Document:

EX-10.4

 

Exhibit 10.4

FORM OF ADVISORY AGREEMENT

     THIS ADVISORY AGREEMENT, dated as of [ ], 2007, is among CORPORATE PROPERTY
ASSOCIATES 17 — GLOBAL INCORPORATED, a Maryland corporation (“CPA: 17”), CPA: 17 LIMITED
PARTNERSHIP, a Delaware limited partnership of which CPA: 17 is a general partner (the
“Operating Partnership”), and CAREY ASSET MANAGEMENT CORP., a Delaware corporation and
wholly-owned subsidiary of W. P. Carey & Co. LLC (the “Advisor”).

WITNESSETH:

     WHEREAS, CPA: 17 intends to qualify as a REIT (as defined below), and the Operating
Partnership intends to qualify as a partnership, in each case for U.S. federal income tax purposes

     WHEREAS, CPA: 17 and its subsidiaries, including the Operating Partnership, desire to avail
themselves of the experience, sources of information, advice and assistance of, and certain
facilities available to, the Advisor and to have the Advisor undertake the duties and
responsibilities hereinafter set forth, on behalf of, and subject to the supervision of the Board
of Directors of CPA: 17, all as provided herein; and

     WHEREAS, the Advisor is willing to render such services, subject to the supervision of the
Board of Directors, on the terms and conditions hereinafter set forth;

     NOW, THEREFORE, in consideration of the foregoing and of the mutual covenants and agreements
contained herein, the parties hereto agree as follows:

     1. Definitions. As used in this Agreement, the following terms have the definitions
hereinafter indicated:

     “2%/25% Guidelines.” The requirement, as provided for in Section 13 hereof, that, in
the 12-month period ending on the last day of any fiscal quarter, Operating Expenses not exceed the
greater of two percent of Average Invested Assets during such 12-month period or 25% of CPA: 17’s
Adjusted Net Income over the same 12-month period.

     “Acquisition Expenses.” To the extent not paid or to be paid by the seller, lessee,
borrower or any other party involved in the transaction, those expenses, including but not limited
to travel and communications expenses, the cost of appraisals, title insurance, nonrefundable
option payments on Investments not acquired, legal fees and expenses, accounting fees and expenses
and miscellaneous expenses, related to selection, acquisition and origination of Investments,
whether or not a particular Investment ultimately is made. Acquisition Expenses shall not include
Acquisition Fees.

     “Acquisition Fees.” The Initial Acquisition Fee and the Subordinated Acquisition Fee.

     “Adjusted Investor Capital.” As of any date, the Initial Investor Capital reduced by
any Redemptions, other than Redemptions intended to qualify as a liquidity event for purposes of
this Agreement, and by any other Distributions on or prior to such date determined by the Board to
be from Cash from Sales and Financings.

     “Adjusted Net Income.” For any period, the total consolidated revenues recognized in
such period by CPA: 17, less the total consolidated expenses of CPA: 17 recognized in such period,
excluding additions to reserves for depreciation and amortization, bad debts or other similar
non-cash reserves;

 

 

provided, however, that Adjusted Net Income for purposes of calculating total allowable
Operating Expenses shall exclude any gain, losses or writedowns from the sale of CPA: 17’s assets.

     “Advisor.” Carey Asset Management Corp, a corporation organized under the laws of the
State of Delaware and wholly-owned by W. P. Carey & Co. LLC.

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

     “Agreement.” This Advisory Agreement.

     “Appraised Value.” Value according to an appraisal made by an Independent Appraiser,
which may take into consideration any factor deemed appropriate by such Independent Appraiser,
including, but not limited to, the terms and conditions of any lease of a relevant property, the
quality of any lessee’s, borrower’s or other counter-party’s credit and the conditions of the
credit markets. The Appraised Value of a Property may be greater than the construction cost or the
replacement cost of the Property.

     “Articles of Incorporation.” Articles of Incorporation of CPA: 17 under the General
Corporation Law of Maryland, as amended from time to time, pursuant to which CPA: 17 is organized.

     “Asset Management Fee.” The Asset Management Fee as defined in Section 9(a) hereof.

     “Average Equity Value.” The equity portion of the aggregate purchase price paid by
CPA: 17 for an Investment, provided that, if (1) a later Appraised Value is obtained for the
Investment, that later Appraised Value, adjusted for other net assets and liabilities that have
economic value and are associated with that Investment, shall become the basis for calculating the
Average Equity Market Value of the Investment, and (2) for Investments in securities that CPA: 17
treats as available for sale under GAAP, the fair value of such securities as determined on a
monthly basis as of the last day of each month or, if applicable, on the date the securities are
disposed of, shall be the basis for calculating the Average Equity Market Value of such securities.

     “Average Invested Assets.” The average during any period of the aggregate book value
of CPA: 17’s Investments, before deducting reserves for depreciation, bad debts, impairments,
amortization and all other non-cash reserves, computed by taking the average of such values at the
end of each month during such period.

     “Average Market Value.” The aggregate purchase price paid by CPA: 17 for an
Investment, provided that, if a later Appraised Value is obtained for the Investment, that later
Appraised Value, adjusted for other net assets and liabilities that have economic value and are
associated with that Investment, shall become the Average Market Value for the Investment .

     “B Note.” A note representing a subordinated interest in a Loan secured by a first
mortgage on a Property.

     “Board or Board of Directors.” The Board of Directors of CPA: 17.

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     “Bylaws.” The bylaws of CPA: 17.

     “Cash from Financings.” Net cash proceeds realized by CPA: 17 from the financing of
Investments or the refinancing of any indebtedness of CPA: 17.

     “Cash from Sales.” Net cash proceeds realized by CPA: 17 from the sale, exchange or
other disposition of any of its Investments after deduction of all expenses incurred in connection
therewith. Cash from Sales shall not include Cash from Financings.

     “Cash from Sales and Financings.” The total sum of Cash from Sales and Cash from
Financings.

     “Cause.” With respect to the termination of this Agreement, fraud, criminal conduct,
willful misconduct or willful or negligent breach of fiduciary duty by the Advisor that, in each
case, is determined by a majority of the Independent Directors to be materially adverse to CPA: 17,
or a breach of a material term or condition of this Agreement by the Advisor and the Advisor has
not cured such breach within 30 days of written notice thereof or, in the case of any breach that
cannot be cured within 30 days by reasonable effort, has not taken all necessary action within a
reasonable time period to cure such breach.

     “Change of Control.” A change of control of CPA: 17 of a nature that would be
required to be reported in response to the disclosure requirements of Schedule 14A of Regulation
14A promulgated under the Securities Exchange Act of 1934, as amended (the “Exchange Act”),
as enacted and in force on the date hereof, whether or not CPA: 17 is then subject to such
reporting requirements; provided, however, that, without limitation, a Change of Control shall be
deemed to have occurred if: (i) any “person” (within the meaning of Section 13(d) of the Exchange
Act, as enacted and in force on the date hereof) is or becomes the “beneficial owner” (as that term
is defined in Rule 13d-3, as enacted and in force on the date hereof, under the Exchange Act) of
securities of CPA: 17 representing 8.5% or more of the combined voting power of CPA: 17’s
securities then outstanding; (ii) there occurs a merger, consolidation or other reorganization of
CPA: 17 which is not approved by the Board; (iii) there occurs a sale, exchange, transfer or other
disposition of substantially all of the assets of CPA: 17 to another entity, which disposition is
not approved by the Board; or (iv) there occurs a contested proxy solicitation of the Shareholders
of CPA: 17 that results in the contesting party electing candidates to a majority of the Board’s
positions next up for election.

     “Closing Date.” The first date on which Shares were issued pursuant to an Offering.

     “Code.” Internal Revenue Code of 1986, as amended.

     “Competitive Real Estate Commission.” The real estate or brokerage commission paid
for the purchase or sale of a Property that is reasonable, customary and competitive in light of
the size, type and location of the Property.

     “Construction Fee.” A fee or other remuneration for acting as general contractor
and/or construction manager to construct improvements, supervise and coordinate projects or to
provide major repairs or rehabilitation on a Property.

     “Contract Purchase Price.” The amount actually paid for, or allocated to, the
purchase, development, construction or improvement of an Investment or, in the case of an
originated Loan, the principal amount of such Loan, exclusive, in each case, of Acquisition Fees
and Acquisition Expenses.

     “Contract Sales Price.” The total consideration received by CPA: 17 for the sale of a
Property.

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     “CPA: 17.” Corporate Property Associates 17 — Global Incorporated together with its
consolidated subsidiaries, including the Operating Partnership, unless in the context of a
particular reference, it is clear that such reference refers to Corporate Property Associates 17 –
Global Incorporated excluding its consolidated subsidiaries. Unless the context otherwise
requires, any reference to financial measures of CPA: 17 shall be calculated by reference to the
consolidated financial statements of CPA: 17 and its subsidiaries, including, without limitation,
the Operating Partnership, prepared in accordance with GAAP.

     “Cumulative Return.” For the period for which the calculation is being made, the
percentage resulting from dividing (A) the total Distributions for such period (not including
Distributions out of Cash from Sales and Financings), by (B) the product of (i) either (x) until
such time as CPA: 17 has invested 90% of the net proceeds of CPA: 17’s initial Offering (excluding
net proceeds from the sale of Shares pursuant to CPA: 17’s distribution reinvestment program), the
average Adjusted Investor Capital for such period (calculated on a daily basis) or (y) from and
after such time as CPA: 17 has invested 90% of the net proceeds of CPA: 17’s initial Offering
(excluding net proceeds from the sale of Shares pursuant to CPA: 17’s distribution reinvestment
program), the net proceeds from the sale of Shares (excluding net proceeds from the sale of Shares
pursuant to CPA: 17’s distribution reinvestment program), as adjusted for Redemptions other than
Redemptions intended to qualify as a liquidity event for purposes of this Agreement, and by any
other Distributions on or prior to such date determined by the Board to be from Cash from Sales and
Financings, and (ii) the number of years (including fractions thereof) elapsed during such period.
Notwithstanding the foregoing, neither the Shares received by the Advisor or its Affiliates for any
consideration other than cash, nor the Distributions in respect of such Shares, shall be included
in the foregoing calculation.

     “Development Fee.” A fee for the packaging of a Property including negotiating and
approving plans, and undertaking to assist in obtaining zoning and necessary variances and
necessary financing for the specific Property, either initially or at a later date.

     “Directors.” The persons holding such office, as of any particular time, under the
Articles of Incorporation, whether they be the directors named therein or additional or successor
directors.

     “Distributions.” Distributions declared by the Board.

     “GAAP.” Generally accepted accounting principles in the United States.

     “Good Reason.” With respect to the termination of this Agreement, (i) any failure to
obtain a satisfactory agreement from any successor to CPA: 17 or the Operating Partnership to
assume and agree to perform CPA: 17’s or the Operating Partnership’s, as applicable, obligations
under this Agreement; or (ii) any material breach of this Agreement of any nature whatsoever by
CPA: 17 or the Operating Partnership; provided that (a) such breach is of a material term or
condition of this Agreement and (b) CPA: 17 or the Operating Partnership, as applicable, has not
cured such breach within 30 days of written notice thereof or, in the case of any breach that
cannot be cured within 30 days by reasonable effort, has not taken all necessary action within a
reasonable time period to cure such breach.

     “Gross Offering Proceeds.” The aggregate purchase price of Shares sold in any
Offering.

     “Independent Appraiser.” A qualified appraiser of real estate as determined by the
Board, who is not affiliated, directly or indirectly, with CPA: 17, the Advisor or their respective
Affiliates. Membership in a nationally recognized appraisal society such as the American Institute
of Real Estate Appraisers or the Society of Real Estate Appraisers shall be conclusive evidence of
such qualification.

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     “Independent Director.” A Director of CPA: 17 who meets the criteria for an
Independent Director specified in the Bylaws.

     “Individual.” Any natural person and those organizations treated as natural persons
in Section 542(a) of the Code.

     “Initial Acquisition Fee.” Any fee or commission (including any interest thereon)
paid by the Operating Partnership to the Advisor or, with respect to Section 9(d) or 9(f), by the
Operating Partnership to any party, in connection with the making of an Investment or the
development or construction of Properties by CPA: 17. A Development Fee or a Construction Fee paid
to a Person not affiliated with the Sponsor in connection with the actual development or
construction of a project after acquisition of the Property by CPA: 17 shall not be deemed an
Initial Acquisition Fee. Initial Acquisition Fees include, but are not limited to, any real estate
commission, selection fee, development fee or construction fee (other than as described above),
non-recurring management fees, loan fees, points or any fee of a similar nature, however
designated. Initial Acquisition Fees include Subordinated Acquisition Fees unless the context
otherwise requires. Initial Acquisition Fees shall not include Acquisition Expenses.

     “Initial Investor Capital.” The total amount of capital invested from time to time by
Shareholders (computed at the Original Issue Price per Share), excluding any Shares received by the
Advisor or its Affiliates for any consideration other than cash.

     “Investment.” means an investment made by CPA: 17, directly or indirectly, in a
Property, Loan or Other Permitted Investment Asset.

     “Loans.” The notes and other evidences of indebtedness or obligations acquired,
originated or entered into, directly or indirectly, by CPA: 17 as lender, noteholder, participant,
note purchaser or other capacity, including but not limited to first or subordinate mortgage loans,
construction loans, development loans, loan participations, B notes, loans secured by capital stock
or any other assets or form of equity interest and any other type of loan or financial arrangement,
such as providing or arranging for letters of credit, providing guarantees of obligations to third
parties, or providing commitments for loans. The term “Loans” shall not include leases which are
not recognized as leases for Federal income tax reporting purposes.

     “Loan Refinancing Fee.” A fee payable to the Advisor in respect of the refinancing of
a loan secured by an Investment.

     “Long-Term Net Leased Property.” A Property subject to a Net Lease which has a
remaining lease term of at least seven years (or is otherwise subject to terms the effect of which
is that there is a reasonable likelihood that the lease will have a remaining term of at least
seven years as a result of the exercise of options or otherwise) at the date such Property is
acquired or developed by CPA: 17, including Net Leased Properties accounted for under the equity
method of accounting.

     “Market Value.” The value calculated by multiplying the total number of outstanding
Shares by the average closing price of the Shares over the 30 trading days beginning 180 calendar
days after the Shares are first listed on a national security exchange or included for quotation on
Nasdaq, as the case may be.

     “Nasdaq.” The national automated quotation system operated by the National
Association of Securities Dealers, Inc.

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     “Net Lease.” A lease pursuant to which the tenant is required to pay substantially
all of the costs associated with operating and maintaining the Property.

     “Offering.” The offering of Shares pursuant to a Prospectus.

     “Operating Expenses.” All consolidated operating, general and administrative expenses
paid or incurred by CPA: 17, as determined under GAAP, except the following (insofar as they would
otherwise be considered operating, general and administrative expenses under GAAP): (i) interest
and discounts and other cost of borrowed money; (ii) taxes (including state, Federal and foreign
income tax, property taxes and assessments, franchise taxes and taxes of any other nature); (iii)
expenses of raising capital, including Organization and Offering Expenses, printing, engraving, and
other expenses, and taxes incurred in connection with the issuance and distribution of CPA: 17’s
Shares and Securities; (iv) Acquisition Expenses, real estate commissions on resale of property and
other expenses connected with the acquisition, disposition, origination, ownership and operation of
Investments, including the costs of foreclosure, insurance premiums, legal services, brokerage and
sales commissions, and the maintenance, repair and improvement of property; (v) Acquisition Fees or
Subordinated Disposition Fees payable to the Advisor or any other party; (vi) distributions paid by
the Operating Partnership to the Special General Partner under the agreement of limited partnership
of the Operating Partnership in respect of gains realized on dispositions of Investments; (vii)
amounts paid to effect a redemption or repurchase of the special general partner interest held by
the Special General Partner pursuant to the agreement of limited partnership of the Operating
Partnership; and (viii) non-cash items, such as depreciation, amortization, depletion, and
additions to reserves for depreciation, amortization, depletion, losses and bad debts.
Notwithstanding anything herein to the contrary, Operating Expenses shall include the Asset
Management Fee and any Loan Refinancing Fee and, solely for the purposes of determining compliance
with the 2%/25% Guidelines, distributions of profits and cash flow made by the Operating
Partnership to the Special General Partner pursuant to the agreement of limited partnership of the
Operating Partnership, other than distributions described in clauses (vi) and (vii) of this
definition.

     “Operating Partnership.” CPA: 17 Limited Partnership, a Delaware limited partnership.

     “Organization and Offering Expenses.” Those expenses payable by CPA: 17 and the
Operating Partnership in connection with the formation, qualification and registration of CPA: 17
and in marketing and distributing Shares, including, but not limited to: (i) the preparation,
printing, filing and delivery of any registration statement or Prospectus and the preparing and
printing of contractual agreements among CPA: 17, the Operating Partnership and the Sales Agent and
the Selected Dealers (including copies thereof); (ii) the preparing and printing of the Articles of
Incorporation and Bylaws, solicitation material and related documents and the filing and/or
recording of such documents necessary to comply with the laws of the State of Maryland for the
formation of a corporation and thereafter for the continued good standing of a corporation; (iii)
the qualification or registration of the Shares under state securities or “Blue Sky” laws; (iv) any
escrow arrangements, including any compensation to an escrow agent; (v) the filing fees payable to
the SEC and to the National Association of Securities Dealers, Inc.; (vi) reimbursement for the
reasonable and identifiable out-of-pocket expenses of the Sales Agent and the Selected Dealers,
including the cost of their counsel; (vii) the fees of CPA: 17’s counsel; (viii) all advertising
expenses incurred in connection with an Offering, including the cost of all sales literature and
the costs related to investor and broker-dealer sales and information meetings and marketing
incentive programs; and (ix) selling commissions, selected dealer fees, marketing fees, incentive
fees, due diligence fees and wholesaling fees incurred in connection with the sale of the Shares.

     “Original Issue Price.” For any Share issued in an Offering, the price at which such
Share was initially offered to the public by CPA:17, regardless of whether selling commissions were
paid in connection with the purchase of such Share from CPA: 17.

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     “Other Permitted Investment Asset.” An asset, other than cash, cash equivalents,
short term bonds, auction rate securities and similar short term investments, acquired by CPA: 17
for investment purposes that is not a Loan or a Property and is consistent with the investment
objectives and policies of CPA: 17.

     “Person.” An Individual, corporation, partnership, joint venture, association,
company, trust, bank, or other entity, or government or any agency or political subdivision of a
government.

     “Preferred Return.” A Cumulative Return of five percent computed from the Closing
Date through the date as of which such amount is being calculated.

     “Property or Properties.” CPA: 17’s partial or entire interest in real property
(including leasehold interests) and personal or mixed property
connected therewith. An Investment
which obligates CPA:17 to acquire a Property will be treated as a Property for purposes of this
Agreement.

     “Property Management Fee.” A fee for property management services rendered by the
Advisor or its Affiliates in connection with Properties acquired directly or through foreclosure.

     “Prospectus.” Any prospectus pursuant to which CPA: 17 offers Shares in a public
offering, as the same may at any time and from time to time be amended or supplemented after the
effective date of the registration statement in which it is included.

     “Redemptions.” An amount determined by multiplying the number of Shares redeemed by
the Original Issue Price.

     “REIT.” A real estate investment trust, as defined in Sections 856-860 of the Code.

     “Sales Agent.” Carey Financial Corporation.

     “Securities.” Any stock, shares (other than currently outstanding Shares and
subsequently issued Shares), voting trust certificates, bonds, debentures, notes or other evidences
of indebtedness, secured or unsecured, convertible, subordinated or otherwise or in general any
instruments commonly known as “securities” or any certificate of interest, shares or participation
in temporary or interim certificates for receipts (or, guarantees of, or warrants, options or
rights to subscribe to, purchase or acquire any of the foregoing), which subsequently may be issued
by CPA: 17.

     “Selected Dealers.” Broker-dealers who are members of the National Association of
Securities Dealers, Inc. and who have executed an agreement with the Sales Agent in which the
Selected Dealers agree to participate with the Sales Agent in the Offering.

     “Shareholders.” Those Persons who, at the time any calculation hereunder is to be
made, are shown as holders of record of Shares on the books and records of CPA: 17.

     “Share Market Value.” The value calculated by multiplying the total number of
outstanding Shares by the average closing price of the Shares over the 30 trading days beginning
180 calendar days after the Shares are first listed on a national security exchange or included for
quotation on Nasdaq, as the case may be.

     “Shares.” All of the shares of common stock of CPA: 17, $.001 par value, and any
other shares of common stock of CPA: 17.

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     “Special General Partner.” Carey Holdings LLC and any permitted transferee of the
special general partnership interest under the agreement of limited partnership of the Operating
Partnership.

     “Sponsor.” W.P. Carey & Co. LLC and any other Person directly or indirectly
instrumental in organizing, wholly or in part, CPA: 17 or any person who will control, manage or
participate in the management of CPA: 17, and any Affiliate of any such person. Sponsor does not
include a person whose only relationship to CPA: 17 is that of an independent property manager and
whose only compensation is as such. Sponsor also does not include wholly independent third parties
such as attorneys, accountants and underwriters whose only compensation is for professional
services.

     “Subordinated Acquisition Fee.” The Subordinated Acquisition Fee as defined in
Section 9(c) hereof.

     “Subordinated Disposition Fee.” The Subordinated Disposition Fee as defined in
Section 9(f) hereof.

     “Termination Date.” The effective date of any termination of this Agreement.

     “Total Investment Cost.” With regard to any Investment, an amount equal to the sum of
the Contract Purchase Price of such Investment plus the Acquisition Fees and Acquisition Expenses
paid in connection with such Investment.

     2. Appointment. CPA: 17 hereby appoints the Advisor to serve as its advisor on the
terms and conditions set forth in this Agreement, and the Advisor hereby accepts such appointment.

     3. Duties of the Advisor. The Advisor undertakes to use its best efforts to present
to CPA: 17 potential investment opportunities and to provide a continuing and suitable investment
program consistent with the investment objectives and policies of CPA: 17 as determined and adopted
from time to time by the Board. In performance of this undertaking, subject to the supervision of
the Board and consistent with the provisions of the Articles of Incorporation and Bylaws of CPA: 17
and any Prospectus pursuant to which Shares are offered, the Advisor shall, either directly or by
engaging an Affiliate:

     (a) serve as CPA: 17’s investment and financial advisor and provide research and
economic and statistical data in connection with CPA: 17’s assets and investment policies;

     (b) provide the daily management of CPA: 17 and perform and supervise the various
administrative functions reasonably necessary for the management of CPA: 17;

     (c) investigate, select, and, on behalf of CPA: 17, engage and conduct business with
such Persons as the Advisor deems necessary to the proper performance of its obligations
hereunder, including but not limited to consultants, accountants, correspondents, lenders,
technical advisors, attorneys, brokers, underwriters, corporate fiduciaries, escrow agents,
depositaries, custodians, agents for collection, insurers, insurance agents, banks,
builders, developers, property owners, mortgagors, and any and all agents for any of the
foregoing, including Affiliates of the Advisor, and Persons acting in any other capacity
deemed by the Advisor necessary or desirable for the performance of any of the foregoing
services, including but not limited to entering into contracts in the name of CPA: 17 with
any of the foregoing;

     (d) consult with Directors of CPA: 17 and assist the Board in the formulation and
implementation of CPA: 17’s policies, and furnish the Board with such
information, advice and
recommendations as they may request or as otherwise may be
necessary to enable them to discharge their fiduciary duties with respect to matters coming before the Board;

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     (e) subject to the provisions of Sections 3(g) and 4 hereof: (i) locate, analyze and
select potential Investments; (ii) structure and negotiate the terms and conditions of
transactions pursuant to which Investments will be made, purchased or acquired by CPA: 17;
(iii) make Investments on behalf of CPA: 17; (iv) arrange for financing and refinancing of,
make other changes in the asset or capital structure of, dispose of, reinvest the proceeds
from the sale of, or otherwise deal with the Investments; and (v) enter into leases and
service contracts for Properties and, to the extent necessary, perform all other operational
functions for the maintenance and administration of such Properties;

     (f) provide the Board with periodic reports regarding prospective Investments [and with
periodic reports, no less than quarterly, of new Investments made during the prior fiscal
quarter, which reports shall include information regarding the type of each Investment made
(in the categories provided in Section 9)];

     (g) obtain the prior approval of the Board (including a majority of the Independent
Directors) for any and all investments in Property which do not meet all of the requirements
set forth in Section 4(b) hereof;

     (h) negotiate on behalf of CPA: 17 with banks or lenders for loans to be made to CPA:
17, and negotiate on behalf of CPA: 17 with investment banking firms and broker-dealers or
negotiate private sales of Shares and Securities or obtain loans for CPA: 17, but in no
event in such a way so that the Advisor shall be acting as broker-dealer or underwriter; and
provided, further, that any fees and costs payable to third parties incurred by the Advisor
in connection with the foregoing shall be the responsibility of CPA: 17;

     (i) obtain reports (which may be prepared by the Advisor or its Affiliates), where
appropriate, concerning the value of Investments or contemplated Investments;

     (j) obtain for, or provide to, CPA: 17 such services as may be required in acquiring,
managing and disposing of Investments, including, but not limited to: (i) the negotiation,
making and servicing of Investments; (ii) the disbursement and collection of Company monies;
(iii) the payment of debts of and fulfillment of the obligations of CPA: 17; and (iv) the
handling, prosecuting and settling of any claims of or against CPA: 17, including, but not
limited to, foreclosing and otherwise enforcing mortgages and other liens securing Loans;

     (k) from time to time, or at any time reasonably requested by the Board, make reports
to the Board of its performance of services to CPA: 17 under this Agreement;

     (l) communicate on behalf of CPA: 17 with Shareholders as required to satisfy the
reporting and other requirements of any governmental bodies or agencies to Shareholders and
third parties and otherwise as requested by CPA: 17;

     (m) provide or arrange for administrative services and items, legal and other services,
office space, office furnishings, personnel and other overhead items necessary and
incidental to CPA: 17’s business and operations;

     (n) provide CPA: 17 with such accounting data and any other information requested by
CPA: 17 concerning the investment activities of CPA: 17 as shall be required to prepare and
to file all periodic financial reports and returns required to be filed with the Securities
and Exchange Commission and any other regulatory agency, including annual financial
statements;

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     (o) maintain the books and records of CPA: 17;

     (p) supervise the performance of such ministerial and administrative functions as may
be necessary in connection with the daily operations of the Investments;

     (q) provide CPA: 17 with all necessary cash management services;

     (r) do all things necessary to assure its ability to render the services described in
this Agreement;

     (s) perform such other services as may be required from time to time for management and
other activities relating to the assets of CPA: 17 as the Advisor shall deem advisable under
the particular circumstances;

     (t) arrange to obtain on behalf of CPA: 17 as requested by the Board, and deliver to or
maintain on behalf of CPA: 17 copies of, all appraisals obtained in connection with
investments in Properties and Loans; and

     (u) if a transaction, proposed transaction or other matter requires approval by the
Board or by the Independent Directors, deliver to the Board or the Independent Directors, as
the case may be, all documentation reasonably requested by them to properly evaluate such
transaction, proposed transaction or other matter.

     4. Authority of Advisor.

     (a) Pursuant to the terms of this Agreement (and subject to the restrictions included
in Paragraphs (b), (c) and (d) of this Section 4 and in Section 7 hereof), and subject to
the continuing and exclusive authority of the Board over the management of CPA: 17, the
Board hereby delegates to the Advisor the authority to: (1) locate, analyze and select
Investment opportunities; (2) structure the terms and conditions of transactions pursuant to
which Investments will be made or acquired for CPA: 17; (3) make or acquire Investments in
compliance with the investment objectives and policies of CPA: 17; (4) arrange for financing
or refinancing, or make changes in the asset or capital structure of, and dispose of or
otherwise deal with, Investments; (5) enter into leases and service contracts for
Properties, and perform other property level operations; (6) oversee non-affiliated property
managers and other non-affiliated Persons who perform services for CPA: 17; and (7)
undertake accounting and other record-keeping functions at the Investment level.

     (b) The consideration paid for an Investment acquired by CPA: 17 shall ordinarily be
based on the fair market value thereof. Consistent with the foregoing provision, the
Advisor may, without further approval by the Board (except with respect to transactions
subject to paragraphs (c) and (d)) invest on behalf of CPA: 17 in an Investment so long as,
in the Advisor’s good faith judgment, (i) the Total Investment Cost of such Investment does
not exceed the fair market value thereof, and in the case of an Investment that is a
Property, shall in no event exceed the Appraised Value of such Property and (ii) the
Investment, in conjunction with CPA: 17’s other investments and proposed investments, at the
time CPA: 17 is committed to purchase or originate the Investment, is reasonably expected to
fulfill CPA: 17’s investment objectives and policies as established by the Board and then in
effect. For purposes of the foregoing, Total Investment Cost shall be measured at the date
the Investment is made and shall exclude future commitments to fund improvements.
Investments not meeting the foregoing criteria must be approved in advance by the Board.

10

 

     (c) Notwithstanding anything to the contrary contained in this Agreement, the Advisor
shall not cause CPA: 17 to make Investments that do not comply with Article VIII
(Restrictions on Investments and Activities) and related sections of the Bylaws.

     (d) The prior approval of the Board, including a majority of the Independent Directors
and a majority of the Directors not interested in the transaction, will be required for:
(i) Investments made through co-investment or joint venture arrangements with the Sponsor,
the Advisor or any of their Affiliates; (ii) Investments which are not contemplated by the
terms of a Prospectus; (iii) transactions that present issues which involve conflicts of
interest for the Advisor or an Affiliate (other than conflicts involving the payment of fees
or the reimbursement of expenses); (iv) the lease of assets to the Sponsor, any Director,
the Advisor or any Affiliate of the Advisor; (v) any purchase or sale of an Investment from
or to the Advisor or an Affiliate; and (vi) the retention of any Affiliate of the Advisor to
provide services to CPA: 17 not expressly contemplated by this Agreement and the terms of
such services by such Affiliate. In addition, the Advisor shall comply with any further
approval requirements set forth in the Bylaws.

     (e) The Board may, at any time upon the giving of notice to the Advisor, modify or
revoke the authority set forth in this Section 4. If and to the extent the Board so
modifies or revokes the authority contained herein, the Advisor shall henceforth comply with
such modification or revocation, provided however, that such modification or revocation
shall be effective upon receipt by the Advisor and shall not be applicable to investment
transactions to which the Advisor has committed CPA: 17 prior to the date of receipt by the
Advisor of such notification.

     5. Bank Accounts. The Advisor may establish and maintain one or more bank accounts in
its own name for the account of CPA: 17 or in the name of CPA: 17 and may collect and deposit into
any such account or accounts, and disburse from any such account or accounts, any money on behalf
of CPA: 17, provided that no funds shall be commingled with the funds of the Advisor; and the
Advisor shall from time to time render appropriate accountings of such collections and payments to
the Board and to the auditors of CPA: 17.

     6. Records; Access. The Advisor shall maintain appropriate records of all its
activities hereunder and make such records available for inspection by the Board and by counsel,
auditors and authorized agents of CPA: 17, at any time or from time to time during normal business
hours. The Advisor shall at all reasonable times have access to the books and records of CPA: 17.

     7. Limitations on Activities. Anything else in this Agreement to the contrary
notwithstanding, the Advisor shall refrain from taking any action which, in its sole judgment made
in good faith, would adversely affect the status of CPA: 17 as a REIT or of the Operating
Partnership as a partnership for Federal income tax purposes, subject CPA: 17 or the Operating
Partnership to regulation under the Investment Company Act of 1940, would violate any law, rule,
regulation or statement of policy of any governmental body or agency having jurisdiction over CPA:
17, its Shares or its Securities, or otherwise not be permitted by the Articles of Incorporation or
Bylaws or agreement of limited partnership of the Operating Partnership, except if such action
shall be ordered by the Board, in which case the Advisor shall notify promptly the Board of the
Advisor’s judgment of the potential impact of such action and shall refrain from taking such action
until it receives further clarification or instructions from the Board. In such event the Advisor
shall have no liability for acting in accordance with the specific instructions of the Board so
given.

11

 

     (a) Notwithstanding the foregoing, the Advisor, its shareholders, directors, officers
and employees, and partners, shareholders, directors and officers of the Advisor’s
shareholders and Affiliates of any of them, shall not be liable to CPA: 17, the Operating
Partnership or to the Directors or Shareholders for any act or omission by the Advisor, its
shareholders, directors, officers and employees, or partners, shareholders, directors or
officers of the Advisor’s shareholders and Affiliates of any of them if the following
conditions are met:

     (i) The Advisor, its shareholders, directors, officers and employees, and
partners, shareholders, directors and officers of the Advisor’s shareholders and
Affiliates of any of them have determined, in good faith, that the course of conduct
which caused the loss or liability was in the best interests of CPA: 17;

     (ii) The Advisor, its shareholders, directors, officers and employees, and
partners, shareholders, directors and officers of the Advisor’s shareholders and
Affiliates of any of them were acting on behalf of or performing services for CPA:
17; and

     (iii) Such liability or loss was not the result of negligence or misconduct by
the Advisor, its shareholders, directors, officers and employees, and partners,
shareholders, directors and officers of the Advisor’s shareholders or Affiliates of
any of them.

     (b) Notwithstanding the foregoing, the Advisor and its Affiliates shall not be
indemnified by CPA: 17 or the Operating Partnership for any losses, liabilities or expenses
arising from or out of the alleged violation of federal or state securities laws unless one
or more of the following conditions are met:

     (i) There has been a successful adjudication on the merits of each count
involving alleged securities law violations as to the particular indemnitee;

     (ii) Such claims have been dismissed with prejudice on the merits by a court of
competent jurisdiction as to the particular indemnitee; or

     (iii) A court of competent jurisdiction approves a settlement of the claims
against a particular indemnitee and finds that indemnification of the settlement and
the related costs should be made, and the court considering the request for
indemnification has been advised of the position of the Securities and Exchange
Commission and of the published position of any state securities regulatory
authority in which securities of CPA: 17 were offered or sold as to indemnification
for violation of securities laws.

     (c) CPA: 17 and the Operating Partnership shall advance funds to the Advisor or its
Affiliates for legal expenses and other costs incurred as a result of any legal action for
which indemnification is being sought only if all of the following conditions are satisfied:

     (i) The legal action relates to acts or omissions with respect to the
performance of duties or services on behalf of CPA: 17;

     (ii) The legal action is initiated by a third party who is not a Shareholder or
the legal action is initiated by a Shareholder acting in his or her capacity as such
and a court of competent jurisdiction specifically approves such advancement; and

     (iii) The Advisor or the Affiliate undertakes to repay the advanced funds to
CPA: 17, together with the applicable legal rate of interest thereon, in cases in
which such Advisor or Affiliate is found not to be entitled to indemnification.

     (d) Notwithstanding the foregoing, the Advisor shall not be entitled to indemnification
or be held harmless pursuant to this Section 7 for any activity which the Advisor shall be
required to indemnify or hold harmless CPA: 17 pursuant to Section 22.

     (e) Any amounts paid pursuant to this Section 7 shall be recoverable or paid only out
the net assets of CPA: 17 and not from Shareholders.

     8. Relationship with Directors. There shall be no limitation on any shareholder,
director, officer, employee or Affiliate of the Advisor serving as a Director or an officer of CPA:
17, except that no employee of the Advisor or its Affiliates who also is a Director or officer of
CPA: 17 shall receive any compensation from CPA: 17 for serving as a Director or officer other than
for reasonable reimbursement for travel and related expenses incurred in attending meetings of the
Board; for the avoidance of doubt, the limitations of this Section 8 shall not apply to any
compensation paid by the Advisor or any Affiliate for which CPA: 17 reimbursed the Advisor or
Affiliate in accordance with Section 10 hereof.

     9. Fees.

     (a) Asset Management Fee. (i) The Operating Partnership shall pay to the
Advisor as compensation for the advisory services rendered hereunder an asset management fee
(the “Asset Management Fee”) in an amount equal to the percentage of the Average
Equity Market Value of an Investment as specified in the following table:

	 	 	 
	Type of Investment	 	Asset Management Fee
	Long-Term Net Leased Properties

	 	0.50% of the Average Market Value
	 
	 	 
	B Notes, mortgage backed securities and
Loans

	 	1.75% of the Average Equity Value
	 
	 	 
	Investments in readily marketable real
estate securities (other than B Notes,
mortgage backed securities and Loans)
purchased on the secondary market

	 	1.50% of the Average Equity Value
	 
	 	 
	All other Investments not described in
the foregoing categories, such as
interests in entities that own real
estate or are engaged in real estate
related businesses, short-term net
leases and equity investments in real
property

	 	0.50% of the Average Market Value

     (ii) The Asset Management Fee with respect to an Investment will be calculated
monthly, beginning with the month in which CPA: 17 first makes the
Investment, and
shall be pro rated for the number of days during a month that CPA: 17 owns the
Investment. The aggregate Asset Management Fees calculated with respect to each
month shall be payable on the first business day following such month.

     (b) Initial Acquisition Fee. (i) The Advisor may receive as partial
compensation for services rendered in connection with the investigation, selection,
acquisition or origination (by purchase, investment or exchange) of any Investment, an
initial acquisition fee (an “Initial Acquisition Fee”) payable by the Operating
Partnership. The Initial Acquisition Fee payable to the Advisor in respect of an Investment
shall be payable at the time such Investment is acquired in an amount determined as
specified in the following table:

12

 

	 	 	 
	Type of Investment	 	Initial Acquisition Fee
	Long term Net Leased Properties

	 	2.5% of the aggregate Total
Investment Cost
	 
	 	 
	B
Notes, mortgage backed  securities and Loans

	 	1.0% of the sum of (x) the Average Equity Value,
plus (y) the Acquisition Fees paid by CPA: 17 in respect of the Investment.
	 
	 	 
	Investments in readily
marketable real estate
securities (other than B
notes, mortgage backed
securities and Loans)
purchased on the secondary
market

	 	None
	 
	 	 
	All other Investments not
described in the foregoing
categories, such as interests
in entities that own real
estate or are engaged in real
estate related businesses,
short term net leases and
equity investments in real
property

	 	1.75% of the sum of (x) the equity capital
invested by CPA: 17 in the Investment plus
(y) the Acquisition Fees paid by CPA: 17
in respect of the Investment.

     (ii) At the time an Investment is made, the Advisor shall determine the type of
Investment, which shall be used for the purpose of calculating all fees due
hereunder; it being understood that the Advisor shall use its reasonable judgment,
based primarily upon the economic substance of an Investment, in determining the
classification of an Investment, provided, that in the event of any dispute, the
Independent Directors shall finally determine for all purposes the type of
Investment.

     (c) Subordinated Acquisition Fee. (i) In addition to the Initial Acquisition
Fee described in Section 9(b) above, the Advisor may receive additional compensation in
connection with the investigation, selection, acquisition or origination (by purchase,
investment or exchange) of Investments a Subordinated Acquisition Fee payable by the
Operating Partnership to the Advisor or its Affiliates (the “Subordinated Acquisition
Fee”). The total Subordinated Acquisition Fees payable shall be an amount determined as
specified in the following table:

	 	 	 
	Type of Investment	 	Subordinated Acquisition Fee
	Long term Net Leased Properties

	 	2.0% of the aggregate Total Investment Cost.
	 
	 	 
	All other Investments not
described in the foregoing
category

	 	None

     (ii) The Subordinated Acquisition Fee shall be payable in three equal annual
installments on the first business day of the fiscal quarter immediately following
the fiscal quarter in which the Investment is made and the first business day of the
corresponding fiscal quarter in each of the subsequent two fiscal years. The unpaid
portion of the Subordinated Acquisition Fee with respect to any Investment will bear
interest at the rate of 5% per annum from the date of acquisition of the Investment
until the portion of the Subordinated Acquisition Fee is paid. The accrued interest
is payable on the date of each annual installment of the fees. The Subordinated
Acquisition Fee payable in any year, and accrued interest thereon, will be
subordinated to the Preferred

13

 

Return of 5% and only paid if the Preferred Return of 5% has been achieved
through the end of the prior fiscal quarter. Any portion of the Subordinated
Acquisition Fee, and accrued interest thereon, not paid due to CPA: 17’s failure to
meet the Preferred Return of 5% through any fiscal quarter end shall be paid by CPA:
17 on the first business day of the fiscal quarter next following the fiscal quarter
end through which the Preferred Return of 5% has been met.

     (d) Six Percent Limitation. The total amount of all Initial Acquisition Fees
plus Subordinated Acquisition Fees, including interest thereon, whether payable to the Advisor or a third party, and
Acquisition Expenses payable by the Operating Partnership may not exceed 6% of the aggregate
Contract Purchase Price of all Investments, measured for the period beginning with the
initial acquisition of an Investment and ending (i) on December 31 of the year in which CPA:
17 has invested 90% of the net proceeds of its initial Offering (excluding the net proceeds
from the sale of Shares pursuant to CPA: 17’s dividend reinvestment program), and (ii) on
each December 31 thereafter, unless a majority of the Directors (including a majority of the
Independent Directors) not otherwise interested in any transaction approves the excess as
being commercially competitive, fair and reasonable to CPA: 17.

     (e) Property Management Fee; Loan Refinancing Fee. No Property Management Fee
or Loan Refinancing Fee shall be paid unless approved by a majority of the Independent
Directors.

     (f) Subordinated Disposition Fee. (i) If the Advisor or an Affiliate provides
a substantial amount of services in the sale of an Investment, the Advisor or such Affiliate
shall be entitled to receive a subordinated disposition fee (the “Subordinated
Disposition Fee”) at the time of such disposition, in an amount equal to the lesser of
(1) 50% of the Competitive Real Estate Commission (if applicable) and (2) 3.0% of the
Contract Sales Price of the Investment; provided, however, that (A) the Subordinated
Disposition Fee in respect of Investments that are B Notes, mortgage backed securities and
Loans shall equal 1.0% of the equity capital invested by CPA: 17 in the Investment, and (B)
no Subordinated Disposition Fee shall be paid in respect of Investments that are readily
marketable securities.

     (ii) The total real estate commissions and Subordinated Disposition Fees CPA:
17 pays to all Persons shall not exceed an amount equal to the lesser of: (1) 6% of
the Contract Sales Price of the Investment or (2) the Competitive Real Estate
Commission. Payment of Subordinated Disposition Fees and accrued interest thereon,
will be subordinated to the Preferred Return and only paid if the Preferred Return
of 5% has been achieved through the end of the prior fiscal quarter. To the extent
that Subordinated Disposition Fees are not paid on a current basis due to the
foregoing limitation, the unpaid fees will be due and paid at such time as the
limitation has been satisfied, together with interest from the time of disposition
of the Investment to which they relate, at the rate of 5%. The Advisor shall
present to the Independent Directors such information as they may reasonably request
to review the level of services provided by the Advisor in connection with a
disposition and the basis for the calculation of the amount of the Subordinated
Disposition Fees on a quarterly basis. No payment of Subordinated Disposition Fees
shall be made prior to review and approval of such information by the Independent
Directors.

     (g) Loans From Affiliates. CPA: 17 shall not borrow funds from the Advisor or
its Affiliates unless (A) the transaction is approved by a majority of the Independent
Directors and a majority of the Directors who are not interested in the transaction as being
fair, competitive and commercially reasonable, (B) the interest and other financing charges
or fees received by the

14

 

Advisor or its Affiliates do not exceed the amount which would be charged by
non-affiliated lending institutions and (C) the terms are not less favorable than those
prevailing for comparable arm’s-length loans for the same purpose. CPA: 17 will not borrow on a long-term basis from the Advisor or its
Affiliates unless it is to provide the debt portion of a particular investment and CPA: 17
is unable to obtain a permanent loan at that time or in the judgment of the Board, it is not
in CPA: 17’s best interest to obtain a permanent loan at the interest rates then prevailing
and the Board has reason to believe that CPA: 17 will be able to obtain a permanent loan on
or prior to the end of the loan term provided by the Advisor or its Affiliates.

     (h) Changes To Fee Structure. In the event the Shares are listed on a national
securities exchange or are included for quotation on Nasdaq, CPA: 17 and the Advisor shall
negotiate in good faith to establish a fee structure appropriate for an entity with a
perpetual life. A majority of the Independent Directors must approve the new fee structure
negotiated with the Advisor. In negotiating a new fee structure, the Independent Directors
may consider any of the factors they deem relevant, including but not limited to: (a) the
size of the Advisory Fee in relation to the size, composition and profitability of CPA: 17’s
portfolio; (b) the success of the Advisor in generating opportunities that meet the
investment objectives of CPA: 17; (c) the rates charged to other REITs and to investors
other than REITs by Advisors performing similar services; (d) additional revenues realized
by the Advisor and its Affiliates through their relationship with CPA: 17, including loan
administration, underwriting or broker commissions, servicing, engineering, inspection and
other fees, whether paid by CPA: 17 or by others with whom CPA: 17 does business; (e) the
quality and extent of service and advice furnished by the Advisor; (f) the performance of
the investment portfolio of CPA: 17, including income, conservation or appreciation of
capital, frequency of problem investments and competence in dealing with distress
situations; and (g) the quality of the portfolio of CPA: 17 in relationship to the
investments generated by the Advisor for the account of other clients. The Independent
Directors shall not approve any new fee structure that is in their judgment more favorable
(taken as a whole) to the Advisor than the current fee structure.

     (i) Payment. Compensation payable to the Advisor pursuant to this Section 9
shall be paid in cash; provided, however, that any fee payable pursuant to Section 9 may be
paid, at the option of the Advisor, in the form of: (i) cash, (ii) restricted stock of CPA:
17, or (iii) a combination of cash and restricted stock. The Advisor shall notify CPA: 17
in writing annually of the form in which the fee shall be paid. Such notice shall be
provided no later than January 15 of each year. If no such notice is provided, the fee
shall be paid in cash. For purposes of the payment of compensation to the Advisor in the
form of stock, the value of each share of restricted stock shall be: (i) the Net Asset
Value per Share as determined based on the most recent appraisal of CPA: 17’s assets
performed by an Independent Appraiser, or (ii) if an appraisal has not yet been performed,
$10 per share. If shares are being offered to the public at the time a fee is paid with
stock, the value shall be the price of the stock without commissions. The Net Asset Value
determined on the basis of such appraisal may be adjusted on a quarterly or other basis by
the Board to account for significant capital transactions. Stock issued by CPA: 17 to the
Advisor in payment of fees hereunder shall be governed by the terms set forth in Schedule A
hereto, or such other terms as the Advisor and CPA: 17 may from time to time agree.

15

 

     10. Expenses.

     (a) Subject to the limitations set forth in Section 9(d), to the extent applicable, in
addition to the compensation paid to the Advisor pursuant to Section 9 hereof, the Operating
Partnership shall pay directly or reimburse the Advisor for the following expenses:

     (i) Organization and Offering Expenses; provided however, that within 60 days
after the end of the quarter in which any Offering terminates, the Advisor shall
reimburse the Operating Partnership for any Organization and Offering Expense
reimbursements received by the Advisor pursuant to this Section 10 to the extent
that such reimbursements, when added to the balance of the Organization and Offering
Expenses (excluding selling commissions, the selected dealer fee and the wholesaling
fee) paid directly by the Operating Partnership, exceed four percent of the Gross
Offering Proceeds; provided further, that the Advisor shall be responsible for the
payment of all Organization and Offering Expenses (excluding such commissions and
such fees and expense reimbursements) in excess of four percent of the Gross
Offering Proceeds;

     (ii) all Acquisition Expenses;

     (iii) to the extent not included in Acquisition Expenses, all expenses of
whatever nature reasonably incurred and directly connected with the proposed acquisition of any Investment
that does not result in the actual acquisition of the Investment, including, without
limitation, personnel costs;

     (iv) expenses other than Acquisition Expenses incurred in connection with the
investment of the funds of CPA: 17, including, without limitation, costs of
retaining industry or economic consultants and finder’s fees and similar payments,
to the extent not paid by the seller of the Investment or another third party,
regardless of whether such expenses were incurred in transactions where a fee is not
payable to the Advisor;

     (v) interest and other costs for borrowed money, including discounts, points
and other similar fees;

     (vi) taxes and assessments on income of CPA: 17, to the extent paid or advanced
by the Advisor, or on Investments and taxes as an expense of doing business;

     (vii) costs associated with insurance required in connection with the business
of CPA: 17 or by the Directors;

     (viii) expenses of managing and operating Investments owned by CPA: 17, whether
payable to an Affiliate of the Advisor or a non-affiliated Person;

     (ix) fees and expenses of legal counsel for CPA: 17;

     (x) fees and expense of auditors and accountants for CPA: 17;

     (xi) all expenses in connection with payments to the Directors and meetings of
the Directors and Shareholders;

     (xii) expenses associated with listing the Shares and Securities on a
securities exchange or Nasdaq if requested by the Board;

16

 

     (xiii) expenses connected with payments of Distributions in cash or otherwise
made or caused to be made by the Board to the Shareholders;

     (xiv) expenses of organizing, revising, amending, converting, modifying, or
terminating CPA: 17, the Operating Partnership or their respective governing
instruments;

     (xv) expenses of maintaining communications with Shareholders, including the
cost of preparation, printing and mailing annual reports and other Shareholder
reports, proxy statements and other reports required by governmental entities; and

     (xvi) all other expenses the Advisor incurs in connection with providing
services to CPA: 17, including reimbursement to the Advisor or its Affiliates for
the cost of rent, goods, materials and personnel incurred by them based upon the
compensation of the Persons involved and an appropriate share of overhead allocable
to those Persons as reasonably determined by the Advisor on a basis approved
annually by the Board (including a majority of the Independent Directors). No
reimbursement shall be made for the cost of personnel to the extent that such
personnel are used in transactions for which the Advisor receives a separate fee.

     (b) Expenses incurred by the Advisor on behalf of CPA: 17 and payable pursuant to this
Section 10 shall be reimbursed quarterly to the Advisor within 60 days after the end of each
quarter, subject to the provisions of Section 13 hereof. The Advisor shall prepare a
statement documenting the Operating Expenses of CPA: 17 within 45 days after the end of each
quarter.

     11. Other Services. Should the Board request that the Advisor or any Affiliate,
shareholder or employee thereof render services for CPA: 17 other than as set forth in Section 3
hereof, such services shall be separately compensated and shall not be deemed to be services
pursuant to the terms of this Agreement.

     12. Fidelity Bond. The Advisor shall maintain a fidelity bond for the benefit of CPA:
17 which bond shall insure CPA: 17 from losses of up to $5,000,000 and shall be of the type
customarily purchased by entities performing services similar to those provided to CPA: 17 by the
Advisor.

     13. Limitation on Expenses.

     (a) If Operating Expenses during the 12-month period ending on the last day of any
fiscal quarter of CPA: 17 exceed the greater of (i) two percent of the Average Invested
Assets during the same 12-month period or (ii) 25% of the Adjusted Net Income of CPA: 17
during the same 12-month period, then subject to paragraph (b) of this Section 13, such
excess amount shall be the sole responsibility of the Advisor and neither the Operating
Partnership nor CPA: 17 shall be liable for payment therefor. CPA: 17 may defer the payment
or distribution to the Advisor and the Special General Partner of fees, expenses and
distributions that would, if paid or distributed, cause Operating Expenses during such
12-month period to exceed the foregoing limitations; provided, however, that in determining
which items shall be paid and which may be deferred, priority will be given to the payment
of distributions to the Special General Partner over the payment to the Advisor of amounts
due under this Agreement.

     (b) Notwithstanding the foregoing, to the extent that the Advisor becomes responsible
for any excess amount as provided in paragraph (a), if a majority of the Independent
Directors finds such excess amount or a portion thereof justified based on such unusual and
non-recurring

17

 

factors as they deem sufficient, the Operating Partnership shall reimburse the Advisor
in future quarters for the full amount of such excess, or any portion thereof, but only to
the extent such reimbursement would not cause the Operating Expenses to exceed the 2%/25%
Guidelines in the 12-month period ending on the last day of such quarter. In no event shall
the Operating Expenses payable by the Operating Partnership in any 12-month period ending at
the end of a fiscal quarter exceed the 2%/25% Guidelines.

     (c) Within 60 days after the end of any twelve-month period referred to in paragraph
(a), the Advisor shall reimburse CPA: 17 for any amounts expended by CPA: 17 in such
twelve-month period that exceeds the limitations provided in paragraph (a) unless the
Independent Directors determine that such excess expenses are justified, as provided in
paragraph (b), and provided the Operating Expenses for such later quarter would not thereby
exceed the 2%/25% Guidelines.

     (d) All computations made under paragraphs (a) and (b) of this Section 13 shall be
determined in accordance with generally accepted accounting principles applied on a
consistent basis.

     (e) If the Special General Partner receives distributions pursuant to the agreement of
limited partnership of the Operating Partnership in respect of realized gains on the
disposition of an Investment, Adjusted Net Income, for purposes of calculating the Operating
Expenses, shall exclude the gain from the disposition of such Investment.

     14. Other Activities of the Advisor. Nothing herein contained shall prevent the
Advisor from engaging in other activities, including without limitation direct investment by the
Advisor and its Affiliates in assets that would be suitable for CPA: 17, the rendering of advice to
other investors (including other REITs) and the management of other programs advised, sponsored or
organized by the Advisor or its Affiliates; nor shall this Agreement limit or restrict the right of
the Advisor or any of its Affiliates or of any director, officer, employee or shareholder of the
Advisor or its Affiliates to engage in any other business or to render services of any kind to any
other partnership, corporation, firm, individual, trust or association. The Advisor may, with
respect to any investment in which CPA: 17 is a participant, also render advice and service to each
other participant therein. Without limiting the generality of the foregoing, CPA 17 acknowledges
that the Advisor provides or will provide services to other CPA REIT funds, whether now in
existence or formed hereafter, and that the Advisor and its Affiliates may invest for their own
account. The Advisor shall be responsible for promptly reporting to the Board the existence of any
actual or potential conflict of interest that arises that may affect its performance of its duties
under this Agreement. If the Sponsor, Advisor, Director or Affiliates thereof has or have
sponsored other investment programs with similar investment objectives which have investment funds
available at the same time as CPA: 17, it shall be the duty of the Advisor to adopt a reasonable
method by which properties are to be allocated to the competing investment entities and to use its
best efforts to apply such method fairly to CPA: 17.

     The Advisor shall be required to use its best efforts to present a continuing and suitable
investment program to CPA: 17 that is consistent with the investment policies and objectives of
CPA: 17, but subject to the last sentence of the preceding paragraph, neither the Advisor nor any
Affiliate of the Advisor shall be obligated generally to present any particular investment
opportunity to CPA: 17 even if the opportunity is of character which, if presented to CPA: 17,
could be taken by CPA: 17.

     If the Advisor or its Affiliates is presented with a potential investment which might be made
by CPA: 17 and by another investment entity which the Advisor or its Affiliates advises or manages,
the Advisor shall consider, among other things, the investment portfolio of each entity, cash flow
of each

18

 

entity, the effect of the acquisition on the diversification of each entity’s portfolio,
rental payments during any renewal period, the estimated income tax effects of the purchase on each
entity, the policies of each entity relating to leverage, the funds of each entity available for
investment, the amount of equity required to make the investment and the length of time such funds
have been available for investment.

     15. Relationship of Advisor and CPA: 17. CPA: 17 and the Advisor agree that they have
not created and do not intend to create by this Agreement a joint venture or partnership
relationship between them and nothing in this Agreement shall be construed to make them partners or
joint venturers or impose any liability as partners or joint venturers on either of them.

     16. Term; Termination of Agreement. This Agreement, as amended and restated, shall
continue in force until September 30, 2008 or until 60 days after the date on which the Independent
Directors shall have notified the Advisor of their determination either to renew this Agreement for an
additional one-year period or terminate this Agreement, as required by CPA: 17’s Charter.

     17. Termination by CPA: 17. At the sole option the Board (including a majority of the
Independent Directors), this Agreement may be terminated immediately by written notice of
termination from CPA: 17 to the Advisor upon the occurrence of events which would constitute Cause
or if any of the following events occur:

     (a) If the Advisor shall breach this Agreement; provided that such breach (i) is of a
material term or condition of this Agreement and (ii) the Advisor has not cured such breach
within 30 days of written notice thereof or, in the case of any breach that cannot be cured
within 30 days by reasonable effort, has not taken all necessary action within a reasonable
time period to cure such breach;

     (b) If the Advisor shall be adjudged bankrupt or insolvent by a court of competent
jurisdiction, or an order shall be made by a court of competent jurisdiction for the
appointment of a receiver, liquidator, or trustee of the Advisor, for all or substantially
all of its property by reason of the foregoing, or if a court of competent jurisdiction
approves any petition filed against the Advisor for reorganization, and such adjudication or
order shall remain in force or unstayed for a period of 30 days; or

     (c) If the Advisor shall institute proceedings for voluntary bankruptcy or shall file a
petition seeking reorganization under the federal bankruptcy laws, or for relief under any
law for relief of debtors, or shall consent to the appointment of a receiver for itself or
for all or substantially all of its property, or shall make a general assignment for the
benefit of its creditors, or shall admit in writing its inability to pay its debts,
generally, as they become due.

     Any notice of termination under Section 16 or 17 shall be effective on the date specified in
such notice, which may be the day on which such notice is given or any date thereafter. The
Advisor agrees that if any of the events specified in Section 17(b) or (c) shall occur, it shall
give written notice thereof to the Board within 15 days after the occurrence of such event.

     18. Termination by Either Party. This Agreement may be terminated immediately without
penalty (but subject to the requirements of Section 20 hereof) by the Advisor by written notice of
termination to CPA: 17 upon the occurrence of events which would constitute Good Reason or by CPA:
17 without cause or penalty (but subject to the requirements of Section 20 hereof) by action of the
Directors, a majority of the Independent Directors or by action of a majority of the Shareholders,
in each case upon 60 days’ written notice.

19

 

     19. Assignment Prohibition. This Agreement may not be assigned by the Advisor without
the approval of the Board (including a majority of the Independent Directors); provided, however,
that such approval shall not be required in the case of an assignment to a corporation,
partnership, association, trust or organization which may take over the assets and carry on the
affairs of the Advisor, provided: (i) that at the time of such assignment, such successor
organization shall be owned substantially by an entity directly or indirectly controlled by the
Sponsor and only if such entity has a net worth of at least $5,000,000, and (ii) that the board of
directors of the Advisor shall deliver to the Board a statement in writing indicating the ownership
structure and net worth of the successor organization and a certification from the new Advisor as
to its net worth. Such an assignment shall bind the assignees hereunder in the same manner as the
Advisor is bound by this Agreement. The Advisor may assign any rights to receive fees or other
payments under this Agreement without obtaining the approval of the Board. This Agreement shall
not be assigned by CPA: 17 or the Operating Partnership without the consent of the Advisor, except
in the case of an assignment by CPA: 17 or the Operating Partnership to a corporation or other
organization which is a successor to CPA: 17 or the Operating Partnership, in which case such
successor organization shall be bound hereunder and by the terms of said assignment in the same
manner as CPA: 17 or the Operating Partnership is bound by this Agreement.

     20. Payments to and Duties of Advisor Upon Termination.

     (a) After the Termination Date, the Advisor shall not be entitled to compensation for
further services hereunder but shall be entitled to receive from CPA: 17 the following:

     (i) all unpaid reimbursements of Organization and Offering Expenses and of
Operating Expenses payable to the Advisor;

     (ii) all earned but unpaid Asset Management Fees payable to the Advisor prior
to the Termination Date;

     (iii) all earned but unpaid Acquisition Fees and interest thereon, in each case
payable to the Advisor relating to the acquisition of any Property prior to the
Termination Date;

     (iv) all earned but unpaid Subordinated Disposition Fees and interest thereon,
payable to the Advisor relating to the sale of any Investment prior to the
Termination Date; and

     (v) all earned but unpaid Property Management Fees and Loan Refinancing Fees,
if any, payable to the Advisor or its Affiliates relating to the management of any
property prior to the termination of this Agreement.

     (b) Notwithstanding the foregoing, if this Agreement is terminated by the Company for
Cause, or by the Advisor for other than Good Reason, the Advisor will not be entitled to
receive the sums in Section 20(a) (ii) through (v).

     (c) Any and all amounts payable to the Advisor pursuant to Section 20(a) that,
irrespective of the termination, were payable on a current basis prior to the Termination
Date either because they were not subordinated or all conditions to their payment had been
satisfied, shall be paid within 90 days after the Termination Date. All other amounts shall
be paid in a manner determined by the Board, but in no event on terms less favorable to the
Advisor than those represented by a note (i) maturing upon the liquidation of CPA: 17 or the
Operating Partnership or three years from the Termination Date, whichever is earlier, (ii)
with no less than

20

 

twelve equal quarterly installments and (iii) bearing a fair, competitive and
commercially reasonable interest rate (the “Note”). The Note, if any, may be
prepaid by the Operating Partnership at any time prior to maturity with accrued interest to
the date of payment but without premium or penalty. Notwithstanding the foregoing, any
amounts that relate to Investments (i) shall be an amount which provides compensation to the
Advisor only for that portion of the holding period for the respective Investments during
which the Advisor provided services to CPA: 17, (ii) shall not be due and payable until the
Investment Asset to which such amount relates is sold or refinanced, and (iii) shall not
bear interest until the Investment to which such amount relates is sold or refinanced. A
portion of the amount shall be paid as each Investment owned by CPA: 17 on the Termination
Date is sold. The portion of such amount payable upon each such sale shall be equal to (i)
such amount multiplied by (ii) the percentage calculated by dividing the fair value (at the
Termination Date) of the Investment sold by CPA: 17 divided by the total fair value (at the
Termination Date) of all Investments owned by CPA: 17 on the Termination Date.

     (d) The Advisor shall promptly upon termination.

     (i) pay over to the Operating Partnership all money collected and held for the
account of CPA: 17 pursuant to this Agreement, after deducting any accrued
compensation and reimbursement for its expenses to which it is then entitled;

     (ii) deliver to the Board a full accounting, including a statement showing all
payments collected by it and a statement of all money held by it, covering the
period following the date of the last accounting furnished to the Board;

     (iii) deliver to the Board all assets, including Properties and Loans, and
documents of CPA: 17 then in the custody of the Advisor; and

     (iv) cooperate with CPA: 17 to provide an orderly management transition.

     21. Indemnification by CPA: 17 and the Operating Partnership. Neither CPA: 17 nor the Operating Partnership shall indemnify the Advisor or any of
its Affiliates for any loss or liability suffered by the Advisor or the Affiliate, or hold
the Advisor or the Affiliate harmless for any loss or liability
suffered by CPA: 17, except as permitted under Section 7.

21

 

     22. Indemnification by Advisor. The Advisor shall indemnify and hold harmless CPA: 17
and the Operating Partnership from liability, claims, damages, taxes or losses and related expenses
including attorneys’ fees, to the extent that such liability, claims, damages, taxes or losses and
related expenses are not fully reimbursed by insurance and are incurred by reason of the Advisor’s
bad faith, fraud, willful misfeasance, misconduct, negligence or reckless disregard of its duties.

     23. Joint and Several Obligations. Any obligations of CPA: 17 shall be construed as
the joint and several obligations of CPA: 17 and the Operating Partnership, unless otherwise
specifically provided in this Agreement.

     24. Notices. Any notice, report or other communication required or permitted to be
given hereunder shall be in writing unless some other method of giving such notice, report or other
communication is accepted by the party to whom it is given, and shall be given by being delivered
by hand or by overnight mail or other overnight delivery service to the addresses set forth herein:

	 	 	 	 	 
	 

	 	To the Board
	 	Corporate Property Associates 17 – Global

22

 

	 	 	 	 	 
	 

	 	and to CPA: 17:	 	Incorporated
	 

	 	 	 	50 Rockefeller Plaza
	 

	 	
	 	New York, NY 10020
	 
	 	 	 	 
	 

	 	To the Operating Partnership:
	 	c/o Corporate Property Associates 17 -
	 

	 	 	 	Global Incorporated
	 

	 	 	 	50 Rockefeller Plaza
	 

	 	 	 	New York, NY 10020
	 
	 	 	 	 
	 

	 	To the Advisor:
	 	Carey Asset Management Corp.
	 

	 	 	 	50 Rockefeller Plaza
	 

	 	 	 	New York, NY 10020

     Either party may at any time give notice in writing to the other party of a change in its
address for the purposes of this Section 23.

     25. Modification. This Agreement shall not be changed, modified, terminated, or
discharged, in whole or in part, except by an instrument in writing signed by both parties hereto,
or their respective successors or assignees.

     26. Severability. The provisions of this Agreement are independent of and severable
from each other, and no provision shall be affected or rendered invalid or unenforceable by virtue
of the fact that for any reason any other or others of them may be invalid or unenforceable in
whole or in part.

     27. Construction. This Agreement shall be governed by, construed and enforced in
accordance with the laws of the State of New York.

     28. Entire Agreement. This Agreement contains the entire agreement and understanding
among the parties hereto with respect to the subject matter hereof, and supersedes all prior and
contemporaneous agreements, understandings, inducements and conditions, express or implied, oral or
written, of any nature whatsoever with respect to the subject matter hereof. The express terms
hereof control and supersede any course of performance and/or usage of the trade inconsistent with
any of the terms hereof. This Agreement may not be modified or amended other than by an agreement
in writing.

     29. Indulgences, Not Waivers. Neither the failure nor any delay on the part of a
party to exercise any right, remedy, power or privilege under this Agreement shall operate as a
waiver thereof, nor shall any single or partial exercise of any right, remedy, power or privilege
preclude any other or further exercise of the same or of any other right, remedy, power or
privilege, nor shall any waiver of any right, remedy, power or privilege with respect to any
occurrence be construed as a waiver of such right, remedy, power or privilege with respect to any
other occurrence. No waiver shall be effective unless it is in writing and is signed by the party
asserted to have granted such waiver.

     30. Gender. Words used herein regardless of the number and gender specifically used,
shall be deemed and construed to include any other number, singular or plural, and any other
gender, masculine, feminine or neuter, as the context requires.

     31. Titles Not to Affect Interpretation. The titles of Sections and subsections
contained in this Agreement are for convenience only, and they neither form a part of this
Agreement nor are they to be used in the construction or interpretation hereof.

23

 

     32. Execution in Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be deemed to be an original as against any party whose signature
appears thereon, and all of which shall together constitute one and the same instrument. This
Agreement shall become binding when one or more counterparts hereof, individually or taken
together, shall bear the signatures of all of the parties reflected hereon as the signatories.

     33. Name. W.P. Carey & Co. LLC has a proprietary interest in the name “Corporate
Property Associates” and “CPA®.” Accordingly, and in recognition of this right, if at any time
CPA: 17 ceases to retain Carey Asset Management Corp., or an Affiliate thereof to perform the
services of Advisor, CPA: 17 will, promptly after receipt of written request from Carey Asset
Management Corp., cease to conduct business under or use the name “Corporate Property Associates”
or “CPA®” or any diminutive thereof and CPA: 17 shall use its best efforts to change the name of
CPA: 17 to a name that does not contain the name “Corporate Property Associates” or “CPA®” or any
other word or words that might, in the sole discretion of the Advisor, be susceptible of indication
of some form of relationship between CPA: 17 and the Advisor or any Affiliate thereof. Consistent
with the foregoing, it is specifically recognized that the Advisor or one or more of its Affiliates
has in the past and may in the future organize, sponsor or otherwise permit to exist other
investment vehicles (including vehicles for investment in real estate) and financial and service
organizations having “Corporate Property Associates” or “CPA®” as a part of their name, all without
the need for any consent (and without the right to object thereto) by CPA: 17 or its Directors.

     34. Initial Investment. The Advisor has contributed to CPA: 17 $200,000 in exchange
for 22,222 Shares (the “Initial Investment”). The Advisor or its Affiliates may not sell
any of the Shares purchased with the Initial Investment during the term of this Agreement. The
restrictions included above shall not continue to apply to any Shares other than the Share acquired
through the Initial Investment acquired by the Advisor or its Affiliates. The Advisor shall not
vote any Shares it now owns or hereafter acquires in any vote for the election of Directors or any
vote regarding the approval or termination of any contract with the Advisor or any of its
Affiliates.

24

 

     IN WITNESS WHEREOF, the parties hereto have executed this Advisory Agreement as of the day and
year first above written.

	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 
	 	 	CORPORATE PROPERTY ASSOCIATES 17 - GLOBAL INCORPORATED	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	 	 	Name: Gordon F. DuGan	 	 
	 

	 	 	 	Title: Chief Executive Officer	 	 
	 
	 	 	 	 	 	 
	 	 	CAREY ASSET MANAGEMENT CORP.	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	 	 	Name: Gordon F. DuGan	 	 
	 

	 	 	 	Title: President and Chief Executive Officer	 	 
	 
	 	 	 	 	 	 
	 	 	CPA®:17 LIMITED PARTNERSHIP	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	 	 	Name:	 	 
	 

	 	 	 	Title:	 	 

 

 

SCHEDULE A

     This Schedule sets forth the terms governing any Shares issued by CPA: 17 to the Advisor in
payment of advisory fees set forth in the Agreement.

     1. Restrictions. The Shares are subject to vesting over a five-year period. The
Shares shall vest ratably over a five-year period with 20% of the Shares paid in each payment
vesting on each of the first through fifth anniversary of the date hereof. Prior to the vesting of
the ownership of the Shares in the Advisor, the Shares may not be transferred by the Advisor.

     2. Immediate Vesting. Upon the expiration of the Agreement for any reason other than
a termination for Cause under paragraph 17 or upon a “Change of Control” of CPA®:17 (as defined
below), all Shares granted to the Advisor hereunder shall vest immediately and all restrictions
shall lapse. For purposes of this Schedule A, a “Change of Control” of CPA: 17 shall be deemed to
have occurred if there has been a change in the ownership of CPA: 17 of a nature that would be
required to be reported in response to the disclosure requirements of Schedule 14A of Regulation
14A promulgated under the Securities Exchange Act of 1934, as amended (the “Exchange Act”),
as enacted and in force on the date hereof, whether or not CPA: 17 is then subject to such
reporting requirements; provided, however, that, without limitation, a Change of Control shall be
deemed to have occurred if:

     (i) any “person,” as such term is used in Sections 13(d) and 14(d) of the
Exchange Act (other than CPA: 17, any of its subsidiaries, any trustee, fiduciary or
other person or entity holding securities under any employee benefit plan of CPA: 17
or any of its subsidiaries), together with all “affiliates” and “associates” (as
such terms are defined in Rule 14b-2 under the Exchange Act) of such person, shall
become the “beneficial owner” (as such term is defined in Rule 13d-3 under the
Exchange Act), directly or indirectly, of securities of CPA: 17 representing 25% or
more of either (A) the combined voting power of CPA: 17’s then outstanding
securities having the right to vote in an election of the Board (“Voting
Securities”) or (B) the then outstanding common stock of CPA: 17 (in either such
case other than as a result of acquisition of securities directly from CPA: 17);

     (ii) persons who, as of the date hereof, constitute the Board (the
“Incumbent Directors”) cease for any reason, including without limitation,
as a result of a tender offer, proxy contest, merger or similar transaction, to
constitute at least a majority of the Board, provided that any person becoming a
director of CPA: 17 subsequent to the date hereof whose election or nomination for
election was approved by a vote of at least a majority of the Incumbent Directors
shall be considered an Incumbent Director; or

     (iii) the stockholders of CPA: 17 shall approve (A) any consolidation or merger
of CPA: 17 or any subsidiary where the stockholders of CPA: 17, immediately prior to
the consolidation or merger, would not, immediately after the consolidation or
merger, beneficially own (as such term is defined in Rule 13d-3 under the Exchange
Act), directly or indirectly, shares representing in the aggregate 50% or more of
the voting equity of the entity issuing cash or securities in the consolidation or
merger (or of its ultimate parent entity, if any), (B) any sale, lease, exchange or
other transfer (in one transaction or a series of transactions contemplated or
arranged by any party as a single plan) of all or substantially all of the assets of
CPA: 17 or (C) any plan or proposal for the liquidation or dissolution of CPA: 17.

Schedule A-1

 

 

     Notwithstanding the foregoing, a “Change of Control” shall not be deemed to have
occurred for purposes of the foregoing clause (i) solely as the result of an acquisition of
securities by CPA: 17 which, by reducing the number of Shares of Common Stock outstanding,
increases (A) the proportionate number of Shares beneficially owned by any person to 25% or more of
the Shares then outstanding, or (B) the proportionate voting power represented by the Shares
beneficially owned by any person to 25% or more of the combined voting power of all then
outstanding voting Securities; provided, however, that if any person referred to in clause (A) or
(B) of this sentence shall thereafter become the beneficial owner of any additional Shares or other
Voting Securities (other than pursuant to a Share split, Share dividend, or similar transaction),
then a “Change of Control” shall be deemed to have occurred for purposes of the foregoing clause
(i).

     3. Exception. Notwithstanding anything else in this Agreement to the contrary, the
Shares shall continue to vest according to the vesting schedule in Section 1 regardless of: (a)
the expiration of the Advisory Agreement for any reason other than a termination by CPA:17 for
Cause or a resignation by the Advisor for other than Good Reason, (b) the merger of CPA: 17 and an
Affiliate of CPA: 17 or (c) any “Change of Control” of CPA: 17 in connection with a merger with an
Affiliate of CPA: 17.

Schedule A-2EX-10.5

 

Exhibit 10.5

AGREEMENT OF LIMITED PARTNERSHIP

OF

CPA:17 LIMITED PARTNERSHIP

     THIS AGREEMENT OF LIMITED PARTNERSHIP OF CPA:17 LIMITED PARTNERSHIP, a Delaware limited
partnership (the “Partnership”), dated as of                     , 2007 (the “Effective Date”), is
entered into by and among Corporate Property Associates 17 — Global Incorporated, a Maryland
corporation holding both general partner and limited partner interests in the Partnership (the
“General Partner”), and Carey Holdings LLC, a Delaware limited liability company holding a
special general partner interest in the Partnership (the “Special General Partner”),
together with any other Persons who become Partners in the Partnership as provided herein.

     WHEREAS, the Partnership was formed when a Certificate of Limited Partnership was filed and
accepted by the Secretary of State of the State of Delaware; and

     WHEREAS, the General Partner proposes to effect an initial offering of its common stock and to
contribute the net proceeds of the offering to the Partnership to cause the Partnership to fund (i)
certain acquisitions and investments, (ii) working capital requirements, (iii) redemptions of
interests in the Partnership, and (iv) repayment of indebtedness incurred under various financing
instruments.

     NOW, THEREFORE, BE IT RESOLVED, that for good and adequate consideration, the receipt of which
is hereby acknowledged, the parties hereto agree as follows:

ARTICLE 1.

DEFINED TERMS

Section 1.1 Definitions.

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

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

     “Additional Funds” shall have the meaning set forth in Section 4.3.A.

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

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

	 	(i)	 	such deficit shall be decreased by any amounts which such
Partner is obligated to restore pursuant to this Agreement
or is deemed to be obligated to restore pursuant to
Regulations Section 1.704-1(b)(2)(ii)(c) or the
penultimate sentence of each of Regulations Sections
1.704-2(i)(5) and 1.704-2(g)(1); and
	 
	 	(ii)	 	such deficit shall be increased by the items described in
Regulations Section 1.704-1(b)(2)(ii)(d)(4), (5) and (6).

     The foregoing definition of Adjusted Capital Account Deficit is intended to comply with the
provisions of Regulations Section 1.704-1(b)(2)(ii)(d) and shall be interpreted consistently
therewith. A positive balance in a Partner’s Capital Account, after giving effect to the
adjustments described above in clauses (i) and (ii), is referred to in this Agreement as an
“Adjusted Capital Account Balance.”

     “Adjustment Date” means, with respect to any Capital Contribution, the close of
business on the Business Day last preceding the date of the Capital Contribution, provided,
that if such Capital

 

 

Contribution is being made by the General Partner in respect of the
proceeds from the issuance of REIT Shares (or the issuance of the General Partner’s securities
exercisable for, convertible into or exchangeable for REIT Shares), then the Adjustment Date shall
be as of the close of business on the Business Day last preceding the date of the issuance of such
securities.

     “Advisor” means Carey Asset Management Corp., a Delaware corporation.

     “Advisory Agreement” means that certain Advisory Agreement between the Advisor and the
General Partner entered into contemporaneously with this Agreement.

     “Affiliate” means, with respect to any Person, any Person directly or indirectly
controlling, controlled by or under common control with such Person. Control of 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.

     “Agreed Value” means (i) in the case of any Contributed Property set forth in Exhibit
A and as of the time of its contribution to the Partnership, the Agreed Value of such property as
set forth in Exhibit A; (ii) in the case of any Contributed Property not set forth in Exhibit A and
as of the time of its contribution to the Partnership, the fair market value of such property or
other consideration as determined by the General Partner, reduced by any liabilities either assumed
by the Partnership upon such contribution or to which such property is subject when contributed;
and (iii) in the case of any property distributed to a Partner by the Partnership, the fair market
value of such property as determined by the General Partner at the time such property is
distributed, reduced by any liabilities either assumed by such Partner upon such distribution or to
which such property is subject at the time of the distribution as determined under Section 752 of
the Code and the Regulations thereunder.

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

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

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

     “Available Cash” means, with respect to any period for which such calculation is being
made, the operating cash flow of the Partnership as determined in the reasonable discretion of the
General Partner in accordance with United States generally accepted accounting principles, taking
into account all cash available for distribution from all sources, and to the extent appropriate,
the operating cash flow of any entity in which the Partnership owns an interest multiplied by the
percentage ownership of such entity by the Partnership.

     “Available Cash from Long-Term Net Leased Properties” means that portion of Available
Cash attributable to long-term, net leased properties, as determined by the General Partner in its
reasonable discretion.

     “Available Cash from Real Estate Related Loans” means that portion of Available Cash
attributable to the Partnership’s investments in B notes, mortgage backed securities and real
estate related loans, as determined by the General Partner in its reasonable discretion.

-2-

 

     “Available Cash from Real Estate Securities” means that portion of Available Cash
attributable to the Partnership’s investments in readily marketable real estate securities (other
than investments in B notes, mortgage backed securities and real estate related loans), as
determined by the General Partner in its reasonable discretion.

     “Available Residual Cash” means Available Cash, other than (i) Available Cash from
Long-Term Net Leased Properties, (ii) Available Cash from Real Estate Related Loans, and (iii)
Available Cash from Real Estate Securities.

     “Business Day” means any day except a Saturday, Sunday or other day on which
commercial banks in New York, New York are authorized or required by law to be closed.

     “Capital Account” means, with respect to any Partner, the Capital Account maintained
for such Partner in accordance with the following provisions:

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

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

     (c) In the event any interest in the Partnership is transferred in accordance with the terms
of this Agreement, the transferee shall succeed to the Capital Account of the transferor to the
extent it relates to the transferred interest.

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

     (e) The foregoing provisions and the other provisions of this Agreement relating to the
maintenance of Capital Accounts are intended to comply with Regulations Sections 1.704-1(b) and
1.704-2, 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, provided
that it is not likely to have a material effect on the amounts distributable to any Person
pursuant to Article 13 of this 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 1.704-1(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
1.704-1(b) or Section 1.704-2.

     “Capital Contribution” means, with respect to any Partner, the amount of money and the
initial Gross Asset Value of any property (other than money) contributed to the Partnership by such
Partner (net of any liabilities assumed by the Partnership relating to such property and any
liability to which such property is subject).

-3-

 

     “Capital Proceeds” means the gross receipts received by the Partnership from a Capital
Transaction, less any expenses related to the Capital Transaction.

     “Capital Transaction” means any transaction outside the ordinary course of the
Partnership’s business involving the sale, exchange, other disposition, or refinancing of any
Partnership asset.

     “Cash Amount” means, with respect to any OP Units subject to a Redemption, an amount
of cash equal to the Deemed Partnership Interest Value attributable to such OP Units.

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

     “Change of Control” shall be deemed to have occurred at such time as (i) the date a
“person” or “group” (within the meaning of Sections 13(d) and 14(d) of the Exchange Act) becomes
the ultimate “beneficial owner” (as defined in Rules 13d-3 and 13d-5 under the Exchange Act, except
that a person or group shall be deemed to have beneficial ownership of all shares of voting stock
that such person or group has the right to acquire regardless of when such right is first
exercisable), directly or indirectly, of voting stock representing more than 50% of the total
voting power of the total voting stock of the General Partner; (ii) the date the General Partner
sells, transfers or otherwise disposes of all or substantially all of its assets; or (iii) the date
of the consummation of a merger or share exchange of the General Partner with another entity where
the General Partner’s stockholders immediately prior to the merger or share exchange would not
beneficially own, immediately after the merger or share exchange, shares representing 50% or more
of all votes (without consideration of the rights of any class of stock to elect directors by a
separate group vote) to which all stockholders of the corporation issuing cash or securities in the
merger or share exchange would be entitled in the election of directors, or where members of the
board of directors of the General Partner immediately prior to the merger or share exchange would
not immediately after the merger or share exchange constitute a majority of the board of directors
of the corporation issuing cash or securities in the merger or share exchange.

     “Charter” means the Articles of Incorporation of the General Partner filed with the
State Department of Assessments and Taxation of Maryland on February 9, 2007, as amended or
restated from time to time.

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

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

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

     “Consent of the Partners” means the Consent of Partners holding Percentage Interests
that in the aggregate are equal to or greater than fifty percent (50%) of the aggregate Percentage
Interests of all Partners, which Consent shall be obtained prior to the taking of any action for
which it is required by this Agreement and may be given or withheld by such Partners, in their sole
and absolute discretion.

     “Constructively Own” means ownership under the constructive ownership rules described
in Exhibit C.

-4-

 

     “Contributed Property” means each property or other asset, in such form as may be
permitted by the Act, but excluding cash, contributed or deemed contributed to the Partnership.

     “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, guarantees and other similar instruments guaranteeing
payment or other performance of obligations by such Person; (iii) all indebtedness for borrowed
money or for the deferred purchase price of property or services secured by any lien on any
property owned by such Person, to the extent attributable to such Person’s interest in such
property, even though such Person has not assumed or become liable for the payment thereof; and
(iv) lease obligations of such Person which, in accordance with generally accepted accounting
principles, should be capitalized.

     “Deemed Partnership Interest Value” means, as of any date with respect to any class of
Partnership Interests, the Deemed Value of the Partnership Interests of such class multiplied by
the Partner’s relative Percentage Interest of such class.

     “Deemed Value of the Partnership Interests” means, as of any date with respect to any
class or series of Partnership Interests, (i) the total number of OP Units of the General Partner
issued and outstanding as of the close of business on such date multiplied by the Fair Market Value
determined as of such date of a share of common stock of the General Partner which corresponds to
such Partnership Interest, as adjusted (x) pursuant to Section 7.5 (in the event the
General Partner acquires material assets, other than on behalf of the Partnership) and (y) for
stock dividends and distributions, stock splits and subdivisions, reverse stock splits and
combinations, distribution of warrants or options and distributions of evidences of indebtedness or
assets not received by the General Partner pursuant to a pro rata distribution by the Partnership;
(ii) divided by the Percentage Interest of the General Partner on such date;
provided, that if no outstanding shares of capital stock of the General Partner
correspond to a class or series of Partnership Interests, the Deemed Value of the Partnership
Interests with respect to such class or series shall be equal to an amount reasonably determined by
the General Partner.

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

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

     “Exchange Act” means the Securities Exchange Act of 1934, as amended, and the rules
and regulations of the Securities and Exchange Commission promulgated thereunder and any successor
statute thereto.

     “Fair Market Value” means, with respect to any share of capital stock of the General
Partner, (i) if such shares are listed or admitted to trading on any securities exchange or the
Nasdaq National Market, the average of the daily market price for the ten (10) consecutive trading
days immediately preceding the date with respect to which “Fair Market Value” must be determined
hereunder or, if such date is not a Business
Day, the immediately preceding Business Day, using as the market price for each such trading day
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, or (ii) if such shares are not listed or
admitted to trading on any securities exchange or the Nasdaq National Market, the price at which
such shares are then being offered to

-5-

 

the public pursuant to any public offering of the General
Partner or pursuant to its distribution reinvestment plan (before giving effect to any discounts in
effect and made available to participants in such plan); provided that, if there is
no ongoing public offering or if the General Partner is not then offering its shares pursuant to a
distribution reinvestment plan, the Fair Market Value of such shares shall be determined by the
General Partner acting in good faith on the basis of the most recent, publicly reported net asset
value of the General Partner and other information as it considers, in its reasonable judgment,
appropriate. In the event the REIT Shares Amount for such shares includes rights that a holder of
such shares would be entitled to receive, then the Fair Market 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; and provided,
further that, in connection with determining the Deemed Value of the Partnership
Interests for purposes of determining the number of additional OP Units issuable upon a Capital
Contribution funded by an underwritten public offering of shares of capital stock of the General
Partner, the Fair Market Value of such shares shall be the public offering price per share of such
class of capital stock sold. Notwithstanding the foregoing, the General Partner in its reasonable
discretion may use a different “Fair Market Value” for purposes of making the determinations under
subparagraph (b) of the definition of “Gross Asset Value” and Section 4.3.D in connection
with the contribution of Property or cash to the Partnership by a third party, provided
such value shall be based upon the value per REIT Share (or per OP Unit) agreed upon by the General
Partner and such third party for purposes of such contribution.

     “General Partner Interest” means a Partnership Interest held by the General Partner. A
General Partner Interest may be expressed as a number of OP Units.

     “General Partner Net Current Investment” means the General Partner’s total Capital
Contributions then paid to the Partnership, plus the amount of any Partnership liabilities assumed
by the General Partner (or which are secured by Partnership property distributed to the General
Partner), less (i) the amount of any liabilities of the General Partner assumed by the Partnership
(or which are secured by property contributed by the General Partner to the Partnership), (ii) all
amounts actually distributed to the General Partner pursuant to Section 5.1.B(2), and (iii)
all amounts representing a return of capital to the General Partner, including, but not limited to,
the portion of any redemption proceeds distributed to the General Partner pursuant to Section
11.8 which represents a return of capital to the General Partner.

     “General Partner Priority Return” means an amount equal to six percent (6%) per annum
of the Weighted Average General Partner Net Current Investment, payable to the General Partner
annually on a cumulative basis.

     “General Partner Unpaid Priority Return” means the excess, if any, of the General
Partner Priority Return over all amounts previously paid to the General Partner under Section
5.1.A, or paid in respect of the General Partner Priority Return under Section 5.1.B(1)
as of the time in question.

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

     (a) The initial Gross Asset Value of any asset contributed by a Partner to the Partnership
shall be the gross fair market value of such asset, as determined by the contributing Partner and
the General Partner (as set forth on Exhibit A attached hereto, as such Exhibit may be amended from
time to time); provided, that if the contributing Partner is the General Partner,
then, except with respect to the General Partner’s initial Capital Contribution which shall be
determined as set forth on Exhibit A, the determination of the fair market value of the contributed
asset shall be determined (i) by the price paid by the General Partner if the asset is acquired by
the General Partner contemporaneously with its contribution to the Partnership, (ii) by Appraisal,
if otherwise acquired by the General Partner, (iii) by the amount of cash if the asset is cash, and
(iv) as reasonably determined by the General Partner if the asset is REIT Shares or other shares of
capital stock of the General Partner.

-6-

 

     (b) The Gross Asset Values of all Partnership assets shall be adjusted to equal their
respective gross fair market values, as determined by the General Partner using such reasonable
method of valuation as it may adopt, provided, however, that for such purpose, the
net value of all of the Partnership assets, in the aggregate, shall be equal to the Deemed Value of
the Partnership Interests of all classes of Partnership Interests then outstanding, regardless of
the method of valuation adopted by the General Partner, immediately prior to the times listed
below:

	 	(i)	 	the acquisition of an additional interest in the
Partnership by a new or existing Partner in
exchange for more than a de minimis Capital
Contribution, if the General Partner reasonably
determines that such adjustment is necessary or
appropriate to reflect the relative economic
interests of the Partners in the Partnership;
	 
	 	(ii)	 	the distribution by the Partnership to a Partner
of more than a de minimis amount of Partnership
property as consideration for an interest in the
Partnership if the General Partner reasonably
determines that such adjustment is necessary or
appropriate to reflect the relative economic
interests of the Partners in the Partnership;
	 
	 	(iii)	 	the liquidation of the
Partnership within the meaning of
Regulations Section
1.704-1(b)(2)(ii)(g);
	 
	 	(iv)	 	at such other times as the
General Partner shall reasonably
determine necessary or advisable
in order to comply with
Regulations Sections 1.704-1(b)
and 1.704-2; and
	 
	 	(v)	 	in connection with the grant of
an interest in the Partnership
(other than a de minimis
interest) as consideration for
the provision of services to or
for the benefit of the
Partnership by an existing
Partner acting in a partner
capacity or by a new Partner
acting in a partner capacity or
in anticipation of becoming a
Partner.

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

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

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

     “Immediate Family” means, with respect to any natural Person, such natural Person’s
estate or heirs or current spouse or former spouse, parents, parents-in-law, children (whether
natural, adopted or by marriage), siblings and grandchildren and any trust or estate, all of the
beneficiaries of which consist of such Person or such Person’s spouse or former spouse, parents,
parents-in-law, children, siblings or grandchildren.

     “Incapacity” or “Incapacitated” means, (i) as to any individual Partner,
death, total physical disability or entry by a court of competent jurisdiction adjudicating him or
her incompetent to manage his or her Person or his or her 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

-7-

 

which is a Partner, the dissolution and
commencement of winding up of the partnership; (iv) as to any estate which is a Partner, the
distribution by the fiduciary of the estate’s entire interest in the Partnership; (v) as to any
trustee of a trust which is a Partner, the termination of the trust (but not the substitution of a
new trustee); or (vi) as to any Partner, the bankruptcy of such Partner. For purposes of this
definition, bankruptcy of a Partner shall be deemed to have occurred when (a) the Partner commences
a voluntary proceeding seeking liquidation, reorganization or other relief under any bankruptcy,
insolvency or other similar law now or hereafter in effect, (b) the Partner is adjudged as bankrupt
or insolvent, or a final and nonappealable order for relief under any bankruptcy, insolvency or
similar law now or hereafter in effect has been entered against the Partner, (c) the Partner
executes and delivers a general assignment for the benefit of the Partner’s creditors, (d) the
Partner files an answer or other pleading admitting or failing to contest the material allegations
of a petition filed against the Partner in any proceeding of the nature described in clause (b)
above, (e) the Partner seeks, consents to or acquiesces in the appointment of a trustee, receiver
or liquidator for the Partner or for all or any substantial part of the Partner’s properties, (f)
any proceeding seeking liquidation, reorganization or other relief under any bankruptcy, insolvency
or other similar law now or hereafter in effect has not been dismissed within 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 90 days of such appointment,
or (h) an appointment referred to in clause (g) is not vacated within 90 days after the expiration
of any such stay.

     “Indemnitee” means (i) any Person subject to a claim or demand or made or threatened
to be made a party to, or involved or threatened to be involved in, an action, suit or proceeding
by reason of his or her status as (A) the General Partner or (B) a director, officer or employee of
the Partnership or the General Partner, and (ii) such other Persons (including Affiliates of the
General 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.

     “Investments” means investments made by the Partnership, directly or indirectly, in a
Property, Loan or Other Permitted Investment Asset.

     “IRS” means the United States Internal Revenue Service.

     “Limited Partner” means any Person named as a Limited Partner in Exhibit A attached
hereto, as such Exhibit may be amended from time to time, or any Substituted Limited Partner or
Additional Limited Partner, in such Person’s capacity as a Limited Partner in the Partnership.

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

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

     “Loans” means notes and other evidences of indebtedness or obligations acquired,
originated or entered into, directly or indirectly, by the Partnership as lender, noteholder,
participant, note purchaser or other capacity, including but not limited to first or subordinate
mortgage loans, construction loans, development loans, loan participations, B notes, loans secured
by capital stock or any other assets or form of equity interest and any other type of loan or
financial arrangement, such as providing or arranging for letters of credit, providing guarantees
of obligations to third parties, or providing commitments for loans. Loans shall not include
leases which are not recognized as leases for federal income tax reporting purposes.

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

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     “Majority in Interest of the Limited Partners” means Limited Partners holding in the
aggregate Percentage Interests that are greater than fifty percent (50%) of the aggregate
Percentage Interests of all Limited Partners.

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

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

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

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

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

     (e) 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;

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

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

     “Net Income from a Capital Transaction” means that portion of Net Income attributable
to a Capital Transaction.

     “Net Income from Long-Term Net Leased Properties” means that portion of Net Income
attributable to long-term, net leased properties, as determined by the General Partner in its
reasonable discretion.

     “Net Income from Real Estate Related Loans” means that portion of Net Income
attributable to the Partnership’s investments in B notes, mortgage backed securities and real
estate related loans, as determined by the General Partner in its reasonable discretion.

-9-

 

     “Net Income from Real Estate Securities” means that portion of Net Income attributable
to the Partnership’s investments in readily marketable real estate securities (other than B notes,
mortgage backed securities and real estate related loans), as determined by the General Partner in
its reasonable discretion.

     “Net Loss from a Capital Transaction” means that portion of Net Loss attributable to a
Capital Transaction.

     “Net Residual Income” means Net Income, other than (i) Net Income from Long-Term Net
Leased Properties, (ii) Net Income from Real Estate Related Loans, and (iii) Net Income from Real
Estate Securities.

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

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

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

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

     “OP Unit” means a fractional share of the Partnership Interests of all Partners issued
pursuant to Article 4.

     “Other Permitted Investment Asset” means assets, other than cash, cash equivalents,
short term bonds, auction rate securities and similar short term investments, acquired by the
Partnership for investment purposes that is not a Loan or a Property and is consistent with the
investment objectives and policies of the Partnership.

     “Partner” means a General Partner, a Special General Partner, or a Limited Partner,
and “Partners” means the General Partner, the Special 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” shall have the meaning set forth in Regulations Section
1.704-2(b)(4).

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

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

     “Partnership Interest” means, an ownership interest in the Partnership of either a
Limited Partner, the Special General Partner, or the General Partner and includes any and all
benefits to which the holder of

-10-

 

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. There may be one or more classes or series of Partnership Interests as provided in
Section 4.3. Except as otherwise provided for in this Agreement, a Partnership Interest may
be expressed as a number of OP Units. Unless otherwise expressly provided for in this Agreement or
by the General Partner at the time of the original issuance of any Partnership Interests, all
Partnership Interests (whether of a Limited Partner, a Special General Partner or a General
Partner) shall be of the same class or series.

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

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

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

     “Percentage Interest” means, as to a Partner holding a class or series of Partnership
Interests, its interest as determined, as of the first day of each Partnership Year, by dividing
such Partner’s Adjusted Capital Account Balance by aggregate Adjusted Capital Account Balances of
all Partners. For purposes of the preceding sentence, the Adjusted Capital Account Balances of the
Partners shall be determined after giving effect to all allocations of Net Income and Net Loss for
all preceding Partnership Years, including allocations of Net Income and Net Loss resulting from
adjustments to the Gross Asset Value of the Partnership’s assets pursuant to the definition of
Gross Asset Value.

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

     “Plan Asset Regulation” means the regulations promulgated by the United States
Department of Labor in Title 29, Code of Federal Regulations, Part 2510, Section 101.3, and any
successor regulations thereto.

     “Pledge” shall have the meaning set forth in Section 11.3.A.

     “Property” or “Properties” means a partial or entire interest in real property
(including leasehold interests) and personal or mixed property connected therewith. An Investment
which obligates the Partnership to acquire a Property will be treated as a Property for purposes of
this Agreement.

     “Qualifying Party” means (a) an Additional Limited Partner; (b) a Family Member, or a
lending institution as the pledgee of a Pledge, who is the transferee in a Permitted Transfer; or
(c) a Substituted Limited Partner succeeding to all or part of the Limited Partner Interest of (i)
an Additional Limited Partner or (ii) a Family Member, or a lending institution who is the pledgee
of a Pledge, who is the transferee in a Permitted Transfer.

     “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.

     “Qualified Transferee” means an “Accredited Investor” as such term is defined in Rule
501 promulgated under the Securities Act.

     “Redemption” shall have the meaning set forth in Section 8.6.A.

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     “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).

     “Regulatory Allocations” shall have the meaning set forth in Section 6.3.

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

     “REIT Requirements” shall have the meaning set forth in Section 5.1.

     “REIT Share” means a share of common stock, par value $0.001 per share, of the General
Partner.

     “REIT Shares Amount” means, as of any date, an aggregate number of REIT Shares equal
to the number of Tendered Units, as adjusted (x) pursuant to Section 7.5 (in the event the
General Partner acquires material assets, other than on behalf of the Partnership) and (y) for
stock dividends and distributions, stock splits and subdivisions, reverse stock splits and
combinations, distributions of rights, warrants or options, and distributions of evidences of
indebtedness or assets relating to assets not received by the General Partner pursuant to a
pro rata distribution by the Partnership.

     “Securities Act” means the Securities Act of 1933, as amended, and the rules and
regulations of the Securities and Exchange Commission promulgated thereunder and any successor
statute thereto.

     “Special General Partner Interest” means a Partnership Interest held by the Special
General Partner. A Special General Partner Interest may be expressed as a number of OP Units, but
only to the extent that the Special General Partner makes Capital Contributions to the Partnership.

     “Specified Redemption Date” means the day of receipt by the General Partner of a
Notice of Redemption.

     “Subsidiary” means, with respect to any Person, any corporation, partnership, limited
liability company, 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.

     “Subsidiary Partnership” means any partnership or limited liability company that is a
Subsidiary of the Partnership.

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

     “Tax Items” shall have the meaning set forth in Section 6.4.A.

     “Tenant” means any tenant from which the General Partner derives rent either directly
or indirectly through partnerships, including the Partnership, or Qualified REIT Subsidiaries.

     “Tendered Units” shall have the meaning set forth in Section 8.6.A.

     “Tendering Partner” shall have the meaning set forth in Section 8.6.A.

     “Weighted Average General Partner Net Current Investment” means the annual average
balance of the General Partner Net Current Investment computed on a daily basis.

-12-

 

ARTICLE 2.

ORGANIZATIONAL MATTERS

Section 2.1 Organization

     The Partnership is a limited partnership formed pursuant to the provisions of the Act and upon
the terms and conditions 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.

Section 2.2 Name

     The name of the Partnership is CPA:17 Limited Partnership. The Partnership’s business may be
conducted under any other name or names deemed advisable by the General Partner, including the name
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 name and address of the registered office and registered agent of the Partnership
                                                            . The principal office of the Partnership is located at 50
Rockefeller Plaza, New York, New York 10020, or such other place as the General Partner may from
time to time designate by notice to the other 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 Power of Attorney

  A. Each Limited Partner and each Assignee constitutes and appoints 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 and all amendments or restatements thereof) that the General Partner
or the Liquidator deems appropriate or necessary to form, qualify or continue the existence or
qualification of the Partnership as a limited partnership (or a partnership in which the Limited
Partners have limited liability) 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 deems appropriate or necessary to reflect any amendment, change, modification or
restatement of this Agreement in accordance with its terms; (c) all conveyances and other
instruments 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, Articles 11, 12 or 13 or the Capital Contribution of
any Partner; and (e) all certificates, documents and other instruments relating to the
determination of the rights, preferences and privileges of Partnership Interests; and

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

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or appropriate or necessary, in the sole discretion of the General Partner or any Liquidator, to
effectuate the terms or intent of this Agreement. Nothing contained herein shall be construed as
authorizing the General Partner or any Liquidator to amend this Agreement except in accordance with
Article 14 or as may be otherwise expressly provided for in this Agreement.

     B. The foregoing power of attorney is hereby declared to be irrevocable and a 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 and 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 OP 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
any Liquidator, within 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 2.5 Term

     The term of the Partnership commenced on the date of its formation and the Partnership shall
have a perpetual existence unless it is dissolved pursuant to the provisions of Article 13
or as otherwise provided by law.

ARTICLE 3.

PURPOSE

Section 3.1 Purpose and Business

     The purpose and nature of the business to be conducted by the Partnership is to (i) conduct
any business that may be lawfully conducted by a limited partnership organized pursuant to the Act,
(ii) enter into any partnership, joint venture or other similar arrangement to engage in any
business described in the foregoing clause (i) or to own interests in any entity engaged, directly
or indirectly, in any such business and (iii) do anything necessary or incidental to the foregoing,
provided, however, that such business shall be limited to and conducted in such a
manner as to permit the General Partner at all times to be classified as a REIT for federal income
tax purposes, unless the General Partner ceases to qualify as a REIT for reasons other than the
conduct of the business of the Partnership. In connection with the foregoing, and without limiting
the General Partner’s right in its sole discretion to cease qualifying as a REIT, the Limited
Partners acknowledge that the General Partner’s current status as a REIT inures to the benefit of
all the Limited Partners and not solely the General Partner.

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, notwithstanding anything to the contrary in this
Agreement, the Partnership shall not take, or 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 to continue to qualify as a REIT, (ii) absent the consent of the
General Partner, which

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may be given or withheld in its sole and absolute discretion, could subject the General Partner 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 the General Partner or its
securities, unless any such action (or inaction) under the foregoing clauses (i), (ii) or (iii)
shall have been specifically consented to by the General Partner in writing.

Section 3.3 Partnership Only for Purposes Specified

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

Section 3.4 Representations and Warranties by the Parties

     A. Each Partner that is an individual represents and warrants to each other Partner that (i)
such Partner has the legal capacity to enter into this Agreement and perform such Partner’s
obligations hereunder, (ii) the consummation of the transactions contemplated by this Agreement to
be performed by such Partner will not result in a breach or violation of, or a default under, any
agreement by which such Partner or any of such Partner’s property is or are bound, or any statute,
regulation, order or other law to which such Partner is subject, (iii) such Partner is a “United
States person” within the meaning of Section 7701(a)(30) of the Code, and (iv) this Agreement is
binding upon, and enforceable against, such Partner in accordance with its terms.

     B. Each Partner that is not an individual represents and warrants to each other Partner that
(i) its execution and delivery of this Agreement and all transactions contemplated by this
Agreement to be performed by it have been duly authorized by all necessary action, including
without limitation, that of its general partner(s), committee(s), trustee(s), beneficiaries,
directors and/or stockholder(s), as the case may be, as required, (ii) the consummation of such
transactions shall not result in a breach or violation of, or a default under, its certificate of
limited partnership, partnership agreement, trust agreement, limited liability company operating
agreement, charter or bylaws, as the case may be, any agreement by which such Partner or any of
such Partner’s properties or any of its partners, beneficiaries, trustees or stockholders, as the
case may be, is or are bound, or any statute, regulation, order or other law to which such Partner
or any of such Partner’s properties or any of its partners, trustees, beneficiaries or
stockholders, as the case may be, is or are subject, (iii) such Partner is a “United States person”
within the meaning of Section 7701(a)(30) of the Code and (iv) this Agreement is binding upon, and
enforceable against, such Partner in accordance with its terms.

     C. Each Partner represents, warrants, and agrees that it has acquired and continues to hold
its interest in the Partnership for its own account for investment only and not for the purpose of,
or with a view toward, the resale or distribution of all or any part thereof, nor with a view
toward selling or otherwise distributing such interest or any part thereof at any particular time
or under any predetermined circumstances. Each Partner further represents and warrants that it is a
sophisticated investor, able and accustomed to handling sophisticated financial matters for itself,
particularly real estate investments, and that it has a sufficiently high net worth that it does
not anticipate a need for the funds it has invested in the Partnership in what it understands to be
a highly speculative and illiquid investment. Each Partner represents, warrants and agrees that
such Partner is an “accredited investor” (as such term is defined in Rule 501(a) of Regulation D
under the Securities Act).

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     D. Each Partner acknowledges that (i) the OP Units (and any REIT Shares that might be
exchanged therefor) have not been registered under the Securities Act and may not be transferred
unless they are subsequently registered under the Securities Act or an exemption from such
registration is available (it being understood that the Partnership has no intention of so
registering the OP Units), (ii) a restrictive legend in the form set forth in Exhibit D shall be
placed on the certificates representing the OP Units, and (iii) a notation shall be made in the
appropriate records of the Partnership indicating that the OP Units are subject to restrictions on
transfer.

      E. Each Limited Partner further represents, warrants, covenants and agrees as follows:

           (1) Except as provided in Exhibit E, at any time such Partner actually or Constructively Owns
a 25% or greater capital interest or profits interest in the Partnership, it does not and will not,
without the prior written consent of the General Partner, actually own or Constructively Own (a)
with respect to any Tenant that is a corporation, any stock of such Tenant, and (b) with respect to
any Tenant that is not a corporation, any interests in either the assets or net profits of such
Tenant.

           (2) Except as provided in Exhibit F, at any time such Partner actually or Constructively Owns
a 25% or greater capital interest or profits interest in the Partnership, it does not, and agrees
that it will not without the prior written consent of the General Partner, actually own or
Constructively Own, any stock in the General Partner, other than any REIT Shares or other shares of
capital stock of the General Partner such Partner may acquire as a result of an exchange of
Tendered Units pursuant to Section 8.6, subject to the ownership limitations set forth in
the General Partner’s Charter.

           (3) Upon request of the General Partner, it will disclose to the General Partner the amount of
REIT Shares or other shares of capital stock of the General Partner that it actually owns or
Constructively Owns.

           (4) It understands that if, for any reason, (a) the representations, warranties or agreements
set forth in E(1) or (2) above are violated, or (b) the Partnership’s actual or
Constructive Ownership of REIT Shares or other shares of capital stock of the General Partner
violates the limitations set forth in the Charter, then (x) some or all of the Redemption rights of
the Partners may become non-exercisable, and (y) some or all of the REIT Shares owned by the
Partners may be automatically transferred to a trust for the benefit of a charitable beneficiary,
as provided in the Charter.

           (5) Without the consent of the General Partner, which may be given or withheld in its sole
discretion, no Partner shall take any action that would cause the Partnership at any time to have
more than 100 partners (including as partners those persons indirectly owning an interest in the
Partnership through a partnership, limited liability company, S corporation or grantor trust (such
entity, a “flow through entity”), but only if substantially all of the value of such
person’s interest in the flow through entity is attributable to the flow through entity’s interest
(direct or indirect) in the Partnership).

     F. The representations and warranties contained in Sections 3.4 shall survive the
execution and delivery of this Agreement by each Partner and the dissolution and winding-up of the
Partnership.

     G. Each Partner hereby acknowledges that no representations as to potential profit, cash
flows, funds from operations or yield, if any, in respect of the Partnership or the General Partner
have been made by any Partner or any employee or representative or Affiliate of any Partner, and
that projections and any other information, including, without limitation, financial and
descriptive information and documentation, which may have been in any manner submitted to such
Partner shall not constitute any representation or warranty of any kind or nature, express or
implied.

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Section 3.5 Certain ERISA Matters

           Each Partner acknowledges that the Partnership is intended to qualify as a “real estate
operating company” (as such term is defined in the Plan Asset Regulation). The General Partner may
structure investments in, relationships with and conduct with respect to Investments and any other
assets of the Partnership so that the Partnership will be a “real estate operating company” (as
such term is defined in the Plan Asset Regulation).

ARTICLE 4.

CAPITAL CONTRIBUTIONS

Section 4.1 Capital Contributions of the Partners

           At the time of their respective execution of this Agreement, the Partners shall make or shall
have made Capital Contributions as set forth in Exhibit A to this Agreement. The Partners shall own
OP Units of the class or series and in the amounts set forth in Exhibit A and shall have a
Percentage Interest in the Partnership as set forth in Exhibit A, which Percentage Interest shall
be adjusted in Exhibit A from time to time by the General Partner to the extent necessary to
reflect accurately exchanges, redemptions, Capital Contributions, the issuance of additional OP
Units or similar events having an effect on a Partner’s Percentage Interest. Except as required by
law, as otherwise provided in Sections 4.3, 4.4 and 10.5, or as otherwise
agreed to by a Partner and the Partnership, no Partner shall be required or permitted to make any
additional Capital Contributions or loans to the Partnership.

Section 4.2 Loans by Third Parties

           Subject to Section 4.3, the Partnership may incur Debt, or enter into other similar
credit, guarantee, financing or refinancing arrangements for any purpose (including, without
limitation, in connection with any further acquisition of Investments) with any Person that is not
the General Partner upon such terms as the General Partner determines appropriate; provided
that, the Partnership shall not incur any Debt that is recourse to the General Partner,
except to the extent otherwise agreed to by the General Partner in its sole discretion.

Section 4.3 Additional Funding and Capital Contributions

     A. General. The General Partner may, at any time and from time to time determine that
the Partnership requires additional funds (“Additional Funds”) for the acquisition of
additional Investments or for such other Partnership purposes as the General Partner may determine.
Additional Funds may be raised by the Partnership, at the election of the General Partner, in any
manner provided in, and in accordance with, the terms of this Section 4.3. No Person shall
have any preemptive, preferential or similar right or rights to subscribe for or acquire any
Partnership Interest, except as set forth in this Section 4.3.

     B. Issuance of Additional Partnership Interests. The General Partner, in its sole and
absolute discretion, may raise all or any portion of the Additional Funds by accepting additional
Capital Contributions of cash. The General Partner may also accept additional Capital Contributions
of real property or any other non-cash assets. In connection with any such additional Capital
Contributions (of cash or property), the General Partner is hereby authorized to cause the
Partnership from time to time to issue to Partners (including the General Partner) or other Persons
(including, without limitation, in connection with the contribution of property to the Partnership)
additional OP Units or other Partnership Interests in one or more classes, or one or more series of
any of such classes, with such designations, preferences and relative, participating, optional or
other special rights, powers, and duties, including rights, powers, and duties senior to then
existing Limited Partner Interests, all as shall be determined by the General Partner in its sole
and absolute discretion subject to Delaware law, and as set forth by amendment to this Agreement,
including without limitation, (i) the allocations of items of Partnership income, gain, loss,
deduction, and credit to such class or series of Partnership Interests; (ii) the right of each such
class or series of Partnership Interests to share

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in Partnership distributions; (iii) the rights of each such class or series of Partnership
Interests upon dissolution and liquidation of the Partnership; and (iv) the right to vote,
including, without limitation, the Limited Partner approval rights set forth in Section
11.2.A; provided, that no such additional OP Units or other Partnership
Interests shall be issued to the General Partner unless either (a) (1) the additional Partnership
Interests are issued in connection with the grant, award, or issuance of shares of the General
Partner pursuant to Section 4.3.C below, which shares have designations, preferences, and
other rights (except voting rights) such that the economic interests attributable to such shares
are substantially similar to the designations, preferences and other rights of the additional
Partnership Interests issued to the General Partner in accordance with this Section 4.3.B,
and (2) the General Partner shall make a Capital Contribution to the Partnership in an amount equal
to the net proceeds raised in connection with such issuance, 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. The General Partner’s determination that
consideration is adequate shall be conclusive insofar as the adequacy of consideration relates to
whether the Partnership Interests are validly issued and paid. In the event that the Partnership
issues additional Partnership Interests pursuant to this Section 4.3.B, the General Partner
shall make such revisions to this Agreement (including but not limited to the revisions described
in Section 5.4 and Section 8.6) as it determines are necessary to reflect the
issuance of such additional Partnership Interests. Without limiting the foregoing, the General
Partner is expressly authorized to cause the Partnership to issue OP Units for less than fair
market value, so long as the General Partner concludes in good faith that such issuance of
Partnership Interests is in the best interests of the Partnership.

     C. Issuance of REIT Shares or Other Securities by the General Partner. The General
Partner shall not issue any additional REIT Shares, other shares of capital stock of the General
Partner or New Securities (other than REIT Shares issued pursuant to Section 8.6 or such
shares, stock or securities pursuant to a dividend or distribution (including any stock split) to
all of its stockholders or all of its stockholders who hold a particular class of stock of the
General Partner) unless (i) the General Partner shall cause 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 thereof are substantially similar to those of the REIT Shares, other shares of
capital stock of the General Partner or New Securities issued by the General Partner and (ii) the
General Partner shall make a Capital Contribution of the net proceeds from the issuance of such
additional REIT Shares, other shares of capital stock or New Securities, as the case may be, and
from the exercise of the rights contained in such additional New Securities, as the case may be.
Without limiting the foregoing, the General Partner is expressly authorized to issue REIT Shares,
other shares of capital stock of the General Partner or New Securities for no tangible value or for
less than fair market value, and the General Partner is expressly authorized to cause the
Partnership to issue to the General Partner corresponding Partnership Interests, so long as (x) the
General Partner concludes in good faith that such issuance of Partnership Interests is in the
interests of the Partnership; and (y) the General Partner contributes all proceeds, if any, from
such issuance and exercise to the Partnership. In connection with the General Partner’s initial
offering of REIT Shares, any other issuance of REIT Shares, other capital stock of the General
Partner or New Securities, the General Partner shall contribute to the Partnership, any net
proceeds raised in connection with such issuance; provided, that the General
Partner may use a portion of the net proceeds from any offering to acquire OP Units or other assets
(provided such other assets are contributed to the Partnership pursuant to the terms of this
Agreement; and provided further that if the net proceeds actually received by the
General Partner are less than the gross proceeds of such issuance as a result of any underwriter’s
discount or other expenses paid or incurred in connection with such issuance then, except to the
extent such net proceeds are used to acquire OP Units, the General Partner shall be deemed to have
made a Capital Contribution to the Partnership in the amount equal to the sum of the net proceeds
of such issuance plus the amount of such underwriter’s discount and other expenses paid by the
General Partner (which discount and expense shall be treated as an expense for the benefit of the
Partnership for purposes of Section 7.4)).

     D. Percentage Interest Adjustments in the Case of Capital Contributions for OP Units.
Upon the acceptance of additional Capital Contributions in exchange for OP Units, the Percentage
Interest in such OP Units shall be equal to a fraction, the numerator of which is equal to the
amount of cash and the Agreed

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Value of the Property contributed as of the time such additional Capital Contributions are made (an
“Adjustment Date”) and the denominator of which is equal to the sum of (i) the Deemed Value
of the Partnership Interests of such class or series (computed as of the Business Day immediately
preceding the Adjustment Date) and (ii) the aggregate Agreed Value of additional Capital
Contributions contributed by all Partners and/or third parties to the Partnership on such
Adjustment Date in such class or series of Partnership Interests. The Percentage Interest of each
other Partner holding Partnership Interests of such class or series not making a full pro
rata Capital Contribution shall be adjusted to equal a fraction, the numerator of which is
equal to the sum of (i) the Deemed Partnership Interest Value of such Limited Partner in respect of
such class or series (computed as of the Business Day immediately preceding the Adjustment Date)
and (ii) the Agreed Value of additional Capital Contributions, if any, made by such Partner to the
Partnership in such class or series of Partnership Interests as of such Adjustment Date, and the
denominator of which is equal to the sum of (i) the Deemed Value of the Partnership Interests of
such class or series (computed as of the Business Day immediately preceding the Adjustment Date),
plus (ii) the aggregate Agreed Value of additional Capital Contributions contributed by all
Partners and/or third parties to the Partnership on such Adjustment Date in such class or series.
Provided, however, solely for purposes of calculating a Partner’s Percentage Interest pursuant to
this Section 4.3.D, (i) in the case of cash Capital Contributions by the General Partner
funded by an offering of REIT Shares or other shares of capital stock of the General Partner and
(ii) in the case of the contribution of properties by the General Partner which were acquired by
the General Partner in exchange for REIT Shares or other shares of capital stock of the General
Partner immediately prior to such contribution, the General Partner shall be issued a number of OP
Units equal and corresponding to the number of such shares issued by the General Partner in
exchange for such cash or Investments, the OP Units held by the other Partners shall not be
adjusted, and the Partners’ Percentage Interests shall be adjusted accordingly. The General Partner
shall promptly give each Partner written notice of its Percentage Interest, as adjusted.

  E. Reinvestment of Special General Partner Distributions. The Special General
Partner, in its sole and absolute discretion, may elect, on an annual basis, to reinvest all, or
any portion, of the distributions of Available Cash and Capital Proceeds it receives under
Section 5.1 in the Partnership in exchange for the issuance of OP Units. If the Special
General Partner elects to reinvest any portion of Available Cash and Capital Proceeds distributed
to the Special General Partner under this Agreement, the Special General Partner shall be treated
no differently than any Limited Partner making a Capital Contribution to the Partnership under
Section 4.3.

Section 4.4 Other Contribution Provisions

     With the consent of the General Partner, in its sole discretion, one or more Limited Partners
may enter into agreements with the Partnership, in the form of a guarantee or contribution
agreement, which have the effect of providing a guarantee of certain obligations of the
Partnership.

Section 4.5 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) providing
funds to the Partnership or (ii) issuance or sale of any OP Units or other Partnership Interests.

Section 4.6 No Interest; No Return.

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

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Section 4.7 Profits Interest of Special General Partner

     To the extent that the Special General Partner receives a Partnership Interest with a
disproportionate interest in Partnership Net Income or Net Loss, such Partnership Interest shall be
treated as a “profits interest” received for services rendered, or to be rendered, within the
meaning of IRS Rev. Proc. 93-27, 1993-2 C.B. 343.

ARTICLE 5.

DISTRIBUTIONS

Section 5.1 Requirement and Characterization of Distributions

     The General Partner shall cause the Partnership to distribute at least quarterly all, or such
portion as the General Partner may in its discretion determine, Available Cash and Capital Proceeds
generated by the Partnership to the Partners who are Partners on the applicable Partnership Record
Date with respect to such distribution, in the following order and priority:

     A. Available Cash.

          (1) First, Available Cash from Long-Term Net Leased Properties shall be distributed ten
percent (10%) to the Special General Partner, and ninety percent (90%) to the Partners in
proportion to their respective Percentage Interests;

          (2) Second, Available Cash from Real Estate Related Loans shall be distributed one hundred
percent (100%) to the Special General Partner in an amount equal to the lesser of (i) ten percent
(10%) of Available Cash from Real Estate Related Loans, or (ii) twenty percent (20%) of Available
Cash from Real Estate Related Loans in excess of five percent (5%) of Available Cash from Real
Estate Related Loans; and any remaining Available Cash from Real Estate Related Loans shall be
distributed to the Partners in proportion to their respective Percentage Interests;

          (3) Third, Available Cash from Real Estate Securities shall be distributed one hundred percent
(100%) to the Partners in proportion to their respective Percentage Interests; and

          (4) Fourth, Available Residual Cash shall be distributed ten percent (10%) to the Special
General Partner, and ninety percent (90%) to the Partners in proportion to their respective
Percentage Interests.

     B. Distribution of Capital Proceeds.

          (1) First, Capital Proceeds shall be distributed one hundred percent (100%) to the General
Partner until the General Partner has received distributions under this Section 5.1.B(1)
equal to the General Partner Unpaid Priority Return;

          (2) Second, Capital Proceeds shall be distributed one hundred percent (100%) to the General
Partner until the General Partner Net Current Investment has been reduced to zero; and

          (3) Third, any remaining Capital Proceeds shall be distributed fifteen percent (15%) to the
Special General Partner and eighty-five percent (85%) to the Partners in proportion to their
respective Percentage Interests.

Notwithstanding any other provision of this Article 5 to the contrary, the General Partner
shall take such reasonable efforts, as determined by it in its sole and absolute discretion and
consistent with its qualification as a REIT, to cause the Partnership to distribute sufficient
amounts to enable the General Partner, for so long as the General Partner has determined to qualify
as a REIT, to pay stockholder

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dividends that will (a) satisfy the requirements for qualifying as a REIT under the Code and
Regulations (“REIT Requirements”), and (b) except to the extent otherwise determined by the General
Partner, avoid the imposition of any federal income or excise tax liability on the General Partner.

Section 5.2 Distributions in Kind

     Except as expressly provided herein, no right is given to any Partner to demand and receive
property other than cash. The General Partner may determine, in its sole and absolute discretion,
to make a distribution in-kind to the Partners of Partnership assets, and such assets shall be
distributed in such a fashion as to ensure that the fair market value is distributed and allocated
in accordance with Articles 5, 6 and 10.

Section 5.3 Distributions Upon Liquidation

     Notwithstanding Section 5.1, proceeds from a Liquidating Event shall be distributed to
the Partners in accordance with Section 13.2.

Section 5.4 Distributions to Reflect Issuance of Additional Partnership Interests

     In the event that the Partnership issues additional Partnership Interests to the General
Partner, the Special General Partner, or any Additional Limited Partner pursuant to Section
4.3.B, 4.3.C, or 4.3E, the General Partner shall make such revisions to this
Article 5 as it determines are necessary to reflect the issuance of such additional
Partnership Interests. In the absence of any agreement to the contrary, an Additional Limited
Partner shall be entitled to the distributions set forth in Section 5.1 (without regard to
this Section 5.4) with respect to the period during which the closing of its contribution
to the Partnership occurs, multiplied by a fraction the numerator of which is the number of days
from and after the date of such closing through the end of the applicable period, and the
denominator of which is the total number of days in such period.

Section 5.5 Distribution Limitation

     Notwithstanding any other provision in this Article 5, the General Partner shall have
the power, in its reasonable discretion, to adjust the distributions to the Special General Partner
to the extent necessary to avoid violations of the “2%/25% Guidelines” as described in the Advisory
Agreement.

ARTICLE 6.

ALLOCATIONS

Section 6.1 Timing and Amount of Allocations of Net Income and Net Loss

     Net Income and Net Loss of the Partnership shall be determined and allocated with respect to
each Partnership Year of the Partnership as of the end of each such year. Subject to the other
provisions of this Article 6, an allocation to a Partner of a share of Net Income or Net
Loss shall be treated as an allocation of the same share of each item of income, gain, loss or
deduction that is taken into account in computing Net Income or Net Loss.

Section 6.2 General Allocations

     A. Allocation of Net Income and Net Loss Other Than From a Capital
Transaction.

     (1) Net Income other than from a Capital Transaction. Except as otherwise provided in
Section 6.3, Net Income other than from a Capital Transaction for any Partnership Year
shall be allocated to the Partners in the following manner and order of priority:

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          (a) First, Net Income from Long-Term Net Leased Properties shall be allocated ten percent
(10%) to the Special General Partner, and ninety percent (90%) to the Partners in proportion to
their respective Percentage Interests;

          (b) Second, Net Income from Real Estate Related Loans shall be allocated one hundred percent
(100%) to the Special General Partner in an amount equal to the lesser of (i) ten percent (10%) of
Net Income from Real Estate Related Loans, or (ii) twenty percent (20%) of Net Income from Real
Estate Related Loans in excess of five percent (5%) of Net Income from Real Estate Related Loans;
and any remaining Net Income from Real Estate Related Loans shall be allocated to the Partners in
proportion to their respective Percentage Interests;

          (c) Third, Net Income from Real Estate Securities shall be allocated one hundred percent
(100%) to the Partners in proportion to their respective Percentage Interests; and

          (d) Fourth, Net Residual Income shall be allocated ten percent (10%) to the Special General
Partner, and ninety percent (90%) to the Partners in proportion to their respective Percentage
Interests.

     (2) Net Loss other than from a Capital Transaction. Except as otherwise provided in
Section 6.3, Net Loss other than from a Capital Transaction for any Partnership Year shall
be allocated to the Partners in the following manner and order of priority:

          (a) First, to the Partners, in proportion to their relative allocations of Net Income other
than from a Capital Transaction pursuant to Section 6.2.A(1) until the aggregate
allocations of Net Loss other than from a Capital Transaction pursuant to this Section
6.2.A(2) for all Partnership Years equal the aggregate allocations of Net Income other than
from a Capital Transaction pursuant to Section 6.2.A(1) for all prior Partnership Years;

          (b) Second, to the Partners in proportion to their respective Adjusted Capital Account
Balances until the Adjusted Capital Account Balance of each such Partner is zero; and

          (c) Third, to each of the Partners in proportion to their respective Percentage Interests.

          B. Allocation of Net Income and Net Loss From a Capital Transaction

     (1) Net Income from a Capital Transaction. Except as otherwise provided in Section
6.3, Net Income from a Capital Transaction for any Partnership Year shall be allocated to the
Partners in the following manner and order of priority:

          (a) First, to the Partners, in proportion to their relative allocations of Net Loss from a
Capital Transaction pursuant to Section 6.2.B(2)(b) and (c) until the aggregate allocations
of Net Income from a Capital Transaction pursuant to this Section 6.2.B(1)(a) for all
Partnership Years equal the aggregate allocations of Net Loss from a Capital Transaction pursuant
to Section 6.2.B(2)(b) and (c) for all prior Partnership Years;

          (b) Second, one hundred percent (100%) to the General Partner until the Adjusted Capital
Account Balance of the General Partner equals the sum of the General Partner Net Current Investment
and the General Partner Unpaid Priority Return; and

          (c) Third, fifteen percent (15%) to the Special General Partner, and eighty-five percent (85%)
to the Partners in proportion to their respective Percentage Interests.

     (2) Net Loss from a Capital Transaction. Except as otherwise provided in Section
6.3, Net Loss from a Capital Transaction for any Partnership Year shall be allocated to the
Partners in the following manner and order of priority:

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          (a) First, to the Partners, in proportion to their relative allocations of Net Income from a
Capital Transaction pursuant to Section 6.2.B(1)(c) until the aggregate allocations of Net
Loss from a Capital Transaction pursuant to this Section 6.2.B(2)(a) for all Partnership
Years equal the aggregate allocations of Net Income from a Capital Transaction pursuant to
Section 6.2.B(1)(c) for all prior Partnership Years;

          (b) Second, to the Partners in proportion to their respective Adjusted Capital Account
Balances until the Adjusted Capital Account Balance of each such Partner is zero; and

          (c) Third, to the Partners in proportion to their respective Percentage Interests.

  C. Allocations to Reflect Issuance of Additional Partnership Interests. In the event
that the Partnership issues additional Partnership Interests to the General Partner, the Special
General Partner, a Limited Partner or any Additional Limited Partner pursuant to Section
4.3, the General Partner shall make such revisions to this Section 6.2 as it determines
are necessary to reflect the terms of the issuance of such additional Partnership Interests,
including making preferential allocations to certain classes of Partnership Interests, in
accordance with any method selected by the General Partner.

Section 6.3 Regulatory Allocations

     Notwithstanding the foregoing provisions of this Article 6:

          (i) Minimum Gain Chargeback. Except as otherwise provided in Regulations Section
1.704-2(f), notwithstanding the provisions of Section 6.2, or any other provision of this
Article 6, if there is a net decrease in Partnership Minimum Gain during any Partnership
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 allocated shall be
determined in accordance with Regulations Sections 1.704-2(f)(6) and 1.704-2(j)(2). This
Section 6.3(i) is intended to qualify as a “minimum gain chargeback” within the meaning of
Regulation Section 1.704-2(f) which shall be controlling in the event of a conflict between such
Regulation and this Section 6.3(i).

          (ii) Partner Minimum Gain Chargeback. Except as otherwise provided in Regulations
Section 1.704-2(i)(4), and notwithstanding the provisions of Section 6.2, or any other
provision of this Article 6 (except Section 6.3(i)), if there is a net decrease in
Partner Minimum Gain attributable to a Partner Nonrecourse Debt during any Partnership Year, each
Partner who has a share of the Partner Minimum Gain attributable to such Partner Nonrecourse Debt,
determined in accordance with Regulations Section 1.704-2(i)(5), shall be specially allocated items
of Partnership income and gain for such year (and, if necessary, subsequent years) in an amount
equal to such Partner’s share of the net decrease in Partner Minimum Gain attributable to such
Partner Nonrecourse Debt, determined in accordance with Regulations Section 1.704-2(i)(4).
Allocations pursuant to the previous sentence shall be made in proportion to the respective amounts
required to be allocated to each Partner pursuant thereto. The items to be so allocated shall be
determined in accordance with Regulations Sections 1.704-2(i)(4) and 1.704-2(j)(2). This
Section 6.3(ii) is intended to qualify as a “chargeback of partner nonrecourse debt minimum
gain” within the meaning of Regulation Section 1.704-2(i) which shall be controlling in the event
of a conflict between such Regulation and this Section 6.3(ii).

          (iii) Nonrecourse Deductions and Partner Nonrecourse Deductions. Any Nonrecourse
Deductions for any Partnership Year shall be specially allocated to the Partners in accordance with
their respective Percentage Interests. Any Partner Nonrecourse Deductions for any Partnership Year
shall be specially allocated to the Partner(s) who bears the economic risk of loss with respect to
the Partner Nonrecourse Debt

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to which such Partner Nonrecourse Deductions are attributable, in accordance with Regulations
Sections 1.704-2(b)(4) and 1.704-2(i).

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

          (v) Gross Income Allocation. In the event any Partner has a deficit Capital Account at
the end of any Partnership Year which is in excess of the sum of (1) the amount (if any) such
Partner is obligated to restore to the Partnership, and (2) the amount such Partner is deemed to be
obligated to restore pursuant to Regulations Section 1.704-1(b)(2)(ii)(c) or the penultimate
sentences of Regulations Sections 1.704-2(g)(1) and 1.704-2(i)(5), each such Partner shall be
specially allocated items of Partnership income and gain in the amount of such excess as quickly as
possible, provided, that an allocation pursuant to this Section 6.3(v)
shall be made if and only to the extent that such Partner would have a deficit Capital Account in
excess of such sum after all other allocations provided in this Article 6 have been
tentatively made as if this Section 6.3(v) and Section 6.3(iv) were not in this
Agreement.

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

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

          (viii) Curative Allocation. The allocations set forth in Sections 6.3(i),
(ii), (iii), (iv), (v), (vi), and (vii) (the
“Regulatory Allocations”) are intended to comply with certain regulatory requirements,
including the requirements of Regulations Sections 1.704-1(b) and 1.704-2. Notwithstanding the
provisions of Sections 6.1 and 6.2, the Regulatory Allocations shall be taken into
account in allocating other items of income, gain, loss and deduction among the Partners so that,
to the extent possible, the net amount of such allocations of other items and the Regulatory
Allocations to each Partner shall be equal to the net amount that would have been allocated to each
such Partner if the Regulatory Allocations had not occurred. For purposes of determining a
Partner’s proportional share of the “excess nonrecourse liabilities” of the Partnership within the
meaning of Regulations Section 1.752-3(a)(3), each Partner’s interest in Partnership profits shall
be such Partner’s Percentage Interest.

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Section 6.4 Tax Allocations

     A. In General. Except as otherwise provided in this Section 6.4, for income
tax purposes each item of income, gain, loss and deduction (collectively, “Tax Items”)
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 Sections 6.2 and 6.3.

     B. Allocations Respecting Section 704(c) Revaluations. Notwithstanding Section
6.4.A, Tax Items with respect to Partnership property that is contributed to the Partnership by
a Partner with a Gross Asset Value that differs from its adjusted tax basis in the hands of the
Contributing Partner immediately preceding the date of contribution shall be allocated among the
Partners for income tax purposes pursuant to Regulations promulgated under Section 704(c) of the
Code, so as to take into account the variation between book Capital Accounts and tax capital
accounts. The Partnership shall account for such variation under the “traditional method” under
Regulations Section 1.704-3(b) with respect to Partnership property that is contributed to the
Partnership in connection with the General Partner’s initial offering. With respect to other
properties contributed to the Partnership, the Partnership shall account for such variation under
any reasonable method consistent with Section 704(c) of the Code and the applicable regulations as
chosen by the General Partner. In the event the Gross Asset Value of any Partnership asset is
adjusted pursuant to subparagraph (b) of the definition of Gross Asset Value (provided in Article
1), subsequent allocations of Tax Items with respect to such asset shall take account of the
variation, if any, between the adjusted basis of such asset and its Gross Asset Value in the same
manner as under Section 704(c) of the Code and the applicable regulations consistent with the
requirements of Regulations Section 1.704-1(b)(2)(iv)(g) using any method approved under Section
704(c) of the Code and the applicable regulations as chosen by the General Partner.

ARTICLE 7.

MANAGEMENT AND OPERATIONS OF BUSINESS

Section 7.1 Management

     A. 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, except with the consent of the General Partner. 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 the other provisions hereof including Sections
7.3 and 11.2, shall have full power and authority to do all things deemed necessary or
desirable by it to conduct the business of the Partnership (including, without limitation, all
actions consistent with allowing the General Partner at all times to qualify as a REIT unless the
General Partner voluntarily terminates its REIT status), 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 will permit the General Partner (so long as the
General Partner has determined to qualify 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 stockholders sufficient to permit the General Partner to maintain REIT
status), the assumption or guarantee of, or other contracting for, indebtedness and other
liabilities, the issuance of evidences of indebtedness (including the securing of same by mortgage,
deed of trust or other lien or encumbrance on all or any of the Partnership’s assets) and the
incurring of any obligations it deems necessary for the conduct of the activities of the
Partnership;

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

          (3) subject to the provisions of Section 11.2, the acquisition, disposition, mortgage,
pledge, encumbrance, hypothecation or exchange of any assets of the Partnership or the merger or
other combination of the Partnership with or into another entity;

          (4) the acquisition, disposition, mortgage, pledge, encumbrance or hypothecation of all or any
assets of the Partnership, and 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 or the operations of
the General Partner or the Partnership, the lending of funds to other Persons (including, without
limitation, the General Partner or any Subsidiaries of the Partnership) and the repayment of
obligations of the Partnership, any of its Subsidiaries and any other Person in which it 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;

          (6) the negotiation, execution, and performance of any contracts, leases, 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 distribution of Partnership cash or other Partnership assets in accordance with this
Agreement;

          (8) the establishment of one or more divisions of the Partnership, the selection and 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, the determination of their
compensation and other terms of employment or hiring, including waivers of conflicts of interest
and the payment of their expenses and compensation out of the Partnership’s assets;

          (9) the maintenance of such insurance for the benefit of the Partnership and the Partners and
directors and officers of the Partnership or the General Partner as it deems necessary or
appropriate;

          (10) the formation of, or acquisition of an interest in, and the contribution of property to,
any further limited or general partnerships, limited liability companies, joint ventures,
corporations or other relationships that it deems desirable (including, without limitation, the
acquisition of interests in, and the contributions of property to any Subsidiary and any other
Person in which it has an equity investment from time to time); 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 could cause the General Partner
to fail to qualify as a REIT;

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

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          (12) the undertaking of any action in connection with the Partnership’s direct or indirect
investment in any Person (including, without limitation, contributing or loaning Partnership funds
to, incurring indebtedness on behalf of, or guarantying the obligations of any such Persons);

          (13) subject to the other provisions in this Agreement, the determination of the fair market
value of any Partnership property distributed in kind using such reasonable method of valuation as
it may adopt, provided, that such methods are otherwise consistent with
requirements of this Agreement;

          (14) 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;

          (15) holding, managing, investing and reinvesting cash and other assets of the Partnership;

          (16) the collection and receipt of revenues and income of the Partnership;

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

          (18) 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, or jointly with any such Subsidiary or other Person;

          (19) 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 an interest pursuant to contractual or
other arrangements with such Person;

          (20) the making, execution and delivery of any and all deeds, leases, notes, deeds to secure
debt, mortgages, deeds of trust, security agreements, conveyances, contracts, guarantees,
warranties, indemnities, waivers, releases or 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;

          (21) the issuance of additional Partnership Interests, as appropriate, in connection with the
contribution of Additional Funds pursuant to Section 4.3;

          (22) the distribution of cash to acquire OP Units held by a Limited Partner in connection with
a Limited Partner’s exercise of its Redemption Right under Section 8.6 hereof;

          (23) the amendment and restatement of Exhibit A hereto to reflect accurately at all times 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 OP
Units, the admission of any Additional Limited Partner or any Substituted Limited Partner or
otherwise, which amendment and restatement, notwithstanding anything in this Agreement to the
contrary, shall not be deemed an amendment to this Agreement, as long as the matter or event being
reflected in Exhibit A hereto otherwise is authorized by this Agreement;

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

          (25) the delegation to another Person of any powers now or hereafter granted to the General
Partner.

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     B. 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 provisions of
this Agreement (except as provided in Section 7.3 or 11.2), the Act or any
applicable law, rule or regulation to the fullest extent permitted under the Act or other
applicable law, rule or regulation. The execution, delivery or performance by the General Partner
or the Partnership of any agreement authorized or permitted under this Agreement shall 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. 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 Investments and (ii)
liability insurance for the Indemnities hereunder.

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

     E. Each of the Limited Partners acknowledges that, in exercising its authority under this
Agreement, the General Partner may, but shall be under no obligation to, take into account the tax
consequences to any Partner (including the General Partner) of any action taken (or not taken) by
the General Partner. The General Partner and the Partnership shall not have liability to a Partner
under this Agreement as a result of any income tax liability incurred by a Limited Partner as a
result of an action (or inaction) by the General Partner pursuant to its authority under this
Agreement.

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

Section 7.2 Certificate of Limited Partnership

          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 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 to maintain the Partnership’s qualification to do business as a foreign limited
partnership in 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 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, any other state, or the District of Columbia or other
jurisdiction, in which the Partnership may elect to do business or own property.

Section 7.3 Restrictions on General Partner’s Authority

     A. The General Partner may not take any action in contravention of an express prohibition or
limitation of this Agreement without the written Consent of the Limited Partners and the Special
General Partner, and may not (i) perform any act that would subject a Limited Partner to liability
as a general partner in any jurisdiction or any other liability except as provided herein or under
the Act; or (ii) enter into any contract,

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mortgage, loan or other agreement that prohibits or restricts, or has the effect of prohibiting or
restricting, the ability of a Limited Partner to exercise its rights to a Redemption in full,
except in each case with the written consent of such Limited Partner.

     B. The General Partner shall not, without the prior Consent of the Partners (in addition to
any Consent of the Limited Partners required by any other provision hereof), or except as provided
in Section 7.3.D, amend, modify or terminate this Agreement.

     C. The General Partner may not cause the Partnership to take any action which the General
Partner would be prohibited from taking directly under the General Partner’s bylaws as in effect
from time to time.

     D. Notwithstanding Section 7.3.B, the General Partner shall have the exclusive power
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 issuance of additional Partnership Interests pursuant to Sections
4.3.B, 5.4 and 6.2B. or the admission, substitution, termination, or withdrawal of
Partners in accordance with this Agreement (which may be effected through the replacement of
Exhibit A with an amended Exhibit A);

          (3) to set forth or amend the designations, rights, powers, duties and preferences of the
holders of any additional Partnership Interests issued pursuant to Article 4;

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

          (5) to satisfy any requirements, conditions, or guidelines contained in any order, directive,
opinion, ruling or regulation of a federal or state agency or contained in federal or state law;

          (6) to reflect such changes as are reasonably necessary for the General Partner to maintain
its status as a REIT, including changes which may be necessitated due to a change in applicable law
(or an authoritative interpretation thereof) or a ruling of the IRS;

          (7) to modify, as set forth in the definition of “Capital Account,” the manner in
which Capital Accounts are computed; and

          (8) to amend or modify any provision of this Agreement to reflect a statutory or regulatory
change regarding the federal income tax treatment of the “profits interest” of the Special General
Partner or to ensure that the receipt of the Special General Partner’s profits interest will not
result in taxation to the Special General Partner.

          The General Partner will provide notice to the Limited Partners when any action under this
Section 7.3.D is taken.

     E. Notwithstanding Sections 7.3.B and 7.3.D, this Agreement shall not be
amended with respect to any Partner adversely affected, and no action may be taken by the General
Partner, without the Consent of such Partner adversely affected if such amendment or action would
(i) convert a Limited Partner’s interest in the Partnership into a general partner’s interest
(except as the result of the General Partner acquiring such interest), (ii) modify the limited
liability of a Limited Partner, (iii) alter rights of the Partner to receive distributions pursuant
to Article 5 or Section 13.2.A(4), or the allocations specified in Article
6 (except as

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permitted pursuant to Sections 4.3, 5.4, 6.2.B and Section
7.3.D(3)), (iv) materially alter or modify the rights to a Redemption or the REIT Shares Amount
as set forth in Section 8.6, and related definitions hereof, or (v) amend this Section
7.3.E. Further, no amendment may alter the restrictions on the General Partner’s authority set
forth elsewhere in this Section 7.3 or in Section 11.2.A without the Consent
specified in such section. This Section 7.3.E does not require unanimous consent of all
Partners adversely affected unless the amendment is to be effective against all partners adversely
affected.

Section 7.4 Reimbursement of the General Partner

     A. Except as provided in this Section 7.4 and elsewhere in this Agreement (including
the provisions of Articles 5 and 6 regarding distributions, payments and
allocations to which it may be entitled), the General Partner shall not be compensated for its
services as general partner of the Partnership.

     B. The Partnership shall be responsible for and shall pay all expenses relating to the
Partnership’s and the General Partner’s organization, the ownership of its assets and its
operations. The General Partner is hereby authorized to pay compensation for accounting,
administrative, legal, technical, management and other services rendered to the Partnership. Except
to the extent provided in this Agreement, the General Partner and its Affiliates 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 that the General Partner and its Affiliates incur
relating to the ownership and operation of, or for the benefit of, the Partnership (including,
without limitation, administrative expenses); provided, that the amount of any such
reimbursement shall be reduced by 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. The Partners
acknowledge that all such expenses of the General Partner are deemed to be for the benefit of the
Partnership. Such reimbursement shall be in addition to any reimbursement made as a result of
indemnification pursuant to Section 7.7 hereof. In the event that certain expenses are
incurred for the benefit of the Partnership and other entities (including the General Partner),
such expenses will be allocated to the Partnership and such other entities in such a manner as the
General Partner in its sole and absolute discretion deems fair and reasonable. 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.

     C. If the General Partner shall elect to purchase from its stockholders REIT Shares for the
purpose of delivering such REIT Shares to satisfy an obligation under any dividend reinvestment
program adopted by the General Partner, any employee stock purchase plan adopted by the General
Partner, or any similar obligation or arrangement undertaken by the General Partner in the future
or for the purpose of retiring such REIT Shares, the purchase price paid by the General Partner for
such REIT Shares and any other expenses incurred by the General Partner in connection with such
purchase shall be considered expenses of the Partnership and shall be advanced to the General
Partner or reimbursed to the General Partner, subject to the condition that: (i) if such REIT
Shares subsequently are sold by the General Partner, the General Partner shall pay to the
Partnership any proceeds received by the General Partner for such REIT Shares (which sales proceeds
shall include the amount of dividends reinvested under any dividend reinvestment or similar
program; provided, that a transfer of REIT Shares for OP Units pursuant to
Section 8.6 would not be considered a sale for such purposes); and (ii) if such REIT Shares
are not retransferred by the General Partner within thirty (30) days after the purchase thereof, or
the General Partner otherwise determines not to retransfer such REIT Shares, the General Partner,
shall cause the Partnership to redeem a number of OP Units held by the General Partner equal to the
number of such REIT Shares, as adjusted (x) pursuant to Section 7.5 (in the event the
General Partner acquires material assets, other than on behalf of the Partnership) and (y) for
stock dividends and distributions, stock splits and subdivisions, reverse stock splits and
combinations, distributions of rights, warrants or options, and distributions of evidences of
indebtedness or assets relating to assets not received by the General Partner pursuant to a
pro rata distribution by the Partnership (in which case such advancement or
reimbursement of expenses shall be treated as having been made as a distribution in redemption of
such number of OP Units held by the General Partner).

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     D. As set forth in Section 4.3, the General Partner shall be treated as having made a
Capital Contribution in the amount of all expenses that it incurs relating to the General Partner’s
offering of REIT Shares, other shares of capital stock of the General Partner or New Securities.

     E. If and to the extent any reimbursements to the General Partner pursuant to this Section
7.4 constitute gross income of the General Partner (as opposed to the repayment of advances
made by the General Partner 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.

Section 7.5 Outside Activities of the General Partner

     A. Except in connection with a transaction authorized in Section 11.2, without the
Consent of the 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 a General Partner and the management of the business of the
Partnership, its operation as a public reporting company with a class (or classes) of securities
registered under the Exchange Act, its operation as a REIT and such activities as are incidental to
the same. Without the Consent of the Limited Partners, the General Partner shall not, directly or
indirectly, participate in or otherwise acquire any interest in any real or personal property,
except its General Partner Interest, its minority interest in any Subsidiary Partnership(s) that
the General Partner holds in order to maintain such Subsidiary Partnership’s status as a
partnership, and such bank accounts, similar instruments or other short term investments as it
deems necessary to carry out its responsibilities contemplated under this Agreement and the
Charter. In the event the General Partner desires to contribute cash to any Subsidiary Partnership
to acquire or maintain an interest of 1% or less in the capital of such partnership, the General
Partner may acquire or maintain an interest of 1% or less in the capital of such partnership, and
the General Partner may acquire such cash from the Partnership as a loan or in exchange for a
reduction in the General Partner’s OP Units, in an amount equal to the amount of such cash divided
by the Fair Market Value of a REIT Share on the day such cash is received by the General Partner.
Notwithstanding the foregoing, the General Partner may acquire Investments or other assets in
exchange for REIT Shares or cash, to the extent such Investments or other assets are immediately
contributed by the General Partner to the Partnership, pursuant to the terms described in
Section 4.3.D. Any Limited Partner Interests acquired by the General Partner, whether
pursuant to exercise by a Limited Partner of its right of Redemption, or otherwise, shall be
automatically converted into a General Partner Interest comprised of an identical number of OP
Units with the same rights, priorities and preferences as the class or series so acquired. The
General Partner may also own one hundred percent (100%) of the stock or interests of one or more
Qualified REIT Subsidiaries or limited liability companies, respectively, provided that any such
entity shall be subject to the limitations of this Section 7.5.A. If, at any time, the General
Partner acquires material assets (other than Partnership Interests or other assets on behalf of the
Partnership) the definition of “REIT Shares Amount” and the definition of “Deemed Value of
Partnership Interests” shall be adjusted, as reasonably determined by the General Partner, to
reflect the relative Fair Market Value of a share of capital stock of the General Partner relative
to the Deemed Partnership Interest Value of the related Partnership Unit. The General Partner’s
General Partner Interest in the Partnership, its minority interest in any Subsidiary Partnership(s)
(held directly or indirectly through a Qualified REIT Subsidiary) that the General Partner holds in
order to maintain such Subsidiary Partnership’s status as a partnership, and interests in such
short-term liquid investments, bank accounts or similar instruments as the General Partner deems
necessary to carry out its responsibilities contemplated under this Agreement and the Charter are
interests which the General Partner is permitted to acquire and hold for purposes of this
Section 7.5.A.

     B. In the event the General Partner exercises its rights under the Charter to purchase REIT
Shares, other common stock of the General Partner or New Securities, as the case may be, then the
General Partner shall cause the Partnership to purchase from it a number of OP Units equal to the
number of REIT Shares, other capital stock of the General Partner or New Securities, as the case
may be, so purchased on the same terms

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that the General Partner purchased such REIT Shares, other capital stock of the General Partner or
New Securities, as the case may be.

Section 7.6 Contracts with Affiliates

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

     B. Except as provided in Section 7.5.A, the Partnership may transfer assets to joint
ventures, other partnerships, corporations or other business entities in which it is or thereby
becomes a participant upon such terms and subject to such conditions consistent with this Agreement
and applicable law as the General Partner in its sole discretion deems advisable.

     C. 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 in respect of services performed,
directly or indirectly, for the benefit of the Partnership, the General Partner, or any of the
Partnership’s Subsidiaries.

     D. Except as expressly permitted by this Agreement, neither the General Partner nor any of its
Affiliates shall sell, transfer or convey any property to, or purchase any property from, the
Partnership, directly or indirectly, except pursuant to transactions that are determined by the
General Partner in good faith to be fair and reasonable.

     E. The General Partner is expressly authorized to enter into, in the name and on behalf of the
Partnership, a right of first opportunity arrangement and other conflict avoidance agreements with
various Affiliates of the Partnership and the General Partner, on such terms as the General
Partner, in its sole and absolute discretion, believes are advisable.

Section 7.7 Indemnification

     A. To the fullest extent permitted by law, the Partnership shall indemnify an Indemnitee from
and against any and all losses, claims, damages, liabilities, joint or several, expenses (including
legal fees and expenses), judgments, fines, settlements, and other amounts arising from any and all
claims, demands, actions, suits or proceedings, civil, criminal, administrative or investigative,
that relate to the operations of the Partnership as set forth in this Agreement in which any
Indemnitee may be involved, or is threatened to be involved, as a
party or otherwise, unless (1) Section 12.2.2 of the
Charter of the General Partner prohibits the corporation from
indemnifying the Indemnifee for tax matter, in which case the
Partnership shall likewise be prohibited from indemnifying the
Indemnitee for the matter, or (2) it is
established that: (i) the act or omission of the Indemnitee was material to the matter giving rise
to the proceeding and either was committed in bad faith, fraud 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 guaranty 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, settlement, conviction
or upon a plea of nolo contendere or its equivalent, or any entry of an order of probation prior to
judgment, does not create a presumption that the Indemnitee did not meet the requisite standard of
conduct set forth in this Section 7.7.A. 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

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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, except to the extent otherwise expressly agreed to by such Partner and the Partnership.

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

     C. 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. The Partnership may, but shall not be obligated to, purchase and maintain insurance, on
behalf of the Indemnitees and such other Persons as the General Partner shall determine, against
any liability that may be asserted against or expenses that may be incurred by such Person in
connection with the Partnership’s activities, regardless of whether the Partnership would have the
power to indemnify such Person against such liability under the provisions of this Agreement.

     E. For purposes of this Section 7.7, the Partnership shall be deemed to have requested
an Indemnitee to serve as fiduciary of an employee benefit plan whenever the performance by it of
its duties to the Partnership also imposes duties on, or otherwise involves services by, it to the
plan or participants or beneficiaries of the plan; excise taxes assessed on an Indemnitee with
respect to an employee benefit plan pursuant to applicable law shall constitute fines within the
meaning of Section 7.7; and actions taken or omitted by the Indemnitee with respect to an
employee benefit plan in the performance of its duties for a purpose reasonably believed by it to
be in the interest of the participants and beneficiaries of the plan shall be deemed to be for a
purpose which is not opposed to the best interests of the Partnership.

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

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

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

     I. If and to the extent any reimbursements to the General Partner pursuant to this Section
7.7 constitute gross income of the General Partner (as opposed to the repayment of advances
made by the General Partner 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.

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     J. Any indemnification hereunder is subject to, and limited by, the provisions of Section
10-107 of the Act and Section 12.2.2 of the Charter.

     K. In the event the Partnership is made a party to any litigation or otherwise incurs any loss
or expense as a result of or in connection with any Partner’s personal obligations or liabilities
unrelated to Partnership business, such Partner shall indemnify and reimburse the Partnership for
all such loss and expense incurred, including legal fees, and the Partnership interest of such
Partner may be charged therefor. The liability of a Partner under this Section 7.7.K shall
not be limited to such Partner’s Partnership Interest, but shall be enforceable against such
Partner personally.

Section 7.8 Liability of the General Partner

     A. Notwithstanding anything to the contrary set forth in this Agreement, none of the General
Partner nor any of its officers, directors, agents or employees shall be liable or accountable in
damages or otherwise to the Partnership, any Partners or any Assignees, or their successors or
assigns, for losses sustained, liabilities incurred or benefits not derived as a result of errors
in judgment or mistakes of fact or law or any act or omission if the General Partner acted in good
faith.

     B. The Limited Partners expressly acknowledge that the General Partner is acting for the
benefit of the Partnership, the Limited Partners and the General Partner’s stockholders
collectively. The General Partner is under no obligation to give priority to the separate interests
of the Limited Partners or the General Partner’s stockholders (including, without limitation, the
tax consequences to Limited Partners or Assignees or to stockholders) in deciding whether to cause
the Partnership to take (or decline to take) any actions. If there is a conflict between the
interests of the stockholders of the General Partner on one hand and the Limited Partners on the
other, the General Partner shall endeavor in good faith to resolve the conflict in a manner not
adverse to either the stockholders of the General Partner or the Limited Partners;
provided, however, that for so long as the General Partner, owns a controlling
interest in the Partnership, any such conflict that cannot be resolved in a manner not adverse to
either the stockholders of the General Partner or the Limited Partners shall be resolved in favor
of the stockholders. The General Partner shall not be liable under this Agreement to the
Partnership or to any Partner for monetary damages for losses sustained, liabilities incurred, or
benefits not derived by Limited Partners in connection with such decisions; provided,
that the General Partner has acted in good faith.

     C. Subject to its obligations and duties as General Partner set forth in Section
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 it in good faith.

     D. Any amendment, modification or repeal of this Section 7.8 or any provision hereof
shall be prospective only and shall not in any way affect the limitations on the liability of the
General Partner and any of its officers, directors, agents and employee’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.

Section 7.9 Other Matters Concerning the General Partner

     A. 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 to be genuine and to have been
signed or presented by the proper party or parties.

     B. 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

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omitted to be taken in reliance upon the opinion of such Persons as to matters which such 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. 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 which
is permitted or required to be done by the General Partner hereunder.

     D. Notwithstanding any other provisions of this Agreement or any non-mandatory provision of
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 to protect the ability of
the General Partner, for so long as the General Partner has determined to qualify as a REIT, to (i)
continue to qualify as a REIT or (ii) avoid the General Partner incurring any taxes under Section
857 or Section 4981 of the Code, is expressly authorized under this Agreement and is deemed
approved by all of the Limited Partners.

Section 7.10 Title to Partnership Assets

          Title to Partnership assets, whether real, personal or mixed and whether tangible or
intangible, shall be deemed to be owned by the Partnership as an entity, and no 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; provided,
however, that the General Partner shall use its best efforts to cause beneficial and record
title to such assets to be vested in the Partnership as soon as reasonably practicable. All
Partnership assets shall be recorded as the property of the Partnership in its books and records,
irrespective of the name in which legal title to such Partnership assets is held.

Section 7.11 Reliance by Third Parties

          Notwithstanding anything to the contrary in this Agreement, any Person dealing with the
Partnership shall be entitled to assume that the General Partner has full power and authority to
encumber, sell or otherwise use in any manner any and all assets of the Partnership and to enter
into any contracts on behalf of the Partnership, and such Person shall be entitled to deal with the
General Partner as if it were the Partnership’s sole party in interest, both legally and
beneficially. Each Limited Partner hereby waives any and all defenses or other remedies which may
be available against such Person to contest, negate or disaffirm any action of the General Partner
in connection with any such dealing. 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.

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Section 7.12 Management Assistance Provided by Special General Partner

          In addition to the requirement to obtain the Consent of the Special General Partner with
respect to certain matters as provided for in this Agreement, the Special General Partner shall
provide consulting services and assistance to the Partnership at various times, in conjunction with
the Advisor, for no additional consideration, on matters relating to the following:

	 	(1)	 	the strategic planning of the Partnership;
	 
	 	(2)	 	the creation of business plans of the Partnership;
	 
	 	(3)	 	the sale, merger, or the sale of substantially all of the assets, of the Partnership; and
	 
	 	(4)	 	any other matters concerning the Partnership as determined appropriate by the General
Partner and the Special General Partner.

ARTICLE 8.

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 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 operations, management
or control (within the meaning of the Act) of the Partnership’s business, transact any business in
the Partnership’s name or have the power to sign documents for or otherwise bind the Partnership.
The transaction of any such business by the 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 any agreements entered into by a Limited Partner or its Affiliates with the General
Partner, Partnership or a Subsidiary, any Limited Partner and any officer, director, employee,
agent, trustee, Affiliate or stockholder of any Limited Partner shall be entitled to and may have
business interests and engage in business activities in addition to those relating to the
Partnership, including business interests and activities in direct competition with the Partnership
or that are enhanced by the activities of 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. Subject to such agreements, none of the Limited Partners nor any other Person shall
have any rights by virtue of this Agreement or the partnership relationship established hereby in
any business ventures of any other Person, other than the Limited Partners benefiting from the
business conducted by the General Partner, and such Person shall have no obligation pursuant to
this Agreement to offer any interest in any such business ventures to the Partnership, any Limited
Partner or any such other Person, even if such opportunity is of a character which, if presented to
the Partnership, any Limited Partner or such other Person, could be taken by such Person.

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Section 8.4 Return of Capital

          Except pursuant to the rights of Redemption set forth in Section 8.6, no Limited
Partner shall be entitled to the withdrawal or return of his or her 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, or as otherwise expressly
provided in this Agreement, or as to profits, losses, distributions or credits.

Section 8.5 Rights of Limited Partners Relating to the Partnership

     A. In addition to other rights provided by this Agreement or by the Act, and except as limited
by Section 8.5.C, 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 expense:

          (1) to obtain a copy of the most recent annual and quarterly reports filed with the Securities
and Exchange Commission by the General Partner pursuant to the Exchange Act, and each communication
sent to the stockholders of the General Partner;

          (2) to obtain a copy of the Partnership’s federal, state and local income tax returns for each
Partnership 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 and all amendments thereto,
together with executed copies of all powers of attorney pursuant to which this Agreement, the
Certificate and all amendments thereto have been executed; and

          (5) to obtain true and full information regarding the amount of cash and a description and
statement 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 became a Partner.

     B. The Partnership shall notify each Limited Partner in writing of any adjustment made in the
calculation of the REIT Shares Amount within a reasonable time after the date such change becomes
effective.

     C. 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 to be reasonable, any information that (i) the
General Partner 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 (ii) the Partnership or the General Partner is required by law or by agreements with
unaffiliated third parties to keep confidential.

Section 8.6 Redemption Rights

     A. At any time after one year following the date of issuance of any OP Units to a Limited
Partner or a Special General Partner, such Partner shall have the right (subject to the terms and
conditions set forth herein and in any other such agreement, as applicable) to require the
Partnership to redeem all or a portion of the OP Units held by such Partner (such OP Units being
hereafter referred to as “Tendered Units”) in exchange for the Cash Amount (a
“Redemption”); provided that the terms of such OP Units do not provide that such OP Units
are not entitled to a right of Redemption. Unless otherwise expressly provided in this Agreement or
in a separate agreement entered into between the Partnership and the holders of such OP

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Units, all OP Units shall be entitled to a right of Redemption hereunder. The Tendering Partner
shall have no right, with respect to any OP Units so redeemed, to receive any distributions paid on
or after the Specified Redemption Date. Any Redemption shall be exercised pursuant to a Notice of
Redemption delivered to the General Partner by the Special General Partner or Limited Partner who
is exercising the right (the “Tendering Partner”). The Cash Amount shall be payable to the
Tendering Partner within ten (10) days of the Specified Redemption Date in accordance with the
instructions set forth in the Notice of Redemption.

     B. Notwithstanding Section 8.6.A above, if the Special General Partner or a Limited
Partner has delivered to the General Partner a Notice of Redemption then the General Partner may,
in its sole and absolute discretion (subject to the limitations on ownership and transfer of REIT
Shares set forth in the Charter), elect to acquire some or all of the Tendered Units from the
Tendering Partner in exchange for the REIT Shares Amount (as of the Specified Redemption Date) and,
if the General Partner so elects, the Tendering Partner shall sell the Tendered Units to the
General Partner in exchange for the REIT Shares Amount. In such event, the Tendering Partner shall
have no right to cause the Partnership to redeem such Tendered Units. The General Partner shall
promptly give such Tendering Partner written notice of its election, and the Tendering Partner may
elect to withdraw its redemption request at any time prior to the acceptance of the cash or REIT
Shares Amount by such Tendering Partner.

     C. The REIT Shares Amount, if applicable, shall be delivered as duly authorized, validly
issued, fully paid and nonassessable REIT Shares and, if applicable, free of any pledge, lien,
encumbrance or restriction, other than those provided in the Charter, the Bylaws of the General
Partner, the Securities Act, relevant state securities or blue sky laws and any applicable
registration rights agreement with respect to such REIT Shares entered into by the Tendering
Partner. Notwithstanding any delay in such delivery (but subject to Section 8.6.E), the
Tendering Partner shall be deemed the owner of such REIT Shares for all purposes, including without
limitation, rights to vote or consent, and receive dividends, as of the Specified Redemption Date.

     D. The Special General Partner and each Limited Partner covenants and agrees with the General
Partner that all Tendered Units shall be delivered to the General Partner free and clear of all
liens, claims and encumbrances whatsoever and should any such liens, claims and/or encumbrances
exist or arise with respect to such Tendered Units, the General Partner shall be under no
obligation to acquire the same. The Special General Partner and each Limited Partner further
agrees that, in the event any state or local property transfer tax is payable as a result of the
transfer of its Tendered Units to the General Partner (or its designee), such Partner shall assume
and pay such transfer tax.

     E. Notwithstanding the provisions of Section 8.6.A, 8.6.B, 8.6.C or
any other provision of this Agreement, the Special General Partner or a Limited Partner (i) shall
not be entitled to effect a Redemption for cash or an exchange for REIT Shares to the extent the
ownership or right to acquire REIT Shares pursuant to such exchange by such Partner on the
Specified Redemption Date could cause such Partner or any other Person, or, in the opinion of
counsel selected by the General Partner, may cause such Partner or any other Person, to violate the
restrictions on ownership and transfer of REIT Shares set forth in the Charter and (ii) shall have
no rights under this Agreement to acquire REIT Shares which would otherwise be prohibited under the
Charter. To the extent any attempted Redemption or exchange for REIT Shares would be in violation
of this Section 8.6.E, it shall be null and void ab initio and such Partner shall not
acquire any rights or economic interest in the cash otherwise payable upon such Redemption or the
REIT Shares otherwise issuable upon such exchange.

     F. Notwithstanding anything herein to the contrary (but subject to Section 8.6.E),
with respect to any Redemption or exchange for REIT Shares pursuant to this Section 8.6:

          (1) All OP Units acquired by the General Partner pursuant thereto shall automatically, and
without further action required, be converted into and deemed to be Limited Partner Interests
comprised of the same number and class of OP Units.

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          (2) The Special General Partner and each Limited Partner may not effect a Redemption for less
than one thousand (1,000) OP Units or, if such Partner holds less than one thousand (1,000) OP
Units, such Partner may effect a Redemption only with respect to all OP Units held by such Partner.

          (3) A Tendering Partner may not effect more than two (2) Redemptions in a single calendar
year.

          (4) Without the consent of the General Partner, the Special General Partner and each Limited
Partner may not effect a Redemption during the period after the Partnership Record Date with
respect to a distribution and before the record date established by the General Partner for a
distribution to its stockholders of some or all of its portion of such distribution.

          (5) The consummation of any Redemption or exchange for REIT Shares shall be subject to the
expiration or termination of the applicable waiting period, if any, under the Hart-Scott-Rodino
Antitrust Improvements Act of 1976, as amended.

          (6) Each Tendering Partner shall continue to own all OP Units subject to any Redemption or
exchange for REIT Shares, and be treated as a Partner with respect to such OP Units for all
purposes of this Agreement, until such OP Units are transferred to the General Partner and paid for
or exchanged on the Specified Redemption Date. Until a Specified Redemption Date, the Tendering
Partner shall have no rights as a stockholder of the General Partner with respect to such Tendering
Partner’s OP Units.

     G. In the event that the Partnership issues additional Partnership Interests to any Additional
Limited Partner pursuant to Section 4.3.B, the General Partner shall make such revisions to
this Section 8.6 as it determines are necessary to reflect the issuance of such additional
Partnership Interests.

     H. Notwithstanding any other provision of this Agreement, the General Partner is authorized to
take any action that it determines to be necessary or appropriate to cause the partnership to
comply with any withholding requirements established under the Code or any other federal, state or
local law that apply upon a Redemption or exchange of Tendered Units. If a Tendering Partner
believes that it is exempt from withholding upon a Redemption or exchange of Tendered Units, such
Partner must furnish the General Partner a FIRPTA certificate or other documentation requested by
the General Partner is a form acceptable to the General Partner. If the Partnership or the General
Partner is required to withhold and pay over to any taxing authority any amount upon a Redemption
or exchange of Tendered Units and the Cash Amount or the REIT Shares Amount, as the case may be,
equals or exceeds the amount of tax required to be withheld, the amount withheld shall be treated
as an amount received by such Partner in redemption of its Tendered Units. If the Cash Amount or
the REIT Shares Amount, as the case may be, is less than the amount of tax required to be withheld,
the Tendering Partner shall not receive any Cash Amount or REIT Shares Amount, and the Tendering
Partner shall contribute the excess of the amount of tax required to be withheld over the Cash
Amount or REIT Shares Amount before such excess taxes are required to be paid to the taxing
authority.

ARTICLE 9.

BOOKS, RECORDS, ACCOUNTING AND REPORTS

Section 9.1 Records and Accounting

          The General Partner shall keep, or cause to be kept, at the principal office of the
Partnership appropriate books and records with respect to the Partnership’s business, including
without limitation, all books and records necessary to provide to the Special General Partner and
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 any 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

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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. As soon as practicable, but in no event later than 105 days after the close of each
Partnership Year, or such earlier date as they are filed with the Securities and Exchange
Commission, the General Partner shall cause to be delivered to the Special General Partner and each
Limited Partner as of the close of the Partnership Year, an annual report containing financial
statements of the Partnership, or of the General Partner if such statements are prepared solely on
a consolidated basis with the General Partner, for such Partnership Year, presented in accordance
with generally accepted accounting principles, such statements to be audited by a nationally
recognized firm of independent public accountants selected by the General Partner.

     B. As soon as practicable, but in no event later than 45 days after the close of each calendar
quarter (except the last calendar quarter of each year), or such earlier date as they are filed
with the Securities and Exchange Commission, the General Partner shall cause to be delivered to the
Special General Partner and each Limited Partner as of the last day of the calendar quarter, a
report containing unaudited financial statements of the Partnership, or of the General Partner, if
such statements are prepared solely on a consolidated basis with the applicable law or regulation,
or as the General Partner determines to be appropriate.

Section 9.4 Nondisclosure of Certain Information

          Notwithstanding the provisions of Sections 9.1 and 9.3, the General Partner
may keep confidential from the Special General Partner and the Limited Partners any information
that the General Partner 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 interest of the
Partnership or which the Partnership is required by law or by agreements with unaffiliated third
parties to keep confidential.

ARTICLE 10.

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 applicable state income tax purposes and shall use all reasonable efforts to furnish,
within 90 days of the close of each taxable year, the tax information reasonably required by the
Special General Partner and the Limited Partners for federal and applicable state income tax
reporting purposes. The Special General Partner and each Limited Partner shall promptly provide
the General Partner with any information reasonably requested by the General Partner relating to
any Contributed Property contributed (directly or indirectly) by such Partner to the Partnership.

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 (including without limitation, any election under Section 754 of the Code) upon
the General Partner’s determination in its sole and absolute discretion that such revocation is the
best interests of the Partners.

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Section 10.3 Tax Matters Partner

     A. The General Partner shall be the “tax matters partner” of the Partnership for
federal income tax purposes. Pursuant to Section 6230(e) 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 and profit interest of the Special
General Partner and each of the Limited Partners and Assignees; provided, however,
that such information is provided to the Partnership by the Partners and Assignees.

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

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

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

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

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

          (5) to enter into an agreement with the IRS to extend the period for assessing any tax 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. 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) shall be borne by the Partnership. Nothing herein shall be construed to
restrict the Partnership from engaging an accounting firm to assist the tax matters partner in
discharging its duties hereunder, so long as the compensation paid by the Partnership for such
services is reasonable.

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Section 10.4 Organizational Expenses

          The Partnership shall elect to deduct expenses, if any, incurred by it in organizing the
Partnership as provided in Section 709 of the Code.

Section 10.5 Withholding

          The Special General Partner and each Limited Partner hereby authorize the Partnership to
withhold from or pay on behalf of or with respect to such 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 Partner pursuant to
this Agreement, including, without limitation, any taxes required to be withheld or paid by the
Partnership pursuant to Sections 1441, 1442, 1445 or 1446 of the Code. Any amount paid on behalf of
or with respect to the Special General Partner or a Limited Partner shall constitute a receivable
of the Partnership from such Partner, which receivable shall be paid by such Partner within 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 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 Partner. Any amounts withheld pursuant to the foregoing clauses (i) or (ii) shall be treated as
having been distributed to such Partner. The Special General Partner and each Limited Partner
hereby unconditionally and irrevocably grants to the Partnership a security interest in such
Partner’s Partnership Interest to secure such Partner’s obligation to pay to the Partnership any
amounts required to be paid pursuant to this Section 10.5. Any amounts payable by the
Special General Partner or 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 two percentage points (but not higher than the
maximum lawful rate) from the date such amount is due (i.e., 15 days after demand) until
such amount is paid in full. The Special General Partner and each Limited Partner shall take such
actions as the Partnership or the General Partner shall request in order to perfect or enforce the
security interest created hereunder.

ARTICLE 11.

TRANSFERS AND WITHDRAWALS

Section 11.1 Transfer

     A. The term “transfer,” when used in this Article 11 with respect to a
Partnership Interest, shall be deemed to refer to a transaction by which a Partner purports to
assign its Partnership Interest to another Person and includes a sale, assignment, gift (outright
or in trust), pledge, encumbrance, hypothecation, mortgage, exchange or any other disposition by
law or otherwise. The term “transfer” when used in this Article 11 does not include any
Redemption or exchange for REIT Shares pursuant to Section 8.6, except as otherwise
provided herein. 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
or consented to by the General Partner and the Special General Partner.

     B. No Partnership Interest shall be transferred, in whole or in part, except in accordance
with the terms and conditions set forth in this Article 11. Any transfer or purported
transfer of a Partnership Interest not made in accordance with this Article 11 shall be
null and void ab initio unless otherwise consented to by the General Partner and the Special
General Partner in their sole and absolute discretion.

Section 11.2 Transfer of the Partnership Interest of the General Partner and the Special
General Partner

     A. The General Partner shall not (i) withdraw from the Partnership, (ii) directly or
indirectly transfer all or any portion of its interest in the Partnership, or (iii) engage in any
merger, consolidation, or other

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combination with or into another Person, sale of all or substantially all of its assets or any
reclassification or recapitalization of its outstanding equity interests (an “Extraordinary
Transaction”), without the Consent of the Partners, which may be given or withheld by each Partner
in his, her or its sole and absolute discretion. In addition, if an Extraordinary Transaction
would result in the termination of the Advisory Agreement, the Partnership must either (i) purchase
the Special General Partner Interest as provided under Section 11.7, or (ii) obtain the
Consent of the Special General Partner. Upon any transfer of a Partnership Interest in accordance
with the provisions of this Section 11.2, the transferee shall become a Substitute General
Partner for all purposes herein, and shall be vested with the powers and rights of the transferor
General Partner, and shall be liable for all obligations and responsible for all duties of the
General Partner, once such transferee has executed such instruments as may be necessary to
effectuate such admission and to confirm the agreement of such transferee to be bound by all the
terms and provisions of this Agreement with respect to the Partnership Interest so acquired. It is
a condition to any transfer otherwise permitted hereunder that the transferee assumes, by operation
of law or express agreement, all of the obligations of the transferor General Partner under this
Agreement with respect to such transferred Partnership Interest, and no such transfer (other than
pursuant to a statutory merger or consolidation wherein all obligations and liabilities of the
transferor General Partner are assumed by a successor corporation by operation of law) shall
relieve the transferor General Partner of its obligations under this Agreement without the Consent
of the Limited Partners, in their reasonable discretion. In the event the General Partner withdraws
from the Partnership in violation of this Agreement or otherwise, or otherwise dissolves or
terminates, or upon the Incapacity of the General Partner, all of the remaining Partners may elect
to continue the Partnership business by selecting a Substitute General Partner in accordance with
the Act

     B. Notwithstanding any other provision of this Agreement, the Special General Partner shall
not transfer all or any portion of its Partnership Interest to any transferee without the consent
of the General Partner, which consent may be withheld in the sole and absolute discretion of the
General Partner. Notwithstanding the preceding sentence, however, the Special General Partner
shall have the right, at any time, to transfer its Partnership Interest to the General Partner or
to an Affiliate of the General Partner.

Section 11.3 Limited Partners’ Rights to Transfer

     A. Prior to the first anniversary of the Effective Date, no Limited Partner shall transfer all
or any portion of its Partnership Interest to any transferee without the consent of the General
Partner and the Special General Partner, which consent may be withheld in their sole and absolute
discretion; provided, however, that any Limited Partner may, at any time, without
the consent of the General Partner and the Special General Partner, (i) transfer all or any portion
of its Partnership Interest to the General Partner, (ii) transfer all or any portion of its
Partnership Interest to an Affiliate, another original Limited Partner or to an Immediate Family
Member, subject to the provisions of Section 11.6, (iii) transfer all or any portion of its
Partnership Interest to a trust for the benefit of a charitable beneficiary or to a charitable
foundation, subject to the provisions of Section 11.6, and (iv) subject to the provisions
of Section 11.6, pledge (a “Pledge”) all or any portion of its Partnership Interest
to a lending institution, which is not an Affiliate of such Limited Partner, as collateral or
security for a bona fide loan or other extension of credit, and transfer such pledged Partnership
Interest to such lending institution in connection with the exercise of remedies under such loan or
extension or credit, and the transfer of such pledged Partnership Interest by the lender to any
transferee. After such anniversary, each Limited Partner or Assignee (resulting from a transfer
made pursuant to clauses (i)-(iv) of the proviso of the preceding sentence) shall have the right to
transfer all or any portion of its Partnership Interest, subject to the provisions of Section
11.6 and the satisfaction of each of the following conditions (in addition to the right of each
such Limited Partner or Assignee to continue to make any such transfer permitted by clauses
(i)-(iv) of such proviso without satisfying either of the following conditions):

          (1) General Partner Right of First Refusal. The transferring Partner shall give
written notice of the proposed transfer to the General Partner, which notice shall state (i) the
identity of the proposed transferee, and (ii) the amount and type of consideration proposed to be
received for the transferred OP Units. The General Partner shall have ten (10) business days upon
which to give the transferring Partner notice of its

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election to acquire the OP Units on the proposed terms. If it so elects, it shall purchase the OP
Units on such terms within ten (10) business days after giving notice of such election. If it does
not so elect, the transferring Partner may transfer such OP Units to a third party, on economic
terms no more favorable to the transferee than the proposed terms, subject to the other conditions
of this Section 11.3.

          (2) Qualified Transferee. Any transfer of a Partnership Interest shall be made only to
Qualified Transferees. It is a condition to any transfer otherwise permitted hereunder that the
transferee assumes by operation of law or express agreement all of the obligations of the
transferor Limited Partner under this Agreement with respect to such transferred Partnership
Interest and no such transfer (other than pursuant to a statutory merger or consolidation wherein
all obligations and liabilities of the transferor Partner are assumed by a successor corporation by
operation of law) shall relieve the transferor Partner of its obligations under this Agreement
without the approval of the General Partner, in its reasonable discretion. Notwithstanding the
foregoing, any transferee of any transferred Partnership Interest shall be subject to any and all
ownership limitations contained in the Charter, which may limit or restrict such transferee’s
ability to exercise its Redemption rights, and to the representations in Section 3.4.D. Any
transferee, whether or not admitted as a Substituted Limited Partner, shall take subject to the
obligations of the transferor hereunder. Unless admitted as a Substituted Limited Partner, no
transferee, whether by a voluntary transfer, by operation of law or otherwise, shall have any
rights hereunder, other than the rights of an Assignee as provided in Section 11.5.

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

     C. The General Partner may prohibit any transfer otherwise permitted under Section
11.3 by a Limited Partner of his or her OP Units if, in the opinion of legal counsel to the
Partnership, such transfer would require the filing of a registration statement under the
Securities Act by the Partnership or would otherwise violate any federal or state securities laws
or regulations applicable to the Partnership or the Partnership Unit.

Section 11.4 Substituted Limited Partners

     A. No Limited Partner shall have the right to substitute a transferee as a Limited Partner in
his or her place (including any transferee permitted by Section 11.3). The General Partner
shall, however, have the right to consent to the admission of a transferee of the interest of a
Limited Partner pursuant to this Section 11.4 as a Substituted Limited Partner, which
consent may be given or withheld by the General Partner in its sole and absolute discretion. The
General Partner’s failure or refusal to permit a transferee of any such interests to become a
Substituted Limited Partner shall not give rise to any cause of action, whether at law or in
equity, against the Partnership or any Partner.

     B. A transferee who has been admitted as a Substituted Limited Partner in accordance with this
Article 11 shall have all the rights and powers and be subject to all the restrictions and
liabilities of a Limited Partner under this Agreement. The admission of any transferee as a
Substituted Limited Partner shall be subject to the transferee executing and delivering to the
General Partner an acceptance of all of the terms and conditions of this Agreement (including
without limitation, the provisions of Section 2.4 and such other documents or instruments
as may be required to effect the admission), each in form and substance satisfactory to the General
Partner) and the acknowledgment by such transferee that each of the representations and warranties
set forth in Section 3.4 are true and correct with respect to such transferee as of the
date of the transfer of the Partnership Interest to such transferee and will continue to be true to
the extent required by such representations and warranties.

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     C. Upon the admission of a Substituted Limited Partner, the General Partner shall amend
Exhibit A to reflect the name, address, number of OP Units, and Percentage Interest of such
Substituted Limited Partner and to eliminate or adjust, if necessary, the name, address and
interest of the predecessor of such Substituted Limited Partner.

Section 11.5 Assignees

          If the General Partner, in its sole and absolute discretion, does not consent to the admission
of any permitted transferee under Section 11.3 as a Substituted Limited Partner, as
described in Section 11.4, such transferee shall be considered an Assignee for purposes of
this Agreement. An Assignee shall be entitled to all the rights of an assignee of a limited
partnership interest under the Act, including the right to receive distributions from the
Partnership and the share of Net Income, Net Loss, gain and loss attributable to the OP Units
assigned to such transferee, the rights to transfer the OP Units provided in this Article
11, the right of Redemption provided in Section 8.6, but shall not be deemed to be a
holder of OP Units for any other purpose under this Agreement, and shall not be entitled to effect
a Consent with respect to such OP Units on any matter presented to the Limited Partners for
approval (such Consent remaining with the transferor Limited Partner). In the event any such
transferee desires to make a further assignment of any such Partnership Units, such transferee
shall be subject to all the provisions of this Article 11 to the same extent and in the
same manner as any Limited Partner desiring to make an assignment of OP Units. Notwithstanding
anything contained in this Agreement to the contrary, as a condition to becoming an Assignee, any
prospective Assignee must first execute and deliver to the Partnership an acknowledgment that each
of the representations and warranties set forth in Section 3.4 are true and correct with
respect to such prospective Assignee as of the date of the prospective assignment of the
Partnership Interest to such prospective Assignee and will continue to be true to the extent
required by such representations or warranties.

Section 11.6 General Provisions

     A. No Limited Partner may withdraw from the Partnership other than as a result of (i) a
permitted transfer of all of such Limited Partner’s OP Units in accordance with this Article
11 and the transferee(s) of such Partnership Units being admitted to the Partnership as a
Substituted Limited Partner or (ii) pursuant to the exercise of its right of Redemption of all of
such Limited Partner’s OP Units under Section 8.6; provided that after such transfer,
exchange or redemption such Limited Partner owns no Partnership Interest.

     B. Any Limited Partner who shall transfer all of such Limited Partner’s OP Units in a transfer
permitted pursuant to this Article 11 where such transferee was admitted as a Substituted
Limited Partner or pursuant to the exercise of its rights of Redemption of all of such Limited
Partner’s OP Units under Section 8.6 shall cease to be a Limited Partner; provided that
after such transfer, exchange or redemption such Limited Partner owns no Partnership Interest.

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

     D. If any Partnership Interest is transferred, assigned or redeemed during any quarterly
segment of the Partnership’s Partnership Year in compliance with the provisions of this Article
11 or transferred or redeemed pursuant to Section 8.6, on any day other than the first
day of a Partnership Year, then Net Income, Net Loss, each item thereof and all other items
attributable to such Partnership Interest for such Partnership Year shall be divided and allocated
between the transferor Partner and the transferee Partner by taking into account their varying
interests during the Partnership Year using a method selected by the General Partner that is in
accordance with Section 706(d) of the Code. Except as otherwise agreed by the General Partner, all
distributions of Available Cash with respect to which the Partnership Record Date is before the
date of such transfer, assignment, exchange or redemption shall be made to the transferor

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

     E. In addition to any other restrictions on transfer herein contained, including without
limitation the provisions of this Article 11, in no event may any transfer or assignment of
a Partnership Interest by any Partner (including pursuant to a Redemption or exchange for REIT
Shares by the Partnership or the General Partner) be made (i) to any person or entity who lacks the
legal right, power or capacity to own a Partnership Interest; (ii) in violation of applicable law;
(iii) except with the consent of the General Partner, which may be given or withheld in its sole
and absolute discretion, 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) except with the consent of the General Partner, which may be given or withheld in
its sole and absolute discretion, if in the opinion of legal counsel to the Partnership such
transfer could cause a termination of the Partnership for federal or state income tax purposes
(except as a result of the Redemption or exchange for REIT Shares of all Partnership Interests held
by all Limited Partners or pursuant to a transaction expressly permitted under Section
11.2); (v) if in the opinion of counsel to the Partnership such transfer could 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 REIT Shares of all Partnership Interests held by all
Limited Partners); (vi) if such transfer could, in the opinion of counsel to the Partnership, cause
the Partnership to become, with respect to any employee benefit plan subject to Title I of ERISA, a
“party-in-interest” (as defined in Section 3(14) of ERISA) or a “disqualified person” (as defined
in Section 4975(c) of the Code); (vii) if such transfer could, in the opinion of counsel to the
Partnership, cause any portion of the assets of the Partnership to constitute assets of any
employee benefit plan pursuant to Department of Labor Regulations Section 2510.2-101; (viii) if
such transfer requires the registration of such Partnership Interest pursuant to any applicable
federal or state securities laws; (ix) except with the consent of the General Partner, which may be
given or withheld in its sole and absolute discretion, if such transfer (1) could be treated as
effectuated through an “established securities market” or a “secondary market” (or the substantial
equivalent thereof) within the meaning of Section 7704 of the Code, (2) could cause the Partnership
to become a “publicly traded partnership,” as such term is defined in Sections 469(k)(2) or 7704(b)
of the Code, (3) could be in violation of Section 3.4.E(5), or (4) could cause the
Partnership to fail one or more of the Safe Harbors (as defined below); (x) if such transfer
subjects the Partnership to be regulated under the Investment Company Act of 1940, the Investment
Advisors Act of 1940 or the Employee Retirement Income Security Act of 1974, each as amended; (xi)
except with the consent of the General Partner, which may be given or withheld in its sole
discretion, if the transferee or assignee of such Partnership Interest is unable to make the
representations set forth in Section 3.4.C; (xii) if such transfer is 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,
except with the consent of the General Partner, which may be given or withheld in its sole and
absolute discretion; and provided, that, as a condition to granting such consent the lender may be
required to enter into an arrangement with the Partnership and the General Partner to redeem or
exchange for the REIT Shares Amount any OP 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; or
(xiii) if in the opinion of legal counsel for the Partnership such transfer could adversely affect
the ability of the General Partner to continue to qualify as a REIT or, except with the consent of
the General Partner, which may be given or withheld in its sole and absolute discretion, subject
the General Partner to any additional taxes under Section 857 or Section 4981 of the Code.

     F. The General Partner shall monitor the transfers of interests in the Partnership (including
any acquisition of OP Units by the Partnership or the General Partner) to determine (i) if such
interests could be treated as 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 such transfers of interests could result in the Partnership being unable to qualify
for the “safe harbors” set forth in Regulations Section 1.7704-1 (or such other guidance
subsequently published by the IRS setting forth safe harbors under which interests will not be
treated as “readily tradable on a secondary market (or the

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substantial equivalent thereof)” within the meaning of Section 7704 of the Code) (the “Safe
Harbors”). The General Partner shall have the authority (but shall not be required) to take any
steps it determines are necessary or appropriate in its sole and absolute discretion to prevent any
trading of interests which could cause the Partnership to become a “publicly traded partnership”
within the meaning of Code Section 7704, or any recognition by the Partnership of such transfers,
or to ensure that one or more of the Safe Harbors is met.

Section 11.7 Call Right Attributable to the Special General Partner Interest

     A. In the event of a “Trigger Event” (as defined in Section 11.7B hereof), the
Partnership shall have the right (the “Call Right”) to redeem all, or any portion, of the Special
General Partner Interest. The Partnership shall exercise the Call Right by providing the Special
General Partner with written notice of its desire to exercise the Call Right within sixty (60) days
of the occurrence of a Trigger Event. The purchase price to be paid by the Partnership for the
portion of the Special General Partner Interest that is subject to the Call Right shall equal the
fair market value of such Interest as determined by Appraisal, and, subject to Section 11.C
below, shall be paid in cash or in REIT Shares (at the option of the Special General Partner)
within one hundred twenty (120) days after the Partnership provides the written notice required
under this Section 11.7.A.

     B. For purposes of this Section 11.7, a Trigger Event means, at any time after the
second anniversary of the Effective Date, the:

	 	(1)	 	expiration of the Advisory Agreement with the consent of the
Advisor;
	 
	 	(2)	 	termination of the Advisory Agreement for any reason other
than by the Advisor if an Affiliate of the Advisor does not serve as the
advisor under any replacement advisory agreement; or
	 
	 	(3)	 	resignation of the Advisor under the Advisory Agreement for
“Good Reason” (as defined in the Advisory Agreement).

     C. In the event that the Partnership exercises the Call Right as a result of a termination of
the Advisory Agreement for “Cause” (as defined in the Advisory Agreement), the Partnership shall
have the option to redeem all or a portion of the Special General Partner Interest by issuing its
promissory note with (i) a term of five (5) years; (ii) annual installments of principal payable
ratably over the term of the note; and (iii) a market rate of interest.

Section 11.8 Put Right of General Partner

          The General Partner shall have the right at any time (the “GP Put Right”) to require the
Partnership to redeem any portion of the General Partner Interest for the purpose of providing the
General Partner with sufficient funds to enable it to make redemptions of its stock. The General
Partner shall exercise the GP Put Right at any time by providing the Partnership with written
notice of its desire to exercise the GP Put Right. The purchase price to be paid by the
Partnership for the portion of the General Partner Interest that the General Partner desires to be
redeemed shall equal the fair market value of such portion as determined by Appraisal, and shall be
paid in cash within one hundred twenty (120) days after the General Partner provides the written
notice required under this Section 11.8. In the event that the General Partner exercises
the GP Put Right, the OP Units held by the General Partner shall be reduced as appropriate.

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ARTICLE 12.

ADMISSION OF PARTNERS

Section 12.1 Admission of Successor General Partner

          A successor to all of the General Partner’s General Partner Interest pursuant to Section
11.2 who is proposed to be admitted as a successor General Partner shall be admitted to the
Partnership as the General Partner, effective upon such transfer. Any such transferee shall carry
on the business of the Partnership without dissolution. In each case, the admission shall be
subject to the 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. In the case of such admission on any day other than the first
day of a Partnership Year, all items attributable to the General Partner Interest for such
Partnership Year shall be allocated between the transferring General Partner and such successor as
provided in Article 11.

Section 12.2 Admission of Additional Limited Partners

     A. After the admission to the Partnership of the initial Limited Partners on the date hereof,
a Person who makes a Capital Contribution to the Partnership in accordance with this Agreement
shall be admitted to the Partnership as an Additional Limited Partner only 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 2.4 and (ii) such other documents or instruments as may be required in
the discretion of the General Partner in order to effect such Person’s admission as an Additional
Limited Partner.

     B. Notwithstanding anything to the contrary in this Section 12.2, no Person shall be
admitted as an Additional Limited Partner without the consent of the General Partner, which consent
may be given or withheld in the General Partner’s sole and absolute discretion. The admission of
any Person as an Additional Limited Partner shall become effective on the date upon which the name
of such Person is recorded on the books and records of the Partnership, following the receipt of
the Capital Contribution in respect of such Limited Partner and the consent of the General Partner
to such admission. If any Additional Limited Partner is admitted to the Partnership on any day
other than the first day of a Partnership Year, then Net Income, Net Loss, each item thereof and
all other items allocable among Partners and Assignees for such Partnership Year shall be allocated
among such Limited Partner and all other Partners and Assignees by taking into account their
varying interests during the Partnership Year using a method selected by the General Partner that
is in accordance with Section 706(d) of the Code. 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 (other than in its capacity as an
Assignee) and, except as otherwise agreed to by the Additional Limited Partners and the General
Partner, all distributions of Available Cash thereafter shall be made to all 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 of Exhibit
A) and, if required by law, shall prepare and file an amendment to the Certificate and may for this
purpose exercise the power of attorney granted pursuant to Section 2.4.

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ARTICLE 13.

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 (selected as described in Section 13.1.B below) 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 (each a “Liquidating Event”):

     A. the expiration of its term as provided in Section 2.5;

     B. an event of withdrawal of the General Partner, as defined in the Act, unless, within 90
days after the withdrawal, all of the remaining Partners agree in writing, in their sole and
absolute discretion, to continue the business of the Partnership and to the appointment, effective
as of the date of withdrawal, of a substitute General Partner;

     C. subject to compliance with Section 11.2 an election to dissolve the Partnership
made by the General Partner, in its sole and absolute discretion;

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

     E. any sale or other disposition of all or substantially all of the assets of the Partnership
or a related series of transactions that, taken together, result in the sale or other disposition
of all or substantially all of the assets of the Partnership;

     F. the Incapacity of the General Partner, unless all of the remaining Partners in their sole
and absolute discretion agree in writing to continue the business of the Partnership and to the
appointment, effective as of a date prior to the date of such Incapacity, of a substitute General
Partner;

     G. the redemption or exchange for REIT Shares of all Partnership Interests (other than those
of the General Partner) pursuant to this Agreement; or

     H. 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
the entry of such order or judgment all of the remaining Partners agree in writing 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. 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, in the event 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 shares of stock in the General Partner) shall
be applied and distributed in the following order:

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          (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 other Partners; and

          (4) The balance, if any, to the General Partner, the Special General Partner and the Limited
Partners in proportion to their positive Capital Account balances, determined after taking into
account all Capital Account adjustments for all prior periods and the Partnership taxable year
during which the liquidation occurs (other than those made as a result of the liquidating
distribution set forth in this Section 13.2.A(4)).

     B. 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) and/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 Capital Contribution Obligation

          If any Partner has a deficit balance in his, her, or its Capital Account (after giving effect
to all contributions, distributions and allocations for the taxable years, including the year
during which such liquidation occurs), such Partner shall have no obligation to make any
contribution to the capital of the Partnership with respect to such deficit, and such deficit at
any time shall not be considered a debt owed to the Partnership or to any other Person for any
purpose whatsoever, except to the extent otherwise expressly agreed to by such Partner and the
Partnership.

Section 13.4 Compliance with Timing Requirements of Regulations

          In the discretion of the Liquidator or 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 13 may be:

          (1) 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. 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 Liquidator or the General Partner, in the same proportions and 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

          (2) withheld or escrowed to provide a reasonable reserve for Partnership liabilities
(contingent or otherwise) and to reflect the unrealized portion of any installment obligations owed
to the Partnership,

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provided, that such withheld or escrowed amounts shall be distributed to the
General Partner and Limited Partners in the manner and priority set forth in Section 13.2.A
as soon as practicable.

Section 13.5 Deemed Distribution and Recontribution

          Notwithstanding any other provision of this Article 13, in the event the Partnership
is liquidated within the meaning of Regulations Section 1.704-1(b)(2)(ii)(g) but no Liquidating
Event has occurred, the Partnership’s property shall not be liquidated, the Partnership’s
liabilities shall not be paid or discharged, and the Partnership’s affairs shall not be wound up.
Instead, the Partnership shall be deemed to have contributed all of its assets and liabilities to a
new partnership in exchange a for an interest in the new partnership. Immediately thereafter, the
Partnership shall be deemed to distribute interests in the new partnership to the General Partner
and Limited Partners in proportion to their respective interests in the Partnership in liquidation
of the Partnership.

Section 13.6 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 his Capital Contribution and shall have no right or
power to demand or receive property from the General Partner. No Limited Partner shall have
priority over any other Limited Partner as to the return of his Capital Contributions,
distributions or allocations.

Section 13.7 Notice of Dissolution

          In the event a Liquidating Event occurs or an event occurs that would, but for provisions of
Section 13.1, result in a dissolution of the Partnership, the General Partner shall, within
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) and shall publish notice thereof in a newspaper of general circulation in each
place in which the Partnership regularly conducts business (as determined in the discretion of the
General Partner).

Section 13.8 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 and all
qualifications of the Partnership as a foreign limited partnership in jurisdictions shall be
cancelled and such other actions as may be necessary to terminate the Partnership shall be taken.

Section 13.9 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, in order to
minimize any losses otherwise attendant upon such winding-up, and the provisions of this Agreement
shall remain in effect between the Partners during the period of liquidation.

Section 13.10 Waiver of Partition

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

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ARTICLE 14.

AMENDMENT OF PARTNERSHIP AGREEMENT; CONSENTS

Section 14.1 Amendments

     A. The actions requiring consent or approval of the Partners or of the Limited Partners
pursuant to this Agreement, including Section 7.3, or otherwise pursuant to applicable law,
are subject to the procedures in this Article 14.

     B. Amendments to this Agreement requiring the consent or approval of Limited Partners may be
proposed by the General Partner or by Limited Partners holding twenty-five percent (25%) or more of
the Partnership Interests held by Limited Partners. Following such proposal, the General Partner
shall submit any proposed amendment to the Partners or to the Limited Partners, as applicable. The
General Partner shall seek the written consent of the Limited Partners 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 15 days, and failure to respond in
such time period shall constitute a consent which is consistent with the General Partner’s
recommendation (if so recommended) with respect to the proposal; provided, that, an
action shall become effective at such time as requisite consents are received even if prior to such
specified time.

Section 14.2 Action by the Partners

     A. 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 twenty-five percent
(25%) or more of the Partnership Interests held by Limited Partners. The notice 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 days nor more than 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 the Limited Partners or of
the Partners is permitted or required under this Agreement, such vote or Consent may be given at a
meeting of Partners or may be given in accordance with the procedure prescribed in Section
14.1.

     B. Any action required or permitted to be taken at a meeting of the Partners may be taken
without a meeting if a written consent setting forth the action so taken is signed by the
percentage as is expressly required by this Agreement for the action in question. Such consent may
be in one instrument or in several instruments, and shall have the same force and effect as a vote
of the Percentage Interests of the Partners (expressly required by this Agreement). 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 effective date so certified.

     C. 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 his attorney-in-fact. No proxy shall be valid after the expiration of 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.

     D. 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 deems appropriate.

     E. On matters on which Limited Partners are entitled to vote, each Limited Partner shall have
a vote equal to the number of OP Units held.

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ARTICLE 15.

GENERAL PROVISIONS

Section 15.1 Addresses and Notice

          Any notice, demand, request or report required or permitted to be given or made to a Partner
or Assignee under this Agreement shall be in writing and shall be deemed given or made when
delivered in person or when sent by first class United States mail or by other means of written
communication to the Partner or Assignee at the address set forth in Exhibit A 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” and “Sections” are to Articles and Sections 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 respect to Indemnitees, 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 or delay 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 any
breach thereof shall constitute waiver of any such breach or any other covenant, duty, agreement or
condition.

Section 15.8 Counterparts

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

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Section 15.9 Applicable Law

          This Agreement shall be construed 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 Entire Agreement

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

Section 15.12 No Rights as Stockholders

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

[the remainder of this page is intentionally left blank]

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

	 	 	 	 	 	 	 	 	 
	General Partner:	 	CORPORATE PROPERTY ASSOCIATES 17-

GLOBAL INCORPORATED,
	 	 	a Maryland company
	 
	 	 	 	 	 	 	 	 
	 

	 	By:
	 	/s/	 	 	 	 
	 	 	 	 	 
	 

	 	 	 	Name:	 	 	 	 
	 

	 	 	 	Title:
	 	 

	 	 
	 

	 	 	 	 	 	 

	 	 
	 
	 	 	 	 	 	 	 	 
	Special General Partner:	 	CAREY HOLDINGS LLC,
	 	 	a Delaware limited liability company
	 
	 	 	 	 	 	 	 	 
	 

	 	By:
	 	/s/	 	 	 	 
	 	 	 	 	 
	 

	 	 	 	Name:	 	 	 	 
	 

	 	 	 	Title:
	 	 

	 	 
	 

	 	 	 	 	 	 

	 	 

-55-

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