Limited Partners. In
exercising their authority under this Agreement, the General Partner (which for
the purposes of this Section 7.1.E shall include, the board of trustees of the
General Partner) may, but shall be under no obligation to, take into account
the tax consequences to any Partner (including the General

27

 

Partner) of any action taken (or not taken) by the General Partner. The
General Partner and the Partnership shall not have liability to a Limited
Partner for monetary or other damages or otherwise for losses sustained,
liabilities incurred or benefits not derived by such Limited Partner in
connection with any decisions, provided that the General Partner has acted in
good faith and pursuant to its authority under this Agreement and any decisions
or actions taken or not taken in accordance with the terms of this Agreement
shall not constitute a breach of any duty owed to the Partnership or the
Limited Partners by law or equity, fiduciary or otherwise.

Section 7.2 Certificate of Limited Partnership

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

Section 7.3 Title to Partnership Assets

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

Section 7.4 Reimbursement of the General Partner

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

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     B. Responsibility for Partnership and General Partner and General Partner
Entity Expenses. The Partnership shall be responsible for and shall pay all
expenses relating to the Partnership’s organization, the ownership of its
assets and its operations. The General Partner shall be reimbursed on a monthly
basis, or such other basis as the General Partner may determine in its sole and
absolute discretion, for all expenses it incurs relating to or resulting from
the ownership and operation of, or for the benefit of, the Partnership
(including, without limitation, expenses related to the operations of the
General Partner and the General Partner Entity and to the management and
administration of any Subsidiaries of the General Partner, the General Partner
Entity or the Partnership or Affiliates of the Partnership, such as auditing
expenses and filing fees); provided that (i) the amount of any such
reimbursement shall be reduced by (x) any interest earned by the General
Partner with respect to bank accounts or other instruments or accounts held by
it on behalf of the Partnership as permitted in Section 7.5.A (which interest
is considered to belong to the Partnership and shall be paid over to the
Partnership to the extent not applied to reimburse the General Partner for
expenses hereunder); and (y) any amount derived by the General Partner from any
investments permitted in Section 7.5.A; (ii) the Partnership shall not be
responsible for any taxes that the General Partner or General Partner Entity
would not have been required to pay if that entity qualified as a REIT for
federal income tax purposes or any taxes imposed on the General Partner or
General Partner Entity by reason of that entity’s failure to distribute to its
shareholders an amount equal to its taxable income; (iii) the Partnership shall
not be responsible for expenses or liabilities incurred by the General Partner
in connection with any business or assets of the General Partner other than its
ownership of Partnership Interests or operation of the business of the
Partnership or ownership of interests in Qualified Assets to the extent
permitted in Section 7.5.A; and (iv) the Partnership shall not be responsible
for any expenses or liabilities of the General Partner that are excluded from
the scope of the indemnification provisions of Section 7.7.A by reason of the
provisions of clause (i), (ii) or (iii) thereof. The General Partner shall
determine in good faith the amount of expenses incurred by it or the General
Partner Entity related to the ownership of Partnership Interests or operation
of, or for the benefit of, the Partnership. If certain expenses are incurred
that are related both to the ownership of Partnership Interests or operation
of, or for the benefit of, the Partnership and to the ownership of other assets
(other than Qualified Assets as permitted under Section 7.7.A) or the operation
of other businesses, such expenses will be allocated to the Partnership and
such other entities (including the General Partner and General Partner Entity)
owning such other assets or businesses in such a manner as the General Partner
in its sole and absolute discretion deems fair and reasonable. Such
reimbursements shall be in addition to any reimbursement to the General Partner
and the General Partner Entity pursuant to Section 10.3.C and as a result of
indemnification pursuant to Section 7.7. All payments and reimbursements
hereunder shall be characterized for federal income tax purposes as expenses of
the Partnership incurred on its behalf, and not as expenses of the General
Partner or General Partner Entity.

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

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

     E. Reimbursement not a Distribution. Except as set forth in the succeeding
sentence, if and to the extent any reimbursement made pursuant to this Section
7.4 is determined for federal income tax purposes not to constitute a payment
of expenses of the Partnership, the amount so determined shall constitute a
guaranteed payment with respect to capital within the meaning of Section 707(c)
of the Code, shall be treated consistently therewith by the Partnership and all
Partners and shall not be treated as a distribution for purposes of computing
the Partners’ Capital Accounts. Amounts deemed paid by the Partnership to the
General Partner in connection with redemption of Partnership Units pursuant to
clause (ii) of subparagraph (D) above shall be treated as a distribution for
purposes of computing the Partner’s Capital Accounts.

     F. Funding for Certain Capital Transactions. In the event that the General
Partner Entity shall undertake to acquire (whether by merger, consolidation,
purchase, or otherwise) the assets or equity interests of another Person and
such acquisition shall require the payment of cash by the General Partner
Entity (whether to such Person or to any other selling party or parties in such
transaction or to one or more creditors, if any, of such Person or such selling
party or parties), (i) the Partnership shall advance to the General Partner
Entity the cash required to consummate such acquisition if, and to the extent
that, such cash is not to be obtained by the General Partner Entity through an
issuance of Shares described in Section 4.2 or pursuant to a transaction
described in Section 7.5.B, (ii) the General Partner Entity shall, upon
consummation of such acquisition, transfer to the Partnership (or cause to be
transferred to the Partnership), in full and complete satisfaction of such
advance and as required by Section 7.5, the assets or equity interests of such
Person acquired by the General Partner Entity in such acquisition (or equity
interests in Persons owning all of such assets or equity interests), and (iii)
pursuant to and in accordance with Section 4.2 and Section 7.5.B, the
Partnership shall issue to the General Partner Partnership Interests and/or
rights, options, warrants or convertible or exchangeable securities of the
Partnership having designations, preferences and other rights that are
substantially the same as those of any additional Shares, other equity
securities, New Securities and/or Convertible

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Funding Debt, as the case may be, issued by the General Partner Entity in
connection with such acquisition (whether issued directly to participants in
the acquisition transaction or to third parties in order to obtain cash to
complete the acquisition). The Management Company Acquisition/Reorganization
shall be deemed as having occurred in compliance with Section 4.2.A and the
preceding sentence of this Section 7.4.A. In addition to, and without
limiting, the foregoing, in the event that the General Partner Entity engages
in a transaction in which (x) the General Partner Entity (or a wholly owned
direct or indirect Subsidiary of the General Partner Entity) merges with
another entity (referred to as the “Parent Entity”) that is organized in the
“UPREIT format” (i.e., where the Parent Entity holds substantially all of its
assets and conducts substantially all of its operations through a partnership,
limited liability company or other entity (referred to as an “Operating
Entity”)) and the General Partner Entity survives such merger, (y) such
Operating Entity merges with or is otherwise acquired by the Partnership in
exchange in whole or in part for Partnership Interests, and (z) the General
Partner Entity is required or elects to pay part of the consideration in
connection with such merger involving the Parent Entity in the form of cash and
part of the consideration in the form of Shares, the Partnership shall
distribute to the General Partner with respect to its existing Partnership
Interest an amount of cash sufficient to complete such transaction and the
General Partner shall cause the Partnership to cancel a number of Partnership
Units (rounded to the nearest whole number) held by the General Partner equal
to the product attained by multiplying the number of additional Shares of the
General Partner Entity that the General Partner Entity would have issued to the
Parent Entity or the owners of the Parent Entity in such transaction if the
entire consideration therefor were to have been paid in Shares by a fraction,
the numerator of which is one and the denominator of which is the Conversion
Factor. For purposes of this Section 7.4.F, (A) the term “Management Company
Acquisition/Reorganization” shall mean (I) the acquisition of the capital stock
of U-Store-It Mini Warehouse Co., an Ohio corporation (the “TRS Service
Company”), by the General Partner for cash in connection with, and using a
portion of the proceeds from, the initial public offering of the General
Partner, (II) the termination of the existing management agreements between the
TRS Service Company and the Partnership (or, as applicable, its subsidiaries),
(III) the replacement of such existing management agreements with new
management agreements between YSI Management LLC, a Delaware limited liability
company whose limited liability company interests are owned by the General
Partner (the “New Management Company”), and the Partnership (or, as applicable,
its subsidiaries), and new service agreements between the TRS Service Company
and the Partnership (or, as applicable, its subsidiaries), and (IV) the
transfer of the Reorganized Management Assets to the Partnership in exchange
for General Partner Partnership Interests, and (B) the term “Reorganized
Management Assets” shall mean the capital stock of the TRS Service Company and
the limited liability company interests of the New Management Company.

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

     A. General. Without the Consent of the Outside Limited Partners, the
General Partner shall not, directly or indirectly, enter into or conduct any
business other than in connection with the ownership, acquisition and
disposition of Partnership Interests as General Partner or Limited Partner and
the management of the business of the Partnership and such activities as are
incidental thereto. Without the Consent of the Outside Limited Partners, the

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assets of the General Partner shall be limited to Partnership Interests
and permitted debt obligations of the Partnership (as contemplated by Section
7.5.F), so that Shares and Partnership Units are completely fungible except as
otherwise specifically provided herein; provided that the General Partner shall
be permitted to hold such bank accounts or similar instruments or accounts in
its name as it deems necessary to carry out its responsibilities and purposes
as contemplated under this Agreement and its organizational documents (provided
that accounts held on behalf of the Partnership to permit the General Partner
to carry out its responsibilities under this Agreement shall be considered to
belong to the Partnership and the interest earned thereon shall, subject to
Section 7.4.B, be applied for the benefit of the Partnership); and, provided
further that, the General Partner shall be permitted to acquire Qualified
Assets.

     B. Repurchase of Shares and Other Securities. If the General Partner
Entity exercises its rights under the Declaration of Trust to purchase Shares
or otherwise elects to purchase from the holders thereof Shares, other equity
securities of the General Partner Entity, New Securities or Convertible Funding
Debt, then the General Partner shall cause the Partnership to purchase from the
General Partner (i) in the case of a purchase of Shares, that number of
Partnership Units of the appropriate class equal to the product obtained by
multiplying the number of Shares purchased by the General Partner Entity times
a fraction, the numerator of which is one and the denominator of which is the
Conversion Factor, or (ii) in the case of the purchase of any other securities
on the same terms and for the same aggregate price that the General Partner
Entity purchased such securities.

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

     D. Issuances of Shares and Other Securities. The General Partner shall not
grant, award, or issue any additional Shares (other than Shares issued pursuant
to Section 8.6 hereof or pursuant to a dividend or distribution (including any
share split) of Shares to all of its shareholders that results in an adjustment
to the Conversion Factor pursuant to clause (i), (ii) or (iii) of the
definition thereof), other equity securities of the General Partner, New
Securities or Convertible Funding Debt unless (i) the General Partner shall
cause, pursuant to Section 4.2.A hereof, the Partnership to issue to the
General Partner, Partnership Interests or rights, options, warrants or
convertible or exchangeable securities of the Partnership having designations,
preferences and other rights, all such that the economic interests are
substantially the same as those of such additional Shares, other equity
securities, New Securities or Convertible Funding Debt, as the case may be, and
(ii) the General Partner transfers to the Partnership, as an additional Capital
Contribution, the proceeds from the grant, award, or issuance of such
additional Shares, other equity securities, New Securities or Convertible
Funding Debt, as the case may be, or from the exercise of rights contained in
such additional Shares, other equity securities, New Securities or Convertible
Funding Debt, as the case may be (or, in the case of an acquisition described
in Section 7.4.F in which all or a portion of the cash required to consummate
such acquisition is to be obtained by the General Partner Entity through an
issuance of Shares described in Section 4.2, the General Partner complies with
such Section 7.4.F).

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Without limiting the foregoing, the General Partner is expressly
authorized to issue additional Shares, other equity securities, New Securities
or Convertible Funding Debt, as the case may be, for less than fair market
value, and the General Partner is expressly authorized, pursuant to Section
4.2.A hereof, to cause the Partnership to issue to the General Partner
corresponding Partnership Interests, (for example, and not by way of
limitation, the issuance of Shares and corresponding Partnership Units pursuant
to a share purchase plan providing for purchases of Shares, either by employees
or shareholders, at a discount from fair market value or pursuant to employee
share options that have an exercise price that is less than the fair market
value of the Shares, either at the time of issuance or at the time of exercise)
as long as (a) the General Partner concludes in good faith that such issuance
is in the interests of the General Partner and the Partnership and (b) the
General Partner transfers all proceeds from any such issuance or exercise to
the Partnership as an additional Capital Contribution.

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

     F. Funding Debt. The General Partner or the General Partner Entity or any
wholly owned Subsidiary of either of them may incur a Funding Debt, including,
without limitation, a Funding Debt that is convertible into Shares or otherwise
constitutes a class of New Securities (“Convertible Funding Debt”), subject to
the condition that the General Partner, the General Partner Entity or such
Subsidiary, as the case may be, lend to the Partnership the net proceeds of
such Funding Debt; provided that Convertible Funding Debt shall be issued in
accordance with the provisions of Section 7.5.D above; and, provided further
that the General Partner, the General Partner Entity or such Subsidiary shall
not be obligated to lend the net proceeds of any Funding Debt to the
Partnership in a manner that would be inconsistent with the General Partner’s
or General Partner Entity’s ability to remain qualified as a REIT. If the
General Partner, General Partner Entity or such Subsidiary enters into any
Funding Debt, the loan to the Partnership shall be on comparable terms and
conditions, including interest rate, repayment schedule, costs and expenses and
other financial terms, as are applicable with respect to or incurred in
connection with such Funding Debt.

     G. Capital Contributions of the General Partner. The Capital
Contributions by the General Partner pursuant to Sections 7.5.D and 7.5.E will
be deemed to equal the cash contributed by the General Partner plus (a) in the
case of cash contributions funded by an offering of any equity interests in or
other securities of the General Partner, the offering costs attributable to the
cash contributed to the Partnership, and (b) in the case of Partnership Units
issued pursuant to Section 7.5.E, an amount equal to the difference between the
Value of the Shares sold pursuant to any Share Option Plan and the net proceeds
of such sale.

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

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Section 7.6 Transactions With Affiliates

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

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

     C. Benefit Plans Sponsored by the Partnership. The General Partner in its
sole and absolute discretion and without the approval of the Limited Partners,
may propose and adopt on behalf of the Partnership employee benefit plans
funded by the Partnership for the benefit of employees of the General Partner,
the Partnership, Subsidiaries of the Partnership or any Affiliate of any of
them.

Section 7.7 Indemnification

     A. General. The Partnership shall indemnify each Indemnitee to the fullest
extent provided by the Act from and against any and all losses, claims,
damages, liabilities, joint or several, expenses (including, without
limitation, attorneys fees and other legal fees and expenses), judgments,
fines, settlements and other amounts arising from or in connection with any and
all claims, demands, actions, suits or proceedings, civil, criminal,
administrative or investigative, incurred by the Indemnitee and relating to the
Partnership or the General Partner or the General Partner Entity or the
operation of, or the ownership of property by, the Indemnitee, Partnership or
the General Partner or the General Partner Entity as set forth in this
Agreement in which any such Indemnitee may be involved, or is threatened to be
involved, as a party or otherwise, unless it is established by a final
determination of a court of competent jurisdiction that: (i) the act or
omission of the Indemnitee was material to the matter giving rise to the
proceeding and either was committed in bad faith or was the result of active
and deliberate dishonesty, (ii) the Indemnitee actually received an improper
personal benefit in money, property or services or (iii) in the case of any
criminal proceeding, the Indemnitee had reasonable cause to believe that the
act or omission was unlawful. Without limitation, the foregoing indemnity shall
extend to any liability of any Indemnitee, pursuant to a loan guarantee,
contractual obligation for any indebtedness or other obligation or otherwise,
for any indebtedness of the Partnership or any Subsidiary of the Partnership
(including, without limitation, any indebtedness which the Partnership or any
Subsidiary of the Partnership has assumed or taken subject to), and the General
Partner is hereby authorized and empowered, on behalf of the Partnership, to
enter into one or more indemnity agreements consistent with the provisions of
this Section 7.7 in favor of any Indemnitee having or potentially having
liability for any such indebtedness. The termination of any proceeding by
judgment, order or settlement does not create a presumption that the Indemnitee
did not meet the requisite standard of conduct set forth in this Section 7.7.A.
The

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termination of any proceeding by conviction or upon a plea of nolo
contendere or its equivalent, or an entry of an order of probation prior to
judgment, creates a rebuttable presumption that the Indemnitee acted in a
manner contrary to that specified in this Section 7.7.A with respect to the
subject matter of such proceeding. Any indemnification pursuant to this Section
7.7 shall be made only out of the assets of the Partnership, and any insurance
proceeds from the liability policy covering the General Partner and any
Indemnitee, and neither the General Partner nor any Limited Partner shall have
any obligation to contribute to the capital of the Partnership or otherwise
provide funds to enable the Partnership to fund its obligations under this
Section 7.7.

     B. Reimbursement of Expenses. Reasonable expenses expected to be incurred
by an Indemnitee shall be paid or reimbursed by the Partnership in advance of
the final disposition of any and all claims, demands, actions, suits or
proceedings, civil, criminal, administrative or investigative made or
threatened against an Indemnitee upon receipt by the Partnership of (i) a
written affirmation by the Indemnitee of the Indemnitee’s good faith belief
that the standard of conduct necessary for indemnification by the Partnership
as authorized in this Section 7.7.A has been met and (ii) a written undertaking
by or on behalf of the Indemnitee to repay the amount if it shall ultimately be
determined that the standard of conduct has not been met.

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

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

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

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

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

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respect to claims arising from or related to matters occurring, in whole
or in part, prior to such amendment, modification or repeal, regardless of when
such claims may arise or be asserted.

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

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

Section 7.8 Liability of the General Partner

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

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

     C. No Obligation to Consider Separate Interests of Limited Partners or
Shareholders. The Limited Partners expressly acknowledge that the General
Partner is acting on behalf of the Partnership and the shareholders of the
General Partner Entity, 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 Assignees) in deciding
whether to cause the Partnership to take (or decline to take) any actions, and
that the General Partner shall not be liable for monetary or other damages for
losses sustained, liabilities incurred or benefits not derived by Limited
Partners in connection with any decisions or actions made or taken or declined
to be made or taken, provided that the General Partner has acted pursuant to
its authority under this Agreement.

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

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

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

Section 7.9 Other Matters Concerning the General Partner

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

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

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

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

Section 7.10 Reliance By Third Parties

     Notwithstanding anything to the contrary in this Agreement, any Person
dealing with the Partnership shall be entitled to assume that the General
Partner has full power and authority,

37

 

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

Section 7.11 Restrictions on General Partner’s Authority

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

     B. Sale of All Assets of the Partnership. Except as provided in
Article XIII, the General Partner may not, directly or indirectly, cause the
Partnership to sell, exchange, transfer or otherwise dispose of all or
substantially all of the Partnership’s assets in a single transaction or a
series of related transactions (including by way of merger (including a
triangular
merger), consolidation or other combination with any other Persons)
without the Consent of the Partners holding Partnership Interests representing
more than fifty percent (50%) of the Percentage Interest of the Class A Units,
provided, however, that the foregoing limitation shall not apply to any leases
of all or substantially all of the Partnership’s assets entered into by the
Partnership in order to satisfy any REIT Requirements.

Section 7.12 Loans by Third Parties

     The Partnership may incur Debt, or enter into similar credit, guarantee,
financing or refinancing arrangements for any purpose (including, without
limitation, in connection with any acquisition of property and any borrowings
from, or guarantees of Debt of the General Partner or

38

 

any of its Affiliates)
with any Person upon such terms as the General Partner determines appropriate.

ARTICLE VIII

RIGHTS AND OBLIGATIONS OF LIMITED PARTNERS

Section 8.1 Limitation of Liability

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

Section 8.2 Management of Business

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

Section 8.3 Outside Activities of Limited Partners

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

39

 

Section 8.4 Return of Capital

     Except pursuant to the right of redemption set forth in Section 8.6, no
Limited Partner shall be entitled to the withdrawal or return of its Capital
Contribution, except to the extent of distributions made pursuant to this
Agreement or upon termination of the Partnership as provided herein. No Limited
Partner or Assignee shall have priority over any other Limited Partner or
Assignee either as to the return of Capital Contributions (except as permitted
by Section 4.2.A) or, except to the extent provided by Exhibit C or as
permitted by Sections 4.2.A, 5.1.B(i), 6.1.A and 6.1.B, or otherwise expressly
provided in this Agreement, as to profits, losses, distributions or credits.

Section 8.5 Rights of Limited Partners Relating to the Partnership

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

	 	(1)	 	to obtain a copy of the most recent annual and quarterly
reports filed with the Securities and Exchange Commission by either
the General Partner Entity or the Partnership, if any, pursuant to
the Exchange Act;
	 
	 	(2)	 	to obtain a copy of the Partnership’s federal, state and
local income tax returns for each Fiscal Year;
	 
	 	(3)	 	to obtain a current list of the name and last known business,
residence or mailing address of each Partner;
	 
	 	(4)	 	to obtain a copy of this Agreement and the Certificate of
Limited Partnership and all amendments thereto, together with
executed copies of all powers of attorney pursuant to which this
Agreement, the Certificate of Limited Partnership and all amendments
thereto have been executed;
	 
	 	(5)	 	to obtain true and full information regarding the amount of
cash and a description and statement of the agreed value of any
other property or services contributed by each Partner and which
each Partner has agreed to contribute in the future, and the date on
which each Partner became a Partner; and
	 
	 	(6)	 	other information regarding the affairs of the Partnership as
is just and reasonable.

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

     C. Notice of Extraordinary Transaction of the General Partner
Entity. The General Partner Entity shall not make any extraordinary
distributions of cash or property to its

40

 

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

     D. Confidentiality. Notwithstanding any other provision of this
Section 8.5, the General Partner may keep confidential from the Limited
Partners, for such period of time as the General Partner determines in its sole
and absolute discretion, any information that (i) the
General Partner reasonably believes to be in the nature of trade secrets
or other information the disclosure of which the General Partner in good faith
believes is not in the best interests of the Partnership or could damage the
Partnership or its business or (ii) the Partnership is required by law or by
agreements with unaffiliated third parties to keep confidential, provided that
this Section 8.5.D shall not affect the notice requirements set forth in
Section 8.5.C above.

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Section 8.6 Redemption Right

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

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

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

          (iv) If the General Partner Entity provides notice to the Limited
Partners, pursuant to Section 8.5.C hereof, the Redemption Right shall be
exercisable, without regard to whether the Partnership Units have been
outstanding for any specified period, during the period commencing on the date
on which the General Partner Entity provides such notice and ending on the
record date to determine shareholders eligible to receive such distribution or
to vote upon the approval of such merger, sale or other extraordinary
transaction (or, if no such record date is

42

 

applicable, at least twenty (20)
Business Days before the consummation of such merger, sale or other
extraordinary transaction). If this subparagraph (iv) applies, the Specified
Redemption Date is the date on which the Partnership and the General Partner
receive notice of exercise of the Redemption Right, rather than ten (10)
Business Days after receipt of the notice of redemption.

     B. General Partner Assumption of Right. (i) If a Limited Partner
has delivered a Notice of Redemption, the General Partner Entity may, in its
sole and absolute discretion (subject to the limitations on ownership and
transfer of Shares set forth in the Declaration of Trust), elect to assume
directly and satisfy a Redemption Right. If such election is made by the
General Partner Entity, the Partnership shall determine whether the General
Partner Entity shall pay the Redemption Amount in the form of the Cash Amount
or the Shares Amount. The Partnership’s decision regarding whether such
payment shall be made in the form of the Cash Amount or the Shares Amount shall
be made by the General Partner, in its capacity as the general partner of the
Partnership and in its sole and absolute discretion. Payment of the Redemption
Amount in the form of Shares shall be in Shares registered for resale under
Section 12 of the Exchange Act and listed for trading on the exchange or
national market on which the Shares are Publicly Traded and the issuance of
Shares upon redemption shall be registered under the Securities Act or, at the
election of the General Partner Entity resale of the Shares issued upon
redemption shall be registered (so long as the Redeeming Partner provides all
information required for such registration), and, provided further that, if the
Shares are not Publicly Traded at the time a Redeeming Partner exercises its
Redemption Right, the Redemption Amount shall be paid only in the form of the
Cash Amount unless the Redeeming Partner, in its sole and absolute discretion,
consents to payment of the Redemption Amount in the form of the Shares Amount),
on the Specified Redemption Date, upon such payment the General Partner Entity
shall acquire the Partnership Units offered for redemption by the Redeeming
Partner and shall be treated for all purposes of this Agreement as the owner of
such Partnership Units. Unless the General Partner Entity, in its sole and
absolute discretion, shall exercise its right to assume directly and satisfy
the Redemption Right, the General Partner Entity shall not have any obligation
to the Redeeming Partner or to the Partnership with respect to the Redeeming
Partner’s exercise of the Redemption Right. If the General Partner Entity shall
exercise its right to assume directly and satisfy the Redemption Right in the
manner described in the first sentence of this Section 8.6B and shall fully
perform its obligations in connection therewith, the Partnership shall have no
right or obligation to pay any amount to the Redeeming Partner with respect to
such Redeeming Partner’s exercise of the Redemption Right, and each of the
Redeeming Partner, the Partnership and the General Partner Entity shall, for
federal income tax purposes, treat the transaction between the General Partner
Entity and the Redeeming Partner as a sale of the Redeeming Partner’s
Partnership Units to the General Partner Entity. Nothing contained in this
Section 8.6.B shall imply any right of the General Partner Entity to require
any Limited Partner to exercise the Redemption Right afforded to such Limited
Partner pursuant to Section 8.6.A.

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

43

 

reasonable discretion, to represent the fair value of the remaining fractional
Share which would otherwise be payable to the Redeeming Partner.

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

     C. Exceptions to Exercise of Redemption Right. Notwithstanding the
provisions of Sections 8.6.A and 8.6.B, a Partner shall not be entitled to
exercise the Redemption Right pursuant to Section 8.6.A if (but only as long
as) the delivery of Shares to such Partner on the Specified Redemption Date
would be (i) prohibited under the restrictions on the ownership or transfer of
Shares in the Declaration of Trust (or, if the General Partner is not the
General Partner Entity, the organizational documents of the General Partner
Entity) or (ii) prohibited under applicable federal or state securities laws or
regulations (in each case regardless of whether the General Partner Entity
would in fact assume and satisfy the Redemption Right).

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

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

ARTICLE IX

BOOKS, RECORDS, ACCOUNTING AND REPORTS

Section 9.1 Records and Accounting

     The General Partner shall keep or cause to be kept at the principal office
of the Partnership appropriate books and records with respect to the
Partnership’s business, including,

44

 

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

Section 9.2 Fiscal Year

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

Section 9.3 Reports

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

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

ARTICLE X

TAX MATTERS

Section 10.1 Preparation of Tax Returns

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

45

 

Section 10.2 Tax Elections

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

Section 10.3 Tax Matters Partner

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

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

	 	(1)	 	to enter into any settlement with the IRS with respect to any
administrative or judicial proceedings for the adjustment of
Partnership items required to be taken into account by a Partner for
income tax purposes (such administrative proceedings being referred
to as a “tax audit” and such judicial proceedings being referred to
as “judicial review”), and in the settlement agreement the tax
matters partner may expressly state that such agreement shall bind
all Partners, except that such settlement agreement shall not bind
any Partner (i) who (within the time prescribed pursuant to the Code
and Regulations) files a statement with the IRS providing that the
tax matters partner shall not have the authority to enter into a
settlement agreement on behalf of such Partner or (ii) who is a
“notice partner” (as defined in Section 6231(a)(8) of the Code) or a
member of a “notice group” (as defined in Section 6223(b)(2) of the
Code);
	 
	 	(2)	 	if a notice of a final administrative adjustment at the
Partnership level of any item required to be taken into account by a
Partner for tax purposes (a “final adjustment”) is mailed to the tax
matters partner, to seek judicial review of such
final adjustment, including the filing of a petition for
readjustment with the Tax Court or the filing of a complaint for
refund with the United States Claims Court or the District Court of
the United States for the district in which the Partnership’s
principal place of business is located;
	 
	 	(3)	 	to intervene in any action brought by any other Partner for
judicial review of a final adjustment;
	 
	 	(4)	 	to file a request for an administrative adjustment with the
IRS at any time and, if any part of such request is not allowed by
the IRS, to file an appropriate pleading (petition or complaint) for
judicial review with respect to such request;

46

 

	 	(5)	 	to enter into an agreement with the IRS to extend the period
for assessing any tax which is attributable to any item required to
be taken into account by a Partner for tax purposes, or an item
affected by such item; and
	 
	 	(6)	 	to take any other action on behalf of the Partners of the
Partnership in connection with any tax audit or judicial review
proceeding to the extent permitted by applicable law or regulations.

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

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

Section 10.4 Organizational Expenses

     The Partnership shall elect to deduct expenses, if any, incurred by it in
organizing the Partnership ratably over a sixty (60) month period as provided
in Section 709 of the Code.

Section 10.5 Withholding

     Each Limited Partner hereby authorizes the Partnership to withhold from or
pay on behalf of or with respect to such Limited Partner any amount of federal,
state, local, or foreign taxes that the General Partner determines that the
Partnership is required to withhold or pay with respect to any amount
distributable or allocable to such Limited Partner pursuant to this Agreement,
including, without limitation, any taxes required to be withheld or paid by the
Partnership pursuant to Section 1441, 1442, 1445, or 1446 of the Code. Any
amount paid on behalf of or with respect to a Limited Partner shall constitute
a loan by the Partnership to such
Limited Partner, which loan shall be repaid by such Limited Partner within
fifteen (15) days after notice from the General Partner that such payment must
be made unless (i) the Partnership withholds such payment from a distribution
which would otherwise be made to the Limited Partner or (ii) the General
Partner determines, in its sole and absolute discretion, that such payment may
be satisfied out of the available funds of the Partnership which would, but for
such payment, be distributed to the Limited Partner. Any amounts withheld
pursuant to the foregoing clauses (i) or (ii) shall be treated as having been
distributed to such Limited Partner. Each Limited Partner hereby
unconditionally and irrevocably grants to the Partnership a security interest
in such Limited Partner’s Partnership Interest to secure such Limited Partner’s
obligation to pay to the Partnership any amounts required to be paid pursuant
to this Section 10.5. If a Limited Partner fails to pay any amounts owed to the
Partnership pursuant to this Section 10.5 when due, the General Partner may, in
its sole and absolute discretion, elect to make the payment

47

 

to the Partnership
on behalf of such defaulting Limited Partner, and in such event shall be deemed
to have loaned such amount to such defaulting Limited Partner and shall succeed
to all rights and remedies of the Partnership as against such defaulting
Limited Partner (including, without limitation, the right to receive
distributions). Any amounts payable by a Limited Partner hereunder shall bear
interest at the base rate on corporate loans at large United States money
center commercial banks, as published from time to time in The Wall Street
Journal, plus four (4) percentage points (but not higher than the maximum
lawful rate that may be charged under the law) from the date such amount is due
(i.e., fifteen (15) days after demand) until such amount is paid in full. Each
Limited Partner shall take such actions as the Partnership or the General
Partner shall request to perfect or enforce the security interest created
hereunder.

ARTICLE XI

TRANSFERS AND WITHDRAWALS

Section 11.1 Transfer

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

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

Section 11.2 Transfers of Partnership Interests of General Partner

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

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     B. Specific Transactions Prohibited. The General Partner Entity
shall not engage in any merger (including a triangular merger), consolidation
or other combination with or into another Person (other than any transaction
permitted by Section 11.2.A), sale of all or substantially all of its assets or
any reclassification, recapitalization or change of outstanding Shares (other
than a change in par value, or from par value to no par value, or as a result
of a subdivision or combination as described in the definition of “Conversion
Factor”) (“Termination Transaction”), unless (i) the Termination Transaction
has been approved by the Consent of Partners holding Partnership Interests
representing more than fifty percent (50%) of the Percentage Interest of the
Class A Units, (ii) following such merger or other consolidation, substantially
all of the assets of the surviving entity consist of Partnership Units and
(iii) in connection with which all Partners either will receive, or will have
the right to receive, for each Unit an amount of cash, securities, or other
property equal to the product of the Conversion Factor and the greatest amount
of cash, securities or other property paid to a holder of Shares, if any,
corresponding to such Unit in consideration of one such Share at any time
during the period from and after the date on which the Termination Transaction
is consummated; provided that, if, in connection with the Termination
Transaction, a purchase, tender or exchange offer shall have been made to and
accepted by the holders of the percentage required for the approval of mergers
under the charter documents of the General Partner Entity, each holder of
Partnership Units shall receive, or shall have the right to receive without any
right of Consent set forth above in this subsection B, the greatest amount of
cash, securities, or other property which such holder would have received had
it exercised the Redemption Right and received Shares in exchange for its
Partnership Units immediately prior to the expiration of such purchase, tender
or exchange offer and had thereupon accepted such purchase, tender or exchange
offer. The General Partner shall not enter into an agreement or other
arrangement providing for or facilitating the creation of a General Partner
Entity other than the General Partner, unless the successor General Partner
Entity executes and delivers a counterpart to this Agreement in which such
General Partner Entity agrees to be fully bound by all of the terms and
conditions contained herein that are applicable to a General Partner Entity.

Section 11.3 Limited Partners’ Rights to Transfer

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

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

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

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

     E. No Transfers Affecting Tax Status of Partnership. No transfer of
Partnership Units by a Limited Partner (including a redemption or exchange
pursuant to Section 8.6) may be made to any Person if (i) in the opinion of
legal counsel for the Partnership, there is a significant risk that it would
result in the Partnership being treated as an association taxable as a
corporation for federal income tax purposes or would result in a termination of
the Partnership for federal income tax purposes (except as a result of the
redemption or exchange for Shares of all Partnership Units held by all Limited
Partners other than the General Partner or the General Partner Entity or any
Subsidiary of the General Partner or the General Partner Entity or pursuant to
a transaction expressly permitted under Section 7.11.B or Section 11.2), (ii)
in the opinion of legal counsel for the Partnership, there is a significant
risk that it would adversely affect the

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ability of the General Partner Entity
to continue to qualify as a REIT or would subject the General Partner Entity 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 (provided that this clause (iii) shall not be the
basis for limiting or restricting in any manner the exercise of the Redemption
Right under Section 8.6 unless, and only to the extent that, outside tax
counsel provides to the General Partner an opinion to the effect that, in the
absence of such limitation or restriction, there is a significant risk that the
Partnership will be treated as a “publicly traded partnership” and, by reason
thereof, taxable as a corporation).

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

Section 11.4 Substituted Limited Partners

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

     B. Rights of Substituted Partner. A transferee who has been
admitted as a Substituted Limited Partner in accordance with this Article XI
shall have all the rights and powers and be subject to all the restrictions and
liabilities of a Limited Partner under this Agreement. The admission of any
transferee as a Substituted Limited Partner shall be conditioned upon the
transferee executing and delivering to the Partnership an acceptance of all the
terms and conditions of this Agreement (including, without limitation, the
provisions of Section 15.11) and such other documents or instruments as may be
required to effect the admission.

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

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Section 11.5 Assignees

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

Section 11.6 General Provisions

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

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

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

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

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the case may be, and, in the case of a transfer or
assignment other than a redemption, all distributions of Available Cash
thereafter attributable to such Partnership Unit shall be made to the
transferee Partner.

     E. Additional Restrictions. In addition to any other restrictions
on transfer herein contained, including without limitation the provisions of
this Article XI and Article VII, in no event may any transfer or assignment of
a Partnership Interest by any Partner (including pursuant to Section 8.6) be
made without the express consent of the General Partner, in its sole and
absolute discretion, (i) to any person or entity who lacks the legal right,
power or capacity to own a Partnership Interest; (ii) in violation of
applicable law; (iii) of any component portion of a Partnership Interest, such
as the Capital Account, or rights to distributions, separate and apart from all
other components of a Partnership Interest; (iv) if in the opinion of legal
counsel to the Partnership there is a significant risk that such transfer would
cause a termination of the Partnership for federal or state income tax purposes
(except as a result of the redemption or exchange for Shares of all Partnership
Units held by all Limited Partners other than the General Partner, the General
Partner Entity, or any Subsidiary of either, or pursuant to a transaction
expressly permitted under Section 7.11.B or Section 11.2); (v) if in the
opinion of counsel to the Partnership, there is a significant risk that such
transfer would cause the Partnership to cease to be classified as a partnership
for federal income tax purposes (except as a result of the redemption or
exchange for Shares of all Units held by all Limited Partners other than the
General Partner, the General Partner Entity, or any Subsidiary of either, or
pursuant to a transaction expressly permitted under Section 7.11.B or Section
11.2); (vi) if such transfer requires the registration of such Partnership
Interest pursuant to any applicable federal or state securities laws; (vii) if
such transfer is effectuated through an “established securities market” or a
“secondary market (or the substantial equivalent thereof)” within the meaning
of Section 7704 of the Code or such transfer causes the Partnership to become a
“publicly traded partnership,” as such term is defined in Section 469(k)(2) or
Section 7704(b) of the Code (provided that, this clause (vii) shall not be the
basis for limiting or restricting in any manner the exercise of the Redemption
Right under Section 8.6 unless, and only to the extent that, outside tax
counsel provides to the General Partner an opinion to the effect that, in the
absence of such limitation or restriction, there is a significant risk that the
Partnership will be treated as a “publicly traded partnership” and, by reason
thereof, taxable as a corporation); (viii) if such transfer subjects the
Partnership or the activities of the Partnership to regulation under the
Investment Company Act of 1940, the Investment Advisors Act of 1940 or ERISA,
each as amended; (ix) if such transfer
could adversely affect the ability of the General Partner Entity to fail
to remain qualified as a REIT; or (x) if in the opinion of legal counsel for
the transferring Partner (which opinion and counsel shall be reasonably
satisfactory to the Partnership) or legal counsel for the Partnership, there is
a significant risk that such transfer would cause the General Partner Entity to
fail to continue to qualify as a REIT or subject the General Partner Entity to
any additional taxes under Section 857 or Section 4981 of the Code.

     F. Avoidance of “Publicly Traded Partnership” Status. The General
Partner shall monitor the transfers of interests in the Partnership to
determine (i) if such interests are being traded on an “established securities
market” or a “secondary market (or the substantial equivalent thereof)” within
the meaning of Section 7704 of the Code and (ii) whether additional transfers
of interests would result in the Partnership being unable to qualify for at
least one of the “safe harbors” set forth in Regulations Section 1.7704-1 (or
such other guidance subsequently

53

 

published by the IRS setting forth safe
harbors under which interests will not be treated as “readily tradable on a
secondary market (or the substantial equivalent thereof)” within the meaning of
Section 7704 of the Code) (the “Safe Harbors”). The General Partner shall take
all steps reasonably necessary or appropriate to prevent any trading of
interests or any recognition by the Partnership of transfers made on such
markets and, except as otherwise provided herein, to insure that at least one
of the Safe Harbors is met; provided, however, that the foregoing shall not
authorize the General Partner to limit or restrict in any manner the right of
any holder of a Partnership Unit to exercise the Redemption Right in accordance
with the terms of Section 8.6 unless, and only to the extent that, outside tax
counsel provides to the General Partner an opinion to the effect that, in the
absence of such limitation or restriction, there is a significant risk that the
Partnership will be treated as a “publicly traded partnership” and, by reason
thereof, taxable as a corporation.

ARTICLE XII

ADMISSION OF PARTNERS

Section 12.1 Admission of a Successor General Partner

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

Section 12.2 Admission of Additional Limited Partners

     A. General. No Person shall be admitted as an Additional Limited
Partner without the consent of the General Partner, which consent shall be
given or withheld in the General Partner’s sole and absolute discretion. A
Person who makes a Capital Contribution to the Partnership in accordance with
this Agreement or who exercises an option to receive Partnership Units shall be
admitted to the Partnership as an Additional Limited Partner only with
the consent of the General Partner and only upon furnishing to the General
Partner (i) evidence of acceptance in form satisfactory to the General Partner
of all of the terms and conditions of this Agreement, including, without
limitation, the power of attorney granted in Section 15.11 and (ii) such other
documents or instruments as may be required in the discretion of the General
Partner to effect such Person’s admission as an Additional Limited Partner. The
admission of any Person as an Additional Limited Partner shall become effective
on the date upon which the name of such Person is recorded on the books and
records of the Partnership, following the consent of the General Partner to
such admission.

     B. Allocations to Additional Limited Partners. If any Additional
Limited Partner is admitted to the Partnership on any day other than the first
day of a Fiscal Year, then Net Income, Net Losses, each item thereof and all
other items allocable among Partners and Assignees for such Fiscal Year shall
be allocated among such Additional Limited Partner and all other Partners

54

 

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

Section 12.3 Amendment of Agreement and Certificate of Limited Partnership

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

ARTICLE XIII

DISSOLUTION AND LIQUIDATION

Section 13.1 Dissolution

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

	 	(i)	 	an event of withdrawal of the General Partner (other than an
event of bankruptcy), unless within ninety (90) days after the
withdrawal, the written Consent of the Outside Limited Partners to
continue the business of the Partnership and to the appointment,
effective as of the date of withdrawal, of a substitute General
Partner is obtained;
	 
	 	(ii)	 	through December 31, 2054, an election to dissolve the
Partnership made by the General Partner with the Consent of Partners
holding Partnership Interests representing ninety percent (90%) of
the Percentage Interest of the Class A Units;
	 
	 	(iii)	 	an election to dissolve the Partnership made by the General
Partner, in its sole and absolute discretion after December 31,
2054;

55

 

	 	(iv)	 	entry of a decree of judicial dissolution of the Partnership
pursuant to the provisions of the Act;
	 
	 	(v)	 	the sale of all or substantially all of the assets and
properties of the Partnership for cash or for marketable securities;
or
	 
	 	(vi)	 	a final and non-appealable judgment is entered by a court of
competent jurisdiction ruling that the General Partner is bankrupt
or insolvent, or a final and non-appealable order for relief is
entered by a court with appropriate jurisdiction against the General
Partner, in each case under any federal or state bankruptcy or
insolvency laws as now or hereafter in effect, unless prior to or at
the time of the entry of such order or judgment, the written Consent
of the Outside Limited Partners is obtained to continue the
business of the Partnership and to the appointment, effective as of
a date prior to the date of such order or judgment, of a substitute
General Partner.

Section 13.2 Winding Up

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

	 	(1)	 	First, to the payment and discharge of all of the Partnership’s debts and liabilities to creditors other than the Partners;
	 
	 	(2)	 	Second, to the payment and discharge of all of the Partnership’s debts and liabilities to the General Partner;
	 
	 	(3)	 	Third, to the payment and discharge of all of the Partnership’s debts and liabilities to the Limited Partners;
	 
	 	(4)	 	Fourth, to the holders of Partnership Interests that are entitled to any preference in distribution upon liquidation in accordance with the rights of any such class or series of Partnership Interests (and, within each such class or series, to each holder thereof pro rata based on its Percentage Interest in such class); and

56

 

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

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

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

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

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

     B. Restoration of Deficit Capital Accounts Upon Liquidation of the
Partnership. If any Partner has a deficit balance in its Capital Account
(after giving effect to all contributions, distributions and allocations for
all taxable years, including the year during which such

57

 

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

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

58

 

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

Section 13.4 Rights of Limited Partners

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

Section 13.5 Notice of Dissolution

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

Section 13.6 Cancellation of Certificate of Limited Partnership

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

Section 13.7 Reasonable Time for Winding Up

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

59

 

Section 13.8 Waiver of Partition

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

Section 13.9 Liability Of Liquidator

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

ARTICLE XIV

AMENDMENT OF PARTNERSHIP AGREEMENT; MEETINGS

Section 14.1 Amendments

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

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

	(1)	 	to add to the obligations of the General Partner or surrender
any right or power granted to the General Partner or any Affiliate
of the General Partner for the benefit of the Limited Partners;
	 
	(2)	 	to reflect the admission, substitution, termination, or
withdrawal of Partners in accordance with this Agreement (which may
be affected through the replacement of the Partner Registry with an
amended Partner Registry);
	 
	(3)	 	to set forth the designations, rights, powers, duties, and
preferences of the holders of any additional Partnership Interests
issued pursuant to Article IV;

60

 

	(4)	 	to reflect a change that does not adversely affect the
Limited Partners in any material respect, or to cure any ambiguity,
correct or supplement any provision in this Agreement not
inconsistent with law or with other provisions of this Agreement, or
make other changes with respect to matters arising under this
Agreement that will not be inconsistent with law or with the
provisions of this Agreement; and
	 
	(5)	 	to satisfy any requirements, conditions, or guidelines
contained in any order, directive, opinion, ruling or regulation of
a federal, state or local agency or contained in federal, state or
local law.

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

     C. Amendments Requiring Limited Partner Approval (Excluding the General
Partner). Notwithstanding Section 14.1.A, without the Consent of the
Outside Limited Partners, the General Partner shall not amend Section 4.2.A,
Section 7.1.A (second sentence only), Section 7.5, Section 7.6, Section 7.8,
Section 7.11.B, Section 11.2, Section 13.1 (other than Section 13.1(ii) which
can be amended only with a Consent of Partners holding Partnership Interests
representing 90% or more of the Percentage Interest of the Class A Units
(including Partnership Units held by the General Partner)), the last sentence
of Section 11.4.A (provided that no such amendment shall in any event adversely
affect the rights of any lender who made a loan or who extended credit and
received in connection therewith a pledge of Partnership Units prior to the
date such amendment is adopted unless, and only to the extent such lender
consents thereto), this Section 14.1.C or Section 14.2.

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

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

61

 

Section 14.2 Meetings of the Partners

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

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

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

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

ARTICLE XV

GENERAL PROVISIONS

Section 15.1 Addresses and Notice

     Any notice, demand, request or report required or permitted to be given or
made to a Partner or Assignee under this Agreement shall be in writing and
shall be deemed given or made when delivered in person or when sent by first
class United States mail or by other means of

62

 

written communication to the
Partner or Assignee at the address set forth in the Partner Registry or such
other address as the Partners shall notify the General Partner in writing.

Section 15.2 Titles and Captions

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

Section 15.3 Pronouns And Plurals

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

Section 15.4 Further Action

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

Section 15.5 Binding Effect

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

Section 15.6 Creditors

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

Section 15.7 Waiver

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

Section 15.8 Counterparts

     This Agreement may be executed in counterparts, all of which together
shall constitute one agreement binding on all the parties hereto,
notwithstanding that all such parties are not

63

 

signatories to the original or
the same counterpart. Each party shall become bound by this Agreement
immediately upon affixing its signature hereto.

Section 15.9 Applicable Law

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

Section 15.10 Invalidity Of Provisions

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

Section 15.11 Power Of Attorney

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

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

64

 

	 	 	give, confirm
or ratify any vote, consent, approval, agreement or other action
which is made or given by the Partners hereunder or is consistent
with the terms of this Agreement or appropriate or necessary, in the
sole and absolute discretion of the General Partner or any
Liquidator, to effectuate the terms or intent of this Agreement.

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

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

Section 15.12 Entire Agreement

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

Section 15.13 No Rights As Shareholders

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

Section 15.14 Limitation To Preserve REIT Status

     To the extent that any amount paid or credited to the General Partner or
any of its officers, trustees, employees or agents pursuant to Section 7.4 or
Section 7.7 would constitute

65

 

gross income to the General Partner for purposes
of Section 856(c)(2) or 856(c)(3) of the Code (a “General Partner Payment”)
then, notwithstanding any other provision of this Agreement, the amount of such
General Partner Payment for any fiscal year shall not exceed the lesser of:

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

      (ii) an amount equal to the excess, if any of (a) 24% of the General
Partner’s total gross income (but not including the amount of any General
Partner Payments) for the fiscal year which is described in subsections (A)
through (I) of Section 856(c)(3) of the Code over (b) the amount of gross
income (within the meaning of Section 856(c)(3) of the Code but not including
the amount of any General Partner Payments) derived by the General Partner from
sources other than those described in subsections (A) through (I) of Section
856(c)(3) of the Code; provided, however, that General Partner Payments in
excess of the amounts set forth in subparagraphs (i) and (ii) above may be made
if the General Partner, as a condition precedent, obtains an opinion of tax
counsel that the receipt of such excess amounts would not adversely affect the
General Partner’s ability to qualify as a REIT. To the extent General Partner
Payments may not be made in a year due to the foregoing limitations, such
General Partner Payments shall carry over and be treated as arising in the
following year, provided, however, that such amounts shall not carry over for
more than five years, and if not paid within such five year period, shall
expire; provided further, that (i) as General Partner Payments are made, such
payments shall be applied first to carry over amounts outstanding, if any, and
(ii) with respect to carry over amounts for more than one Fiscal Year, such
payments shall be applied to the earliest Fiscal Year first.

66

 

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

	 	 	 	 	 
	 	 	GENERAL PARTNER:
	 
	 	 	 	 
	 	 	U-STORE-IT TRUST
	 
	 	 	 	 
	

	 	By:	 	 
	

	 	 	 	

	 
	 	 	 	 
	

	 	Name:	 	 
	

	 	 	 	

	 
	 	 	 	 
	

	 	Title:	 	 
	

	 	 	 	

	 
	 	 	 	 
	 	 	LIMITED PARTNERS:
	 
	 	 	 	 
	

	 	By:
	 	U-Store-It Trust,
	

	 	 	 	as Attorney-in-Fact for the
	

	 	 	 	Limited Partners
	 
	 	 	 	 
	

	 	By:	 	 
	

	 	 	 	

	 
	 	 	 	 
	

	 	Name:	 	 
	

	 	 	 	

	 
	 	 	 	 
	

	 	Title:	 	 
	

	 	 	 	

	 
	 	 	 	 
	 	 	For purposes of Section 8.6 hereof:
	 
	 	 	 	 
	 	 	U-STORE-IT TRUST
	 
	 	 	 	 
	

	 	By:	 	 
	

	 	 	 	

	 
	 	 	 	 
	

	 	Name:	 	 
	

	 	 	 	

	 
	 	 	 	 
	

	 	Title:	 	 
	

	 	 	 	

67

 

EXHIBIT A

FORM OF PARTNER REGISTRY

	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	CLASS A AND CLASS B UNITS

	 	 	 	 	 	 	Initial	 	 
	 	 	Partnership	 	Capital	 	Percentage
	Name And Address Of Partner
	 	Units
	 	Account
	 	Interest (1)

	GENERAL PARTNER:
	 	 	 	 	 	 	 	 	 	 	 	 
	U-Store-It Trust
	 	 	 	 	 	 	 	 	 	 	 	 
	 
	LIMITED PARTNERS:
	 	 	 	 	 	 	 	 	 	 	 	 
	 
	TOTAL CLASS A AND CLASS B
UNITS
	 	 	 	 	 	 	 	 	 	 	100.00000	%

NOTES:

(1) For purposes of this calculation, the Class A Units and Class B Units are treated as one class.

A-1

 

EXHIBIT B

CAPITAL ACCOUNT MAINTENANCE

1. Capital Accounts of the Partners

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

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

          (1) Except as otherwise provided in Regulations Section
1.704-1(b)(2)(iv)(m), the computation of all items of income, gain, loss and
deduction shall be made without regard to any election under Section 754 of the
Code which may be made by the Partnership, provided that the amounts of any
adjustments to the adjusted bases of the assets of the Partnership made
pursuant to Section 734 of the Code as a result of the distribution of property
by the Partnership to a Partner (to the extent that such adjustments have not
previously been reflected in the Partners’ Capital Accounts) shall be reflected
in the Capital Accounts of the Partners in the manner and subject to the
limitations prescribed in Regulations Section l.704-1(b)(2)(iv)(m)(4).

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

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

B-1

 

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

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

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

     C. A transferee (including any Assignee) of a Partnership Unit shall
succeed to a pro rata portion of the Capital Account of the transferor.

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

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

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

          (4) In determining Unrealized Gain or Unrealized Loss for purposes of this
Exhibit B, the aggregate cash amount and fair market value of all Partnership
assets (including cash or cash equivalents) shall be determined by the General
Partner using such reasonable method of valuation as it may adopt, or in the
case of a liquidating distribution pursuant to Article XIII of the Agreement,
shall be determined and allocated by the Liquidator using such reasonable
methods of valuation as it may adopt. The General Partner, or the Liquidator,
as the case may be, shall allocate such aggregate fair market value among the
assets of the Partnership in such manner as it determines in its sole and
absolute discretion to arrive at a fair market value for individual properties.

     E. The provisions of the Agreement (including this Exhibit B and the other
Exhibits to the Agreement) relating to the maintenance of Capital Accounts are
intended to comply with

B-2

 

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

2. No Interest

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

3. No Withdrawal

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

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EXHIBIT C

SPECIAL ALLOCATION RULES

1. Special Allocation Rules.

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

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

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

     C. Qualified Income Offset. In the event any Partner unexpectedly receives
any adjustments, allocations or distributions described in Regulations Sections
1.704-l(b)(2)(ii)(d)(4), l.704-1(b)(2)(ii)(d)(5), or 1.704-l(b)(2)(ii)(d)(6),
and after giving effect to the allocations required under Sections 1.A and 1.B
hereof with respect to such Fiscal Year, such Partner has an Adjusted Capital Account Deficit, items of Partnership income and gain
(consisting of a pro rata portion of each item of Partnership income, including
gross income and gain for the Fiscal Year)

C-1

 

shall be specifically allocated to
such Partner in an amount and manner sufficient to eliminate, to the extent
required by the Regulations, its Adjusted Capital Account Deficit created by
such adjustments, allocations or distributions as quickly as possible. This
Section 1.C is intended to constitute a “qualified income offset” under
Regulations Section 1.704-1(b)(2)(ii)(d) and shall be interpreted consistently
therewith.

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

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

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

     G. Code Section 754 Adjustments. To the extent an adjustment to the
adjusted tax basis of any Partnership asset pursuant to Section 734(b) or
743(b) of the Code is required, pursuant to Regulations Section
1.704-l(b)(2)(iv)(m), to be taken into account in determining Capital Accounts,
the amount of such adjustment to the Capital Accounts shall be treated as an
item of gain (if the adjustment increases the basis of the asset) or loss (if
the adjustment decreases such basis), and such item of gain or loss shall be
specially allocated to the Partners in a manner consistent with the manner in
which their Capital Accounts are required to be adjusted pursuant to such
Section of the Regulations.

2. Allocations for Tax Purposes

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

C-2

 

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

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

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

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

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

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

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

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

     C. To the extent Regulations promulgated pursuant to Section 704(c) of the
Code permit a Partnership to utilize alternative methods to eliminate the
disparities between the Carrying Value of property and its adjusted basis, the
General Partner shall, subject to any agreements between the Partnership and a
Partner, have the authority to elect the method to be used by the Partnership
and such election shall be binding on all Partners.

C-3

 

EXHIBIT D

NOTICE OF REDEMPTION

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

	 	 	 
	Dated:                                                          

	 	Name of Limited Partner:
	 
	 	 
	

	 	                                                                            
	

	 	(Signature of Limited Partner)
	 
	 	 
	

	 	                                                                            
	

	 	(Street Address)
	 
	 	 
	

	 	                                                                            
	

	 	(City)                  (State)                (Zip Code)
	 
	 	 
	

	 	Signature Guaranteed by:
	 
	 	 
	

	 	                                                                            

IF SHARES ARE TO BE ISSUED, ISSUE TO:

Name:                                                                             

Social Security or tax
identifying number:                                                                                                                   

D-1

 

EXHIBIT E

FORM OF DRO REGISTRY

	 	 	 
	PART I DRO PARTNERS

	 	DRO AMOUNT
	 
	 	 
	PART II DRO PARTNERS
	 	 

D-1

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