Document:

Exhibit 10.1

AMENDMENT NO. 4

TO

LOAN AND SECURITY AGREEMENT

AMENDMENT
NO. 4 (this “Amendment”),
dated as of December 28, 2006, by and among K-SEA
OPERATING PARTNERSHIP L.P. (the “Borrower”),
the several financial institutions party hereto (the “Lenders”),
KEYBANK NATIONAL ASSOCIATION, as
Administrative Agent for the Lenders (in such capacity, the “Administrative Agent”) and as
collateral trustee for the Lenders, and LASALLE BANK, NATIONAL
ASSOCIATION, as syndication agent.

RECITALS

A.            Borrower, the Lenders and the
Administrative Agent are parties to a Loan and Security Agreement, dated as of
March 24, 2005 (as heretofore amended, and as it may be further amended,
restated, supplemented or otherwise modified from time to time, the “Loan Agreement”).  Unless otherwise defined herein, all
capitalized terms used herein or in the Acknowledgement and Consent annexed
hereto shall have the meanings ascribed to them in the Loan Agreement.

B.            Borrower has requested that the
Administrative Agent and the Lenders amend the Loan Agreement in certain
respects.

C.            The Administrative Agent has advised
Borrower that the Lenders are willing to agree to its requests to amend the
Loan Agreement on the terms and subject to the conditions set forth in this
Amendment.

Accordingly,
in consideration of the foregoing, the parties hereto hereby agree as follows:

1.             AMENDMENTS TO LOAN AGREEMENT.

(a)           Additional Definitions.  Section 1.01 of the Loan Agreement is hereby
amended by adding the following new definitions in the appropriate alphabetical
order:

“Amendment
No. 4” means Amendment No. 4 to Loan and Security Agreement,
dated as of December 28, 2006, among Borrower, the Lenders party thereto and
the Administrative Agent.

“Amendment
No. 4 Effective Date” means as of December 28, 2006.

“Fair
Market Value” means, with respect to any Pool Vessel, the fair
market value of such Pool Vessel as reasonably determined by the Administrative
Agent or by independent appraisers appointed by the Administrative Agent at the
expense of Borrower.

“Net Worth” means the excess of total
assets over total liabilities, total assets and total liabilities each to be
determined in accordance with

 

 

GAAP consistent with those applied in the preparation
of the Financial Statements referred to in Section 6.01 hereof.

“Total
Capitalization” means, as of any date, the sum of Net Worth at
such date plus Total Funded Debt at such date.

“Total
Funded Debt to Total Capitalization Ratio” means, at any date of determination, the ratio of
Total Funded Debt divided by Total Capitalization.

(b)           Amendments to Definitions.

(i)            Applicable Margin.  Section 1.01 of the Loan Agreement is hereby amended by deleting the
definition of “Applicable Margin” in its entirety and substituting the
following therefor:

 “Applicable Margin”
means, at all times during the applicable periods set forth below: (a) with
respect to Base Rate Loans, the percentage set forth below under the heading “Base
Rate Margin” and adjacent to such period, (b) with respect to LIBOR Loans, the
percentage set forth below under the heading “LIBOR Margin” and adjacent to
such period and (c) with respect to the Commitment Fees, the percentage set
forth below under the heading “Commitment Fee Margin” and adjacent to such
period:

	
  Period

  	
   

  	
  Applicable Margin

  	
   

  
	
  When the Total

  Funded Debt to

  EBITDA Ratio

  is greater than

  or equal to

  	
   

  	
  And less

  than

  	
   

  	
  Base Rate

  Margin

  	
   

  	
  LIBOR

  Margin

  	
   

  	
  Commitment

  Fee Margin

  	
   

  
	
   

  	
  3.50:1.00

  	
   

  	
   

  	
   

  	
   

  	
  0.250%

  	
   

  	
  1.600%

  	
   

  	
  0.300%

  	
   

  
	
   

  	
  3.00:1.00

  	
   

  	
   

  	
  3.50:1.00

  	
   

  	
  0.000%

  	
   

  	
  1.350%

  	
   

  	
  0.200%

  	
   

  
	
   

  	
  2.50:1.00

  	
   

  	
   

  	
  3.00:1.00

  	
   

  	
  0.000%

  	
   

  	
  1.200%

  	
   

  	
  0.200%

  	
   

  
	
   

  	
  2.00:1.00

  	
   

  	
   

  	
  2.50:1.00

  	
   

  	
  0.000%

  	
   

  	
  0.950%

  	
   

  	
  0.150%

  	
   

  
	
   

  	
   

  	
  2.00:1.00

  	
   

  	
  0.000%

  	
   

  	
  0.700%

  	
   

  	
  0.150%

  	
   

  

Changes in the Applicable Margin resulting from a
change in the Total Funded Debt to EBITDA Ratio shall be based upon the
certificate most recently delivered under Section 6.01(b) and shall become
effective on the first day of the month immediately succeeding the date such
certificate is required to be delivered to the Administrative Agent pursuant to
Section 6.01(b).  Notwithstanding anything
to the contrary in this definition, if Borrower shall fail to deliver to the
Administrative Agent such a certificate on or prior to any date required by
Section 6.01(b), the Total

 2
 

 

 

Funded Debt to EBITDA Ratio shall be deemed to be
greater than 3.50:1.00 from and
including such date to the first day of the month immediately succeeding the
date of delivery to the Administrative Agent of such certificate.

(ii)           Asset Coverage Ratio. 
Section 1.01 of the Loan
Agreement is hereby amended by deleting the definition of “Asset
Coverage Ratio” in its
entirety and substituting the following therefor:

“Asset
Coverage Ratio” means, as of any date of determination, the
ratio of the Fair Market Value of all Pool Vessels that are part of the
Collateral divided by the aggregate Revolving Credit Exposure of all Lenders.

(iii)          Borrowing Base.  Section 1.01 of the Loan Agreement is hereby
amended by deleting the definition of “Borrowing Base” in its entirety and substituting the
following therefor:

“Borrowing Base” means 80% of the Fair
Market Value of the Pool Vessels.

(iv)          Qualified Pool Vessels. 
Section 1.01 of the Loan
Agreement is hereby amended by deleting the definition of “Qualified
Pool Vessels” in its
entirety and substituting the following therefor:

“Qualified Pool Vessels” means Pool
Vessels that are documented, coastwise eligible tugs, AT/Bs and double-hulled
barges and are acceptable in age, construction, condition and trade employment
to the Administrative Agent; provided, that during the period from the
Effective Date to the third Anniversary Date, “Qualified Pool Vessels”
may also include single-hulled barges having a Fair Market Value not in excess
of five percent (5%) of the aggregate Fair Market Value of all Pool Vessels.

(v)           Tangible Capitalization.  Section 1.01 of the Loan Agreement is hereby amended by deleting the
definition of “Tangible Capitalization” in its entirety.

(vi)          Total Funded Debt to Tangible Capitalization Ratio.  Section 1.01 of the Loan Agreement is hereby amended by deleting the
definition of “Total Funded Debt to Tangible Capitalization
Ratio” in its entirety.

(c)           Prepayment of Loans.  Section 2.09(d) of the Loan Agreement is
hereby amended by deleting the phrase “Orderly Liquidation Value” in clause
(ii) thereof and substituting “Fair Market Value” therefor.

(d)           Prepayment of Loans.  Section 2.09(e) of the Loan Agreement is
hereby amended by deleting the phrase “Orderly Liquidation Value” in clause
(ii) thereof and substituting “Fair Market Value” therefor.

(e)           Payments Generally; Pro Rata Treatment; Sharing of
Setoffs.  Section
2.14(b)(ii) of the Loan Agreement is hereby amended by deleting the phrase 

 3
 

 

 

“Orderly
Liquidation Value” each time it appears therein and substituting “Fair Market
Value” therefor.

(f)            Substitute of Pool Vessel.  Section 3.02 of the Loan Agreement is hereby
amended by deleting the phrase “Orderly Liquidation Value” each time it appears
therein and substituting “Fair Market Value” therefor.

(g)           Fair Market Value.  Section 3.03 of the Loan Agreement is hereby
deleted in its entirety and the following substituted therefor:

Section 3.03         Fair Market Value.

(a)  Based on the most recently completed
Appraisal of the Pool Vessels delivered to the Administrative Agent, the
aggregate Fair Market Value of the Pool Vessels shall at all times be not less
than the greater of (i) $62,500,000.00 and (ii) a Fair Market Value such that
an Asset Coverage Ratio of not less than 1.25 to 1.00 is maintained, provided,
that in no event through the third anniversary of the Effective Date shall more
than five percent (5%) of the aggregate Fair Market Value of the Pool Vessels
be attributable to Non-Qualified Pool Vessels and thereafter Non-Qualified Pool
Vessels shall not be included in Pool Vessels.

(b)  In the event any Appraisal delivered to the
Administrative Agent performed at any time after the Effective Date
demonstrates that the aggregate Fair Market Value of the Pool Vessels is less
than the greater of (i) $62,500,000.00 and (ii) a Fair Market Value such that
an Asset Coverage Ratio of not less than 1.25 to 1.00 is maintained, Borrower
shall promptly, and in any event within 10 Business Days, pledge additional
vessels acceptable to the Administrative Agent, and the Proceeds thereof, so
that, after giving effect to such pledge of additional vessels, the aggregate
Fair Market Value of the Pool Vessels is equal to the greater of (i)
$62,500,000.00 and (ii) a Fair Market Value such that an Asset Coverage Ratio
of not less than 1.25 to 1.00 is maintained.

(c)  In the event any Appraisal delivered to the
Administrative Agent performed at any time after the Effective Date
demonstrates that that the aggregate Fair Market Value of the Pool Vessels
exceeds the greater of (i) $62,500,000.00, and (ii) a Fair Market Value such
that an Asset Coverage Ratio of not less than 1.25 to 1.00 is maintained,
Borrower may, upon the delivery of a written request therefor delivered to the
Administrative Agent, request the consent of the Lenders (which shall not be
unreasonably withheld) to the release by the Collateral Trustee, at Borrower’s
expense, of its Lien on one or more Pool Vessels (and related Assignments)
described in such request, commencing with Non-Qualified Pool Vessels; provided that both before and after giving effect to such
release, (i) no Default or Event of Default shall have occurred and be
continuing or result therefrom, (ii) the aggregate Fair Market Value of the
Pool Vessels shall be not less than the greater of (i) $62,500,000.00 and (ii)
a Fair Market Value such that the Asset Coverage Ratio shall not be less than
1.25 to 1.00, and (iii) Borrower shall be in compliance with the financial
covenants under Sections 7.01, 7.02, 7.03 and 7.04, and 

 4
 

 

 

Borrower shall deliver to the Administrative Agent
prior to any such release a certificate in reasonable detail evidencing
compliance by Borrower with the foregoing conditions.  Notwithstanding the foregoing, the value of
any vessel acquired, retrofitted or rebuilt with any Loan shall not be included
for purposes of determining the aggregate Fair Market Value of the Pool Vessels
as collateral while such vessel is under construction but may be included upon
completion of work and redelivery to Borrower.

(h)           Total Funded Debt to Total Capitalization Ratio.  Section 7.02 of the Loan Agreement is hereby
deleted in its entirety and the following substituted therefor:

Section
7.02         Total Funded Debt to Total
Capitalization Ratio. 
Borrower shall not permit the Total Funded Debt to Total Capitalization
Ratio as of the end of any fiscal quarter to be greater than 0.65 to 1.00.

(i)            General. 
All references to “this Agreement” in the Loan Agreement and to “the
Loan Agreement” in the other Loan Documents shall be deemed to refer to the
Loan Agreement as amended hereby.

2.             CONDITIONS TO EFFECTIVENESS.  This Amendment shall be effective upon the
satisfaction of each of the following conditions:

(a)           The Administrative
Agent (or its counsel) shall have received from each party hereto either
(x) a counterpart of this Amendment signed on behalf of such party or
(y) written evidence satisfactory to the Administrative Agent (which may
include telecopy transmission of a signed signature page of this
Amendment) that such party has signed a counterpart of this Amendment.

(b)           The Lenders shall be
reasonably satisfied that no material adverse change in the business, assets,
operations, properties, condition (financial or otherwise), liabilities
(including contingent liabilities) or material agreements of Borrower and its
Subsidiaries has occurred since June 30, 2006.

(c)           There shall be no
injunction, writ, preliminary restraining order or other order of any nature
issued by any Governmental Authority in any respect affecting the transactions
provided for in this Amendment and no action or proceeding by or before any
Governmental Authority shall have been commenced and be pending or, to the
knowledge of Borrower, threatened, seeking to prevent or delay the transactions
contemplated by this Amendment or challenging any other terms and provisions
hereof or thereof or seeking any damages in connection herewith or therewith.

(d)           The representations
and warranties contained in the Loan Agreement shall be true and correct in all
material respects, except
to the extent such representations and warranties relate to an earlier date
and, after giving effect to the amendments set forth in Section 1 hereof, no
Default or Event of Default shall exist.

(e)        The Administrative Agent shall have
received and accepted a desktop or visual Appraisal of each of the Pool
Vessels, which shall be in form and substance satisfactory to the
Administrative Agent, and which shall demonstrate that the

 5
 

 

 

Fair Market Value of the Pool Vessels as of the Amendment No. 4
Effective Date is not less than $93,750,000.00.

(f)            The Administrative
Agent shall have received (i) for the account of the Lenders party hereto pro
rata in accordance with their respective Commitments, payable on the Amendment
No. 4 Effective Date, an amendment fee equal to the product of 0.075%
multiplied by the Maximum Amount and (ii) all other amounts due and payable on
or prior to the Amendment No. 4 Effective Date, including, to the extent
invoiced, reimbursement or payment of all out-of-pocket expenses
required to be reimbursed or paid by Borrower hereunder.

(g)           All legal matters
with respect to and all legal documents (including, but not limited to, the
Loan Documents) executed in connection with the transactions contemplated by
this Amendment shall be satisfactory to counsel for the Administrative Agent.

(h)           Borrower shall have
paid the reasonable fees and disbursements of counsel to the Administrative
Agent and the Lenders in connection with this Amendment.

The
Administrative Agent shall notify Borrower and the Lenders of the Amendment No.
4 Effective Date, and such notice shall be conclusive and binding.

3.             REPRESENTATIONS AND WARRANTIES.  Borrower hereby represents and warrants to
the Administrative Agent and the Lenders that:

(a)           The representations
and warranties set forth in the Loan Documents are true and correct in all
material respects as of the date hereof and with the same effect as though made
on and as of the date hereof, except to the extent such representations and warranties relate to an
earlier date.

(b)           No Default or Event
of Default and no event or condition which, with the giving of notice or lapse
of time or both, would constitute such a Default or Event of Default, now
exists or would exist.

(c)           (i)  The execution, delivery and performance by
Borrower of this Amendment is within its organizational powers and have been
duly authorized by all necessary action (corporate or otherwise) on the part of
Borrower, (ii) this Amendment is the legal, valid and binding obligation of
Borrower, enforceable against Borrower in accordance with its terms, and (iii)
neither this Amendment nor the execution, delivery and performance by Borrower
hereof: (A) contravenes the terms of Borrower’s organization documents, (B)
conflicts with or results in any breach or contravention of, or the creation of
any Lien under, any document evidencing any contractual obligation to which
Borrower is a party or any order, injunction, writ or decree to which Borrower
or its property is subject, or (C) violates any requirement of law.

4.             EFFECT; NO WAIVER.

(a)           Borrower hereby (i)
reaffirms and admits the validity and enforceability of the Loan Documents and
all of its obligations thereunder and (ii) agrees and admits that it has no
existing defenses to or offsets against any such obligation. Except as
specifically set forth herein, the Loan Agreement and the other Loan

 6
 

 

Documents
shall remain in full force and effect in accordance with their terms and are
hereby ratified and confirmed.  The
execution, delivery and effectiveness of this Amendment shall not operate as a
waiver of any existing or future Default or Event of Default, whether known or
unknown or any right, power or remedy of the Administrative Agent or the
Lenders under the Loan Agreement, nor constitute a waiver of any provision of
the Loan Agreement, except as specifically set forth herein.

(b)           Borrower hereby (i)
reaffirms all of its agreements and obligations under the Loan Documents, (ii)
reaffirms that all Obligations of Borrower under or in connection with the Loan
Agreement as amended hereby are “Obligations”
as that term is defined in the Loan Documents and (iii) reaffirms that all such
Obligations continue to be secured by the Loan Documents, which remain in full
force and effect and are hereby ratified and confirmed.

5.             MISCELLANEOUS.

(a)           Borrower shall pay
the Administrative Agent upon demand for all reasonable expenses, including
reasonable attorneys’ fees and expenses of the Administrative Agent, incurred
by the Administrative Agent in connection with the preparation, negotiation and
execution of this Amendment.

(b)           THIS AMENDMENT SHALL
BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH THE INTERNAL LAWS (AS OPPOSED
TO THE CONFLICTS OF LAW PROVISIONS, BUT INCLUDING SECTIONS 5-1401 AND 5-1402 OF
THE GENERAL OBLIGATIONS LAW OF THE STATE OF NEW YORK) AND DECISIONS OF THE
STATE OF NEW YORK.

(c)           This Amendment shall
be binding upon Borrower, the Administrative Agent and the Lenders and their
respective successors and assigns, and shall inure to the benefit of Borrower,
the Administrative Agent and the Lenders and the respective successors and
assigns of the Administrative Agent and the Lenders.

(d)           This Amendment may
be executed in any number of counterparts and by different parties hereto in
separate counterparts, each of which when so executed and delivered shall be
deemed to be an original and all of which taken together shall constitute one
and the same instrument.

[Signature pages follow.]

 7
 

 

AS EVIDENCE of the agreement by the parties hereto to
the terms and conditions herein contained, each such party has caused this
Amendment to be executed on its behalf.

 

	
   

  	
  K-SEA OPERATING PARTNERSHIP L.P.,

  by its general partner K-Sea OLP GP, LLC,

  as Borrower

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ John J. Nicola

  	
   

  
	
   

  	
  Name:
  John J. Nicola

  
	
   

  	
  Title: Chief
  Financial Officer

  

 

	
  

  	
  KEYBANK
  NATIONAL ASSOCIATION,

  for itself as Lender, and as Administrative Agent

  and as Collateral Trustee

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Steven B. Vitale

  	
   

  
	
   

  	
  Name: Steven B.
  Vitale

  
	
   

  	
  Title: Director

  

 

	
  

  	
  LASALLE
  BANK NATIONAL ASSOCIATION,

  as Syndication Agent and Lender

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Kathleen L. Ross

  	
   

  
	
   

  	
  Name: Kathleen
  L. Ross

  
	
   

  	
  Title: Senior
  Vice President

  

 

	
  

  	
  CITIZENS BANK OF PENNSYLVANIA

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Devon Starks

  	
   

  
	
   

  	
  Name: Devon
  Starks

  
	
   

  	
  Title: Senior
  Vice President

  

 

	
  

  	
  WACHOVIA
  BANK, NATIONAL ASSOCIATION

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Stephen Karp

  	
   

  
	
   

  	
  Name: Stephen
  Karp

  
	
   

  	
  Title: Vice
  President

  

 

 8Exhibit 10.1

AMENDED AND RESTATED

AGREEMENT OF LIMITED PARTNERSHIP

OF

BEHRINGER HARVARD OPPORTUNITY OP I, LP

January 1, 2007

 

AMENDED AND RESTATED

AGREEMENT OF LIMITED PARTNERSHIP

OF

BEHRINGER HARVARD OPPORTUNITY OP I, LP

January 1, 2007

This Amended and Restated Agreement of Limited
Partnership (this “Agreement”) is
entered into effective as of the 1st day of January, 2007 by and among BHO, Inc., a
Delaware corporation (the “General Partner”),
BHO Business Trust, a Maryland business trust (the “Original
Limited Partner”), Behringer Harvard Opportunity REIT I, Inc., a
Maryland corporation (the “Company”) and
the Limited Partner(s) set forth or which may, in the future, be set forth on Exhibit
A hereto, as amended from time to time, with respect to Behringer Harvard
Opportunity OP I, LP  (the “Partnership”), a limited partnership formed under the laws
of the State of Texas, pursuant to a Certificate of Limited Partnership filed
with the Office of the Secretary of State of the State of Texas effective as of
November 24, 2004.

RECITALS

WHEREAS, an Agreement
of Limited Partnership was entered into effective as of the 24th day of November, 2004 (the “Original Agreement”) by and among the Company as the general
partner and BHO Partners, LLC, a Delaware limited liability company, as the
original limited partner, in order to set forth the terms and conditions under which the
Partnership will be operated as well as the rights, obligations, and
limitations of the parties thereto and any additional Limited Partners with
respect to each other and the Partnership as a whole; and

WHEREAS,
simultaneously with the execution of this Agreement, Behringer Harvard
Opportunity REIT I, Inc. transferred 100% of its General Partnership Interest
to its wholly-owned subsidiary, BHO, Inc.; and

WHEREAS,
simultaneously with the execution of this Agreement, BHO Partners, LLC merged
with and into BHO Business Trust; and

WHEREAS, BHO, Inc. has
executed any and all documents necessary to be admitted as a Partner in the
Partnership in substitution of Behringer Harvard Opportunity REIT I, Inc.; and

WHEREAS, BHO Business
Trust has executed any and all documents necessary to be admitted as a Partner
in the Partnership in substitution of BHO Partners, LLC; and

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

 

AGREEMENT

ARTICLE I

DEFINED TERMS

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

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

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

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

“Additional Securities” means any
additional REIT Shares (other than REIT Shares issued in connection with an
exchange pursuant to Section 8.05 hereof) or rights, options, warrants or
convertible or exchangeable securities containing the right to subscribe for or
purchase REIT Shares, as set forth in Section 4.02(a)(ii).

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

“Advisor” or “Advisors”
means the Person or Persons, if any, appointed, employed or contracted with by
the Company pursuant to its Articles of Incorporation and responsible for directing
or performing the day-to-day business affairs of the Company, including any
Person to whom the Advisor subcontracts all or substantially all of such
functions.

“Affiliate” or “Affiliated” means, with respect to any
Person, (i) any Person directly or indirectly owning, controlling or holding,
with the power to vote, 10% or more of the outstanding voting securities of
such other Person; (ii) any Person 10% or more of whose outstanding voting
securities are directly or indirectly owned, controlled or held, with the power
to vote, by such other Person; (iii) any Person directly or indirectly
controlling, controlled by or under common control with such other Person; (iv)
any executive officer, director, trustee or general partner of such other
Person; and (v) any legal entity for which such Person acts as an executive
officer, director, trustee or general partner.

“Agreed Value” means (i) the fair market
value of a Partner’s non-cash Capital Contribution as of the date of
contribution as agreed to by such Partner and the General Partner as of the
date of contribution as set forth on Exhibit A hereto, as it may be
amended from time to time, or (ii) in the case of any contribution or
distribution of property other than cash not set forth on Exhibit A, the
fair market value of such property as determined by the General Partner at the
time such property is contributed or distributed, reduced by liabilities either
assumed by the Partnership or Partner upon such contribution or distribution or
to which such property is subject when the property is contributed or
distributed.

 2
 

 

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

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

“Call Notice” means a Call Notice, as
defined in Section 8.06(a) hereof and substantially in the form of Exhibit C
hereto.

“Call Right” has the meaning provided in
Section 8.06(a) hereof.

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

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

“Cash Amount” means an amount of cash
equal to the Value of the REIT Shares Amount on the date of receipt by the
General Partner of an Exchange Notice.

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

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

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

“Company” means Behringer Harvard
Opportunity REIT I, Inc., a Maryland corporation.

“Competent Independent Expert”
shall mean a Person with no material current or prior business or personal
relationship with the Advisor, the General Partner or the Partnership who is
engaged to a substantial extent in the business of rendering opinions regarding
the value of the assets of the type held by the Partnership and who is
qualified to perform such work. 
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.

“Conversion Factor” means 1.0, provided,
that in the event that the Company (i) declares or pays a dividend on its
outstanding REIT Shares in REIT Shares or makes a distribution to all holders
of its outstanding REIT Shares in REIT Shares, (ii) subdivides its outstanding
REIT Shares, or (iii) combines its outstanding REIT Shares into a smaller
number of REIT Shares, the Conversion Factor shall be adjusted by multiplying
the Conversion Factor by a fraction, the numerator of which shall be the number
of REIT Shares issued and outstanding on the record date for such dividend,
distribution, subdivision or combination (assuming for such purposes that such
dividend, distribution, subdivision or combination has occurred as of such
time), and the denominator of which shall be the actual number of 

 3
 

 

REIT
Shares (determined without the above assumption) issued and outstanding on such
date, and provided further, that in the event that an entity other than an
Affiliate of the Company shall become General Partner pursuant to any merger,
consolidation or combination of the Company with or into another entity (the “Successor Entity”), the Conversion Factor shall be adjusted
by multiplying the Conversion Factor by the number of shares of the Successor
Entity into which one REIT Share is converted pursuant to such merger,
consolidation or combination, determined as of the date of such merger,
consolidation or combination.  Any
adjustment to the Conversion Factor shall become effective immediately after
the effective date of such event retroactive to the record date, if any, for
such event; provided, however, that if the General Partner receives an Exchange
Notice after the record date, but prior to the effective date of such dividend,
distribution, subdivision or combination, the Conversion Factor shall be
determined as if the General Partner had received the Exchange Notice immediately
prior to the record date for such dividend, distribution, subdivision or
combination; and provided further, however, that if the General Partner, in its
sole and absolute discretion, causes the Partnership to make a distribution of
Partnership Units or to subdivide or combine the outstanding Partnership Units
in order to give equivalent effect to a dividend or distribution of REIT Shares
or a subdivision or combination or REIT Shares, then the Conversion Factor
shall remain the factor which it was immediately prior to such dividend or
distribution of REIT Shares or subdivision or combination of REIT Shares.

“Dissenting Limited Partner”
has the meaning provided in Section 12.03(a) hereof.

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

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

“Exchange Notice” means a Notice of
Exercise of Exchange Right, as defined in Section 8.05(a) hereof and
substantially in the form of Exhibit B hereto.

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

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

“General Partner” means BHO, Inc., a
Delaware corporation, and any Person who becomes a substitute or additional
General Partner as provided herein, and any successors thereto.

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

“GP Capital” means the aggregate of
Capital Contributions of cash made by the General Partner in accordance with
Sections 4.01 and 4.02 hereof.

“GP Minimum Return” means such amount as
may be necessary or required to allow the Company to meet its distribution
requirement for qualification as a REIT as set forth in Section 857 of the Code
and to avoid any federal income or excise tax liability imposed by the Code.

 4
 

 

“Holding Period” means, with respect to
Partnership Units acquired by Additional Limited Partners hereunder, the period
commencing on the date of issuance of such Units through and including the
fourth anniversary of such date of acquisition.

“Indemnitee” means (i) any Person made a
party to a proceeding by reason of its status as the General Partner, as the
sole owner of all of the voting securities of the General Partner, or a
director, officer or employee of the General Partner or the Partnership, and
(ii) such other Persons (including Affiliates of the General Partner or the
Partnership) as the General Partner may designate from time to time, in its
sole and absolute discretion.

“Independent Director” means a member of
the board of directors of the Company who is not on the date of determination,
and within the last two (2) years from the date of determination has not been,
directly or indirectly associated with the Company, the Sponsor or the Advisor
or any of their respective Affiliates by virtue of (i) ownership of an interest
in the Sponsor or the Advisor or any of their respective Affiliates, other than
the Company, (ii) employment by the Company, the Sponsor or the Advisor or any
of their respective Affiliates, (iii) service as an officer or director of the
Sponsor or the Advisor or their respective Affiliates, other than as a director
of the Company, (iv) performance of services, other than as a director of the
Company, (v) service as a director or trustee of more than three (3) real
estate investment trusts organized by the Sponsor or advised by the Advisor, or
(vi) maintenance of a material business or professional relationship with
the Company, the Sponsor or the Advisor or any of their respective
Affiliates.  A business or professional
relationship is considered “material” if the gross revenue derived by the director
from the Sponsor and the Advisor and their Affiliates exceeds five percent (5%)
of either the director’s annual gross income during either of the last two (2)
years or the director’s net worth on a fair market value basis.  An indirect relationship with the Sponsor or
the Advisor shall include circumstances in which a director’s spouse, parent,
child, sibling, mother- or father-in-law, son- or daughter-in-law or brother-
or sister-in-law is or has been associated with the Sponsor or the Advisor, any
of their respective Affiliates or the Company.

“Joint Venture” means any joint venture
or partnership arrangement in which the Partnership is a co-venturer or general
partner established to acquire or hold Properties, Mortgages or other
investments of the Company.

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

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

“Liquidating Event” has the meaning set
forth in Section 2.04 hereof.

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

“LP Capital” means the aggregate of
Capital Contributions in cash or cash equivalents and the Agreed Value of any
non-cash contributions to the Partnership made by a Limited Partner in
accordance with Sections 4.01 and 4.02 hereof.

“LP Return” means, with regard to any
Limited Partner, an amount equal to the aggregate cash dividends that would
have been payable to such Limited Partner with respect to the applicable fiscal
period if such Limited Partner had owned REIT Shares equal in number to the
number of Partnership 

 5
 

 

Units
owned by such Limited Partner during such fiscal period.

“Mortgage” means, in connection with
mortgage financing provided, invested in or purchased by the Partnership, any
note, deed of trust, security interest or other evidence of indebtedness or
obligations, which is secured or collateralized by real property owned by the
borrower under such note, deed of trust, security interest or other evidence of
indebtedness or obligations.

“Net Capital Proceeds” means the net
cash proceeds received by the Partnership in connection with (i) any Sale,
(ii) any borrowing or refinancing of borrowing(s) by the Partnership, (iii) any
condemnation or deeding in lieu of condemnation of all or a portion of any Property,
(iv) any collection in respect of property, hazard, or casualty insurance (but
not business interruption insurance) or any damage award; or (v) any other
transaction the proceeds of which, in accordance with generally accepted
accounting principles, are considered to be capital in nature, in each case,
after deduction of (a) all costs and expenses incurred by the Partnership with
regard to such transactions (including, without limitation, any repayment of
any indebtedness required to be repaid as a result of such transaction or which
the General Partner elects to pay out of the proceeds of such transaction,
together with accrued interest and premium, if any, thereon and any sales
commissions or other costs or expenses due and payable to any Person in connection
therewith, including to a Partner or its Affiliates), and (b) all amounts
expended by the Partnership for the acquisition of additional Properties,
Mortgages or other investments or for capital repairs or improvements to any
Property with such cash proceeds.

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

“Offering” means the offer and sale of
REIT Shares to the public by the Company.

“Original Limited Partner” means the
Limited Partner designated as such on Exhibit A hereto.

“Partner” means any General Partner or
Limited Partner.

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

“Partnership” means Behringer Harvard
Opportunity OP I, LP, a Texas limited partnership.

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

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

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

“Partnership Unit” means a fractional,
undivided share of the Partnership Interests of all Partners issued
hereunder.  The number of Partnership
Units held by the Original Limited Partner will, as of any relevant date, equal
the difference between (a) the product of the number of shares of the Company 

 6
 

 

issued
since the formation of the Company through such relevant date (adjusted to
reflect any subdivisions or combinations of shares of the Company through such
relevant date), multiplied by the inverse of the Conversion Factor as of such
relevant date (i.e., one (1) divided by the Conversion Factor as of such
relevant date), and (b) the sum of (i) the number of Partnership Units of the
Original Limited Partner deemed purchased or redeemed pursuant to Section 6.10
since the inception of the Partnership through such relevant date and (ii) all
Partnership Units held by the General Partner. 
It is acknowledged that the Original Limited Partner will contribute the
proceeds from the sale of shares in the Company to the Partnership and the
Partnership Units resulting from the contribution of such proceeds by the
Original Limited Partner to the Partnership will be issued by the Partnership
to the Original Limited Partner. 
Furthermore, it is acknowledged that if the Partnership makes a
distribution of Partnership Units or subdivides or combines the outstanding
Partnership Units in order to give equivalent effect to a dividend or
distribution of the Company’s shares or a subdivision or combination of the
Company’s shares, then the Partnership Units held by the Original Limited
Partner will not be entitled to any such distribution of Partnership Units or
affected by any such subdivision or combination of Partnership Units because
the number of the Original Limited Partner’s Partnership Units will have
already been adjusted by virtue of the dividend or distribution of the Company’s
shares or the subdivision or combination of the Company’s shares.

“Percentage Interest” means the
percentage ownership interest in the Partnership of each Partner, as determined
by dividing the number of Partnership Units owned by a Partner by the aggregate
number of Partnership Units owned by all Partners.

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

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

“Property” means any office, industrial
or other commercial real property in which the Partnership holds an ownership
interest, either directly or pursuant to the Partnership’s ownership of an
interest in a subsidiary which owns an interest in any such office, industrial
or other commercial real property.

“Prospectus” means the final prospectus,
as amended or supplemented, that is delivered to purchasers of REIT Shares in
the Offering.

“Regulations” means the Federal Income
Tax Regulations, including temporary or proposed regulations, issued under the
Code, as amended and as hereafter amended from time to time.  Reference to any particular provision of the
Regulations shall mean that provision of the Regulations on the date hereof and
any successor provision of the Regulations.

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

“REIT Expenses” means (i) costs and
expenses relating to the formation and continuity of existence and operation of
the Company and any Subsidiaries thereof (which Subsidiaries shall, for
purposes hereof, be included within the definition of “Company”), including
taxes, fees and assessments associated therewith, any and all costs, expenses
or fees payable to any director, officer, or employee of the Company, (ii)
costs and expenses relating to (A) any registration and public offering of
securities by the Company, the net proceeds of which were used to make a
contribution to the Partnership, and (B) all statements and reports incidental
thereto, including, without limitation, underwriting discounts and selling
commissions applicable to any such offering of securities, and any costs and
expenses associated with any claims made by any holders of such securities or
any underwriters or placement agents thereof, (iii) costs and expenses
associated with any repurchase of any securities by the Company, (iv) costs and
expenses associated with the preparation and filing, of any periodic or other
reports and communications by the 

 7
 

 

Company
under federal, state or local laws or regulations, including filings with the
Commission, (v) costs and expenses associated with compliance by the Company
with laws, rules and regulations promulgated by any regulatory body, including
the Commission and any securities exchange, (vi) costs and expenses associated
with any section 401(k) plan, incentive plan, bonus plan or other plan
providing for compensation for the employees of the Company, (vii) costs
and expenses incurred by the Company relating to any issuance or redemption of
Partnership Interests or REIT Shares, and (viii) all other operating or
administrative costs of the Company incurred in the ordinary course of its
business on behalf of or in connection with the Partnership.

“REIT Share” means a share of common
stock in the Company (or Successor Entity, as the case may be).

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

“Sale” means any transaction or series
of transactions whereby (i) the Partnership directly or indirectly (except as
described in other subsections of this definitions) sells, grants, transfers,
conveys or relinquishes its ownership of any Property or portion thereof,
including the lease of any Property consisting of a building only, and
including any event with respect to any Property which gives rise to a
significant amount of insurance proceeds or condemnation awards; (ii) the
Partnership directly or indirectly (except as described in other subsections of
this definition) sells, grants, transfers, conveys or relinquishes its
ownership of all or substantially all the interest of the Partnership in any
Joint Venture in which it is a co-venturer or partner; (iii) any Joint Venture
directly or indirectly (except as described in other subsections of this
definition) in which the Partnership as a co-venturer or partner sells, grants,
transfers, conveys or relinquishes its ownership of any Property or portion
thereof, including any event with respect to any Property which gives rise to
insurance claims or condemnation awards; (iv) the Partnership directly or
indirectly (except as described in other subsections of this definition) sells,
grants, conveys or relinquishes its interest in any Mortgage or portion thereof
(including with respect to any Mortgage, all payments thereunder or in
satisfaction thereof other than regularly scheduled interest payments) of
amounts owed pursuant to such Mortgage and any event with respect to a Mortgage
which gives rise to a significant amount of insurance proceeds or similar
awards, or (v) the Partnership directly or indirectly (except as described in
other subsections of this definition) sells, grants, transfers, conveys or
relinquishes its ownership of any other asset (other than investments in bank
accounts, money market funds or other current assets) not previously described
in this definition or any portion thereof.

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

“Service” means the Internal Revenue
Service.

“Specified Exchange Date” means the
first business day of the month first occurring after the expiration of 60
business days from the date of receipt by the General Partner of the Exchange
Notice.

“Sponsor” means any Person
which (i) is directly or indirectly instrumental in organizing, wholly or in
part, the Company, (ii) will manage or participate in the management of the
Company, and any Affiliate of any such Person, other than a Person whose only
relationship with the Company is that of an independent property manager and
whose only compensation is as such, (iii) takes the initiative, directly or
indirectly, in founding or organizing the Company, either alone or in
conjunction with one or more 

 8
 

 

other
Persons, (iv) receives a material participation in the Company in connection
with the founding or organizing of the business of the Company, in
consideration of services or property, or both services and property, (v) has a
substantial number of relationships and contacts with the Company, (vi)
possesses significant rights to control Properties, (vii) receives fees for
providing services to the Company which are paid on a basis that is not
customary in the industry, or (viii) provides goods or services to the Company
on a basis which was not negotiated at arm’s-length with the Company.

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

“Subsidiary
Partnership” means any partnership, limited liability company or
other entity taxed as a partnership for federal income tax purposes in which
interests are owned by the Company or by a wholly-owned Subsidiary or
Subsidiaries of the Company.

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

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

“Survivor”
has the meaning set forth in Section 7.01(d) hereof.

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

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

“Transfer
Restriction Date” means the effective date upon which Behringer
Harvard Opportunity Advisors I LP, a Texas limited partnership, shall cease
acting as the advisor to the Company under the terms of an advisory agreement
entered into between Behringer Harvard Opportunity Advisors I LP and the Company.

“Unaffiliated Percentage
Interest” means a Percentage Interest held by a Limited Partner that
is not an Affiliate of the Company.

“Unpaid
Return” means any accrued but unpaid LP Return or GP Minimum Return
less all amounts distributed by the Partnership to a Limited Partner or the
General Partner in reduction thereof.

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

 9
 

 

Company acting in good faith
on the basis of such quotations and other information as it considers, in its
reasonable judgment, appropriate.

ARTICLE
II

PARTNERSHIP FORMATION AND IDENTIFICATION

2.01         Formation.  The Partnership
is a limited partnership formed pursuant to the Act and upon the terms and
conditions set forth in the Original Agreement. 
The Partnership shall continue upon the execution of this Agreement.

2.02         Name, Office and Registered Agent.  The
name of the Partnership is “Behringer Harvard Opportunity OP I, LP.”  The
registered office and principal place of business of the Partnership shall be
15601 Dallas Pkwy., Suite 600, Addison, Texas 75001.  The General Partner may at any time change
the location of such office, provided the General Partner gives notice to the
Partners of any such change.  The name
and address of the Partnership’s registered agent is CT Corporation System, 350
North St. Paul Street, Dallas, Texas 75201. 
The sole duty of the registered agent as such is to forward to the
Partnership any notice that is served on it as registered agent.

2.03         Partners.

(a)           The
General Partner of the Partnership is BHO, Inc., a Delaware corporation.  Its principal place of business is the same
as that of the Partnership.

(b)           The
Limited Partners are those Persons identified as Limited Partners (including
the Original Limited Partner) on Exhibit A hereto, as it may be amended
from time to time.

2.04         Term and Dissolution.

(a)           The
term of the Partnership shall continue in full force and effect until
December 31, 2054, except that the Partnership shall be dissolved earlier
upon the first to occur of any of the following events (“Liquidating
Events”):

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

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

(iii)          the exchange of all Limited
Partnership Interests (other than any of such interests held by the General
Partner or Affiliates of the General Partner); or

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

 

 10

 

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

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

2.06         Certificates Describing Partnership Units.  At
the request of a Limited Partner, the General Partner may, at its option and in
its discretion, issue a certificate summarizing the terms of such Limited
Partner’s interest in the Partnership, including the number of Partnership
Units owned as of the date of such certificate. 
If issued, any such certificates (a) shall be in form and substance as
approved by the General Partner, (b) shall not be negotiable, and (c) shall
bear a legend substantially similar to the following:

“This certificate is not negotiable. 
The Partnership Units represented by this certificate are governed by
and transferable only in accordance with the provisions of the Agreement of
Limited Partnership of Behringer Harvard Opportunity
OP
I, LP, as amended from time to time.”

ARTICLE
III

BUSINESS OF THE PARTNERSHIP

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

ARTICLE
IV

CAPITAL CONTRIBUTIONS AND ACCOUNTS

4.01         Capital
Contributions.  As of January 1, 2007, the parties
hereto, or their respective predecessors in interest as the case may be, have
made Capital Contributions to the Partnership in exchange for the number of
Partnership Units (estimated as of January 1, 2007 with respect to the
Original Limited Partner 

 11
 

 

only) set
forth opposite their names on Exhibit A. 
After the Company has filed its Annual Report on Form 10-K for the
fiscal year ended December 31, 2006 with the Commission, the General Partner
shall, without the approval of any other Partner, attach an amended Exhibit
A to this Agreement to reflect the actual number of Partnership Units held
by the Original Limited Partner as of January 1, 2007.  At such time as Additional Limited Partners
are admitted to the Partnership, each shall make Capital Contributions as set
forth opposite their names on Exhibit A, as it may be amended from time
to time.  Exhibit A shall be
deemed amended upon, and the General Partner may, without the approval of any
other Partner, attach an amended Exhibit A to this Agreement to reflect:
(a) the issuance of Partnership Units issued to Additional Limited Partners or
to any existing Limited Partner pursuant to Section 4.02 (including the
Original Limited Partner), (b) any Partnership Units purchased or redeemed
pursuant to Section 6.10, (c) any redemption or purchase of Partnership Units
by the Partnership or the Company by reason of the exercise by a Limited
Partner of the Exchange Right, (d) any purchase by the Company (or any of its
Affiliates) of Partnership Units pursuant to the Call Right and (e) any changes
required pursuant to the second sentence of this Section 4.01.

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

(a)           Issuances
of Additional Partnership Interests.

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

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

(2)           the
additional Partnership Interests are issued in exchange for property or other
assets owned by the General Partner or Original Limited Partner with a fair
market value, 

 12
 

 

as determined by the General Partner, in good faith,
equal to the value of the Partnership Interests; or

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

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

(ii)           Issuance of Additional Securities.  The Company shall not issue any additional
REIT Shares (other than REIT Shares issued in connection with an exchange made
pursuant to Section 8.05 hereof) or rights, options, warrants or convertible or
exchangeable securities containing the right to subscribe for or purchase REIT
Shares (collectively, “Additional Securities”) other than to all holders of
REIT Shares or pursuant to an Offering, unless (A) the General Partner shall
cause the Partnership to issue to the General Partner (or to the General
Partner and/or the Original Limited Partner), as the General Partner may
designate, Partnership Interests or rights, options, warrants or convertible or
exchangeable securities of the Partnership having designations, preferences and
other rights such that the economic interests are substantially similar to
those of the Additional Securities, and (B) the Company through the General
Partner (or the General Partner and/or the Original Limited Partner)
contributes the proceeds from the issuance of such Additional Securities and
from any exercise of rights contained in such Additional Securities to the
Partnership; provided, however, that the Company is allowed to issue Additional
Securities in connection with an acquisition of a Property or other asset to be
held directly by the General Partner, but if and only if, such direct
acquisition and issuance of Additional Securities have been approved and
determined to be in the best interests of the Company and the Partnership by a
majority of the Independent Directors and Limited Partners holding more than
50% of the Unaffiliated Percentage Interests, if any.  Without limiting the foregoing, the General
Partner is expressly authorized to issue Additional Securities for less than
fair market value, and to cause the Partnership to issue to the General Partner
(or to the General Partner and/or the Original Limited Partner) corresponding
Partnership Interests, so long as (1) the Company concludes in good faith that
such issuance is in the best interests of the Company and the Partnership,
including without limitation, the issuance of REIT Shares and corresponding
Partnership Units pursuant to an employee share purchase plan providing for
employee purchases of REIT Shares at a discount from fair market value or
employee stock options that have an exercise price that is less than the fair
market value of the REIT Shares, either at the time of issuance or at the time
of exercise, and (2) the Company through the General Partner (or the General
Partner and/or the Original Limited Partner) contributes all proceeds from such
issuance to the Partnership.

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

 13
 

 

(c)           Original
Limited Partner Deemed Contributions. 
In the event the Original Limited Partner elects to defer any
distribution of cash hereunder to be made to it pursuant to Section 5.02(a)
hereof, then such amount shall be deemed to be an additional contribution of
capital to the Partnership by the Original Limited Partner, which shall be
added to the Original Limited Partner’s Capital Contribution to the Partnership
and the Original Limited Partner’s Capital Account as established and
maintained under Section 4.04 hereof.

4.03         Additional Funding.  If the
General Partner determines that it is in the best interests of the Partnership
to provide for additional Partnership funds (“Additional
Funds”) for any Partnership purpose, the General Partner may (a)
cause the Partnership to obtain such funds from outside borrowings, or (b)
elect to have the General Partner or any of its Affiliates provide such
Additional Funds to the Partnership through loans or otherwise.

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

4.05         Percentage Interests.  If the
number of outstanding Partnership Units increases or decreases during a taxable
year, each Partner’s Percentage Interest shall be adjusted by the General
Partner effective as of the date of each such increase or decrease to a
percentage equal to the number of Partnership Units held by such Partner
divided by the aggregate number of Partnership Units outstanding after giving
effect to such increase or decrease.  In
such event, the General Partner shall revalue the property of the Partnership and
the Capital Account for each Partner shall be adjusted as set forth in Section
4.04 hereof.  If the Partners’ Percentage
Interests are adjusted pursuant to this Section 4.05, the Profit and Loss for
the taxable year in which the adjustment occurs shall be prorated between the
part of the year ending on the day when the Partnership’s property is revalued
by the General Partner and the part of the year beginning on the following day
and, as so divided, shall be allocated to the Partners based on their
Percentage Interests before adjustment, and their adjusted Percentage
Interests, respectively, either (a) as if the taxable year had ended on the
date of the adjustment or (b) based on the number of days in each part.  The General Partner, in its sole and absolute
discretion, shall determine which method shall be used to allocate Profit and
Loss for the taxable year in which an adjustment occurs, as may be required or
permitted under Section 706 of the Code.

4.06         No Interest on Contributions.  No
Partner shall be entitled to interest on its Capital Contribution, except as
specifically provided in this Agreement.

4.07         Return of Capital Contributions.  No
Partner shall be entitled to withdraw any part of its Capital Contribution or
its Capital Account or to receive any distribution from the Partnership, except
as specifically provided in this Agreement. 
Except as otherwise provided herein, there shall be no obligation 

 14
 

 

to return to any Partner or withdrawn Partner any part of such Partner’s
Capital Contribution for so long as the Partnership continues in existence.

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

ARTICLE V

PROFIT AND LOSS; DISTRIBUTIONS

5.01         Allocation of Profit and Loss.

(a)           After
giving effect to the special allocations set forth in Sections 5.01(b), (c) and
(d), Profit for each fiscal year of the Partnership shall be allocated as
follows: (i) first to the Partners, pro rata, in accordance with and in
proportion to their respective Partnership Interests, in amounts equal to the
amount of cash distributed to the Partners pursuant to Section 5.02(a) hereof with
respect to such fiscal year; (ii) second, to the extent the amount of Profit
for such fiscal year exceeds the amount of cash distributed to the Partners
pursuant to Section 5.02(a) hereof, such excess shall be allocated to the
General Partner and the Limited Partners in amounts and in proportion to the
cumulative Loss allocated to the General Partner pursuant to clause (y) of this
Section 5.01(a) and the cumulative Loss allocated to the Limited Partners
pursuant to clause (x) of this Section 5.01(a), respectively; and (iii)
finally, the balance, if any, of Profit shall be allocated to the Partners in
accordance with and in proportion to their respective Percentage
Interests.  Notwithstanding the
foregoing, however, it is the intent of the Partners that allocations of Profit
to the Limited Partners be such that the amount of Profit allocated to each
Limited Partner be equal to the amount of income that would have been allocated
to such Limited Partner with respect to the applicable fiscal period if such Limited
Partner had owned REIT Shares equal in number to the number of Partnership
Units owned by such Limited Partner during such fiscal period, and if, for any
reason, the foregoing allocations of Profit result in any material variation
from this concept, Profit shall be allocated to each Limited Partner in an
amount equal to the aggregate amount of income that would have been allocated
to such Limited Partner with respect to the applicable fiscal period if such
Limited Partner had owned REIT Shares equal in number to the number of
Partnership Units owned by such Limited Partner during such fiscal period.  After giving effect to the special
allocations set forth in Sections 5.01(b), (c) and (d), Loss for a fiscal year
of the Partnership shall be allocated as follows: (w) first, to the Partners,
pro rata, in accordance with and in proportion to their respective Partnership
Interests, until the cumulative Loss allocated to each Partner under this
clause (w) equals the cumulative Profit allocated to each Partner under clause
(ii) of this Section 5.01(a); (x) second, to the Limited Partners in an amount
equal to each such Limited Partner’s Capital Account balance prior to the
allocation made under this clause (x); (y) third, to the General Partner in an
amount equal to the General Partner’s Capital Account balance prior to the
allocation made under this clause (y); and (z) fourth, to the General Partner
to the extent that any further allocation of Loss to Limited Partners would
result in any such Limited Partners having a deficit balance in their Capital
Accounts.

 15
 

 

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

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

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

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

(f)            “Profit” and “Loss” and any
items of income, gain, expense, or loss referred to in this Agreement shall be
determined in accordance with federal income tax accounting principles, as
modified by Regulations Section 1.704-(b)(2)(iv), except that Profit and Loss
shall not include items of income, gain and expense that are specially
allocated pursuant to Sections 5.01(b), 5.01(c), or 5.01(d).  All allocations of income, Profit, gain,
Loss, and expense (and all items contained therein) for federal income 

 16
 

 

tax purposes shall be
identical to all allocations of such items set forth in this Section 5.01,
except as otherwise required by Section 704(c) of the Code and Regulations
Section 1.704-1(b)(4).  The General
Partner shall have the authority, in its sole and absolute discretion and
without the need for consent from any Partner, to elect the method or methods
to be used by the Partnership for allocating items of income, gain, expense and
deductions as required by Section 704(c) of the Code, including election of a
method that may result in one or more Partners receiving or being allocated a
disproportionately larger share of items of Partnership income, gain, expense
or deduction, and any such election shall be binding on all Partners.

(g)           If
the General Partner determines that is advantageous to the business of the
Partnership to amend the allocation provisions of this Agreement so as to
permit the Partnership to avoid the characterization of Partnership income
allocable to various qualified plans, IRAs and other entities which are exempt
from federal income taxation (“Tax Exempt
Partners”) as constituting Unrelated Business Taxable Income (“UBTI”) within the meaning of the Code,
specifically including, but not limited to, amendments to satisfy the so-called
“fractions rule” contained in Code Section 514(c)(9), the General Partner
is authorized, in its discretion, to amend this Agreement so as to allocate
income, gain, loss, deduction or credit (or items thereof) arising in any year
differently than as provided for in this Section if, and to the extent, that
such amendments will achieve such result or otherwise permit the avoidance of
characterization of Partnership income as UBTI to Tax Exempt Partners.  Any allocation made pursuant to this
Section 5.01(g) shall be deemed to be a complete substitute for any
allocation otherwise provided for in this Agreement, and no further amendment
of this Agreement or approval by any Limited Partner shall be required to
effectuate such allocation.  In making
any such allocations under this Section 5.01(g) (“New Allocations”), the General Partner is
authorized to act in reliance upon advice of counsel to the Partnership or the
Partnership’s regular certified public accountants that, in their opinion,
after examining the relevant provisions of the Code and any current or future
proposed or final Treasury Regulations thereunder, the New Allocation will
achieve the intended result of this Section 5.01(g).

New Allocations made by the General Partner in
reliance upon the advice of counsel or accountants as described above shall be
deemed to be made in the best interests of the Partnership and all of the
Partners, and any such New Allocations shall not give rise to any claim or
cause of action by any Partner against the Partnership or any General
Partner.  Nothing herein shall require or
obligate the General Partner, by implication or otherwise, to make any such
amendments or undertake any such action.

5.02         Distributions of Cash.

(a)           The
Partnership shall distribute cash on a quarterly (or, at the election of the
General Partner, more frequent) basis, in an amount determined by the General
Partner in its sole and absolute discretion, to the Partners who are Partners
on the Partnership Record Date with respect to such quarter (or other
distribution period) in the following manner: (i) first, to the General Partner
in an amount equal to the GP Minimum Return with respect to the fiscal year of
the General Partner; (ii) second, to the Limited Partners pro rata among them
in proportion to the their respective Unpaid Return, if any, owing to each such
Limited Partners with respect to prior fiscal years, in an amount equal to
their respective Unpaid Return for such prior fiscal years owing to each such
Limited Partner; (iii) third, after the establishment of reasonable cash
reserves to meet REIT Expenses and other obligations of the Partnership, as
determined in the sole and absolute discretion of the General Partner, to the
General Partner and the Limited Partners in such aggregate amount as may be
determined by the General Partner in its sole and absolute discretion to be
allocated among the General Partner and the Limited Partners such that each
Limited Partner will receive an amount equal to its LP Return for such fiscal
year; and (iv) finally, to the Partners in accordance with and in
proportion to their respective Percentage Interests; provided, however, that if
a new or existing Partner acquires an additional Partnership Interest in exchange
for a Capital Contribution on any date other than a Partnership Record Date,
the cash distribution attributable to such additional Partnership Interest
relating to the Partnership Record Date 

 17
 

 

next following the
issuance of such additional Partnership Interest shall be reduced to the
proportion thereof which equals (i) the number of days that such additional
Partnership Interest is held by such Partner divided by (ii) the number of days
between such Partnership Record Date and the immediately preceding Partnership
Record Date.  Notwithstanding the
foregoing, however, the Original Limited Partner may, in its sole and absolute
discretion, elect to defer any distribution to be made to it, in which case the
amount so deferred shall be deemed to be an additional Capital Contribution
made on behalf of the Original Limited Partner under Section 4.02(c) hereof, to
be distributed to the Original Limited Partner upon liquidation of the
Partnership under Section 5.06 hereof, or at such time as the Original Limited
Partner may otherwise be allowed to withdraw from the Partnership after the
Transfer Restriction Date.

(b)           Notwithstanding
any other provision of this Agreement, the General Partner is authorized to
take any action that it determines to be necessary or appropriate to cause the
Partnership to comply with any withholding requirements established under the
Code or any other federal, state or local law including, without limitation,
the requirements of Sections 1441, 1442, 1445 and 1446 of the Code.  To the extent that the Partnership is
required to withhold and pay over to any taxing authority any amount resulting
from the allocation or distribution of income to a Partner or its assignee
(including by reason of Section 1446 of the Code), either (i) if the actual amount
to be distributed to the Partner or assignee equals or exceeds the amount
required to be withheld by the Partnership, the amount withheld shall be
treated as a distribution of cash in the amount of such withholding to such
Partner or assignee, or (ii) if the actual amount to be distributed to the
Partner or assignee is less than the amount required to be withheld by the
Partnership, the amount required to be withheld shall be treated as a loan (a “Partnership Loan”) from the Partnership to the Partner or
assignee on the day the Partnership pays over such amount to a taxing
authority.  A Partnership Loan shall be
repaid through withholding by the Partnership with respect to subsequent
distributions to the applicable Partner or assignee.  In the event that a Limited Partner (a “Defaulting Limited Partner”) fails to pay any amount owed to
the Partnership with respect to the Partnership Loan within 15 days after
demand for payment thereof is made by the Partnership on the Limited Partner,
the General Partner, in its sole and absolute discretion, may elect to make the
payment to the Partnership on behalf of such Defaulting Limited Partner.  In such event, on the date of payment, the
General Partner shall be deemed to have extended a loan (a “General Partner Loan”) to the Defaulting Limited Partner in
the amount of the payment made by the General Partner and shall succeed to all
rights and remedies of the Partnership against the Defaulting Limited Partner
as to that amount.  Without limitation,
the General Partner shall have the right to receive any distributions that
otherwise would be made by the Partnership to the Defaulting Limited Partner
until such time as the General Partner Loan has been paid in full, and any such
distributions so received by the General Partner shall be treated as having
been received by the Defaulting Limited Partner and immediately paid to the
General Partner.  Any amounts treated as
a Partnership Loan or a General Partner Loan pursuant to this Section 5.02(b)
shall bear interest at the lesser of (A) the base rate on corporate loans at
large United States money center commercial banks, as published from time to
time in The Wall Street Journal, or (B) the maximum lawful rate of
interest on such obligation, such interest to accrue from the date the
Partnership or the General Partner, as applicable, is deemed to extend the loan
until such loan is repaid in full.

(c)           To
the extent not utilized for expenses of the Partnership or for investment in
additional Properties, the General Partner may, in its discretion, cause the
Partnership to distribute Net Capital Proceeds in such amount as shall be
determined by the General Partner in its discretion in accordance with the
provisions of Section 5.02(a) hereof.

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

 

 18

 

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

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

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

5.06         Distributions Upon Liquidation.  Upon
liquidation of the Partnership, after payment of, or adequate provision for,
debts and obligations of the Partnership, including any Partner loans, any
remaining assets of the Partnership shall be distributed to all Partners with
positive Capital Accounts in accordance with their respective positive Capital
Account balances.  For purposes of the
preceding sentence, the Capital Account of each Partner shall be determined
after all adjustments made in accordance with Sections 5.01 and 5.02 resulting
from Partnership operations and from all sales and dispositions of all or any
part of the Partnership’s assets have been made.  To the extent deemed advisable by the General
Partner, appropriate arrangements (including the use of a liquidating trust)
may be made to assure that adequate funds are available to pay any contingent
debts or obligations.

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

5.08         Withholding.  All amounts
required to be withheld pursuant to Section 1446 of the Code or any other
provision of federal, state, or local tax law shall be treated as amounts
actually distributed to the affected Partners for all purposes under this
Agreement.  If the Partnership’s
withholding obligations with respect to a Partner shall exceed the cash
distributable to such Partner, such Partner shall be liable for a mandatory
capital contribution equal to such excess. 
Failure to make such capital contribution shall result in the deemed
sale by such Partner of a portion of such Partner’s Partnership Interest; such
portion having an agreed value equal to such excess.

5.09         Tax Consequences to Limited Partners.  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 by it. The General
Partner and the Partnership shall not have liability to a Partner under any
circumstances as a result of an income tax liability incurred by such Limited
Partner as a result of an action (or inaction) by the General Partner pursuant
to its authority under this Agreement.

 19
 

 

ARTICLE
VI

RIGHTS, OBLIGATIONS AND

POWERS
OF THE GENERAL PARTNER

6.01         Management of the Partnership.

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

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

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

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

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

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

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

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

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

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

 20
 

 

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

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

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

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

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

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

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

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

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

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

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

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

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

(xxiii)       to take such other action, execute,
acknowledge, swear to or deliver such other documents and instruments, and
perform any and all other acts that the General Partner deems necessary or
appropriate for the formation, continuation and conduct of the business and
affairs of the Partnership (including, without limitation, all actions
consistent with allowing the Company at 

 21
 

 

all times to qualify as a REIT unless the Company voluntarily
terminates its REIT status) and to possess and enjoy all of the rights and
powers of a general partner as provided by the Act.

(b)           Except
as otherwise provided herein, to the extent the duties of the General Partner
require expenditures of funds to be paid to third parties, the General Partner
shall not have any obligations hereunder except to apply Partnership funds 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.

(c)           Any
actions taken by the General Partner pursuant to its authority under this
Agreement on behalf of the Partnership regarding the approval of any
transaction between the Partnership and the Sponsor, Advisor, a member of the
Board of Directors of the Company or any Affiliate thereof, shall require
approval by a majority of the members of the Board of Directors of the Company
(including a majority of the independent directors) not otherwise interested in
such transaction as being fair and reasonable to the Company and the
Partnership on terms and conditions not less favorable to the Company or the
Partnership, as applicable, than those available from unaffiliated third
parties.

6.02         Delegation of Authority.

The General Partner may delegate any or all of its
powers, rights and obligations hereunder, and may appoint, employ, contract or
otherwise deal with any Person (including without limitation officers or other
agents of the Partnership, the Company or the General Partner appointed by the
General Partner) for the transaction of the business of the Partnership, which
Person may, under supervision of the General Partner, perform any acts or
services for the Partnership as the General Partner may approve.

6.03         Indemnification and Exculpation of Indemnitees.

(a)           The
Partnership shall indemnify an Indemnitee from and against any and all losses,
claims, damages, liabilities, joint or several, expenses (including reasonable
legal fees and expenses), judgments, fines, settlements, and other amounts
arising from any and all claims, demands, actions, suits or proceedings, civil,
criminal, administrative or investigative, that relate to the operations of the
Partnership as set forth in this Agreement in which any Indemnitee may be
involved, or is threatened to be involved, as a party or otherwise, as a result
of acting on behalf of or performing services for the Partnership, only if it
is determined that (i) the Indemnitee acted in good faith and (ii) that the Indemnitee
reasonably believed that the act or omission was in the Partnership’s best
interests, or if the act or omission was outside the Indemnitee’s official
capacity as a general partner of the Partnership, that the act or omission was
at least not opposed to the Partnership’s best interests.  Notwithstanding the foregoing, each
Indemnitee shall be liable, responsible and accountable, and the Partnership
shall not be liable to an Indemnitee, other than for reasonable expenses
actually incurred by the Indemnitee with respect to a proceeding in which (i)
the Indemnitee is found liable on the basis that the Indemnitee improperly
received personal benefit, whether or not the benefit resulted from an action
taken in the Indemnitee’s official capacity, or (ii) the Indemnitee is found
liable to the Partnership or the Limited Partners.  The Partnership shall not indemnify or hold
harmless the Indemnitee:  (a) in the case
in which the Indemnitee is an Independent 
Director, if the loss or liability was the result of gross negligence or
willful misconduct by the Indemnitee, or (b) in any other case, if the loss or
liability was the result of negligence or misconduct by the Indemnitee.  The termination of any proceeding by judgment,
order or settlement does not create a presumption that the Indemnitee did not
meet the requisite standard of conduct set forth in this Section 6.03(a).  The termination of any proceeding by
conviction or upon a plea of nolo contendere or its equivalent, or an entry of
an order of probation prior to judgment, does not alone determine that the
Indemnitee acted in a manner contrary to that specified in this Section
6.03(a).  Any indemnification pursuant to
this Section 6.03 shall be made only out of the assets of the Partnership.

 22
 

 

(b)           Notwithstanding
anything to the contrary contained in the provisions of subsection (a) of this
Section, the Partnership shall not provide indemnification for any loss,
liability or expense arising from or out of an alleged violation of federal or
state securities laws by an Indemnitee 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 SEC and of the published position of
any state securities regulatory authority in which securities of the Partnership
were offered or sold as to indemnification for violations of securities laws.

(c)           The
Partnership shall pay or reimburse reasonable legal expenses and other costs
incurred by an Indemnitee in advance of final disposition of a proceeding if
all of the following are satisfied: 
(i) the proceeding relates to acts or omissions with respect to the
performance of duties for services on behalf of the Partnership, (ii) the
Indemnitee provides the Partnership with written affirmation of the Indemnitee’s
good faith belief that the Indemnitee has met the standard of conduct necessary
for indemnification by the Partnership as authorized in this Section 6.03,
(iii) the legal proceeding was initiated by a third party who is not a
stockholder of the Company or, if by a stockholder of the Company acting in his
or her capacity as such, a court of competent jurisdiction approves such
advancement, and (iv) the Indemnitee provides the Partnership with a written
agreement to repay the amount paid or reimbursed by the Partnership, together
with the applicable legal rate of interest thereon, if it is ultimately
determined that the Indemnitee did not comply with the requisite standard of
conduct and is not entitled to indemnification.

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

(e)           The
Partnership may purchase and maintain insurance or establish other
arrangements, including without limitation trust arrangements and letters of
credit on behalf of or to secure indemnification obligations owed to 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.

(f)            For
purposes of this Section 6.03, (i) the Partnership shall be deemed to have
requested an Indemnitee to serve as a fiduciary of an employee benefit plan
whenever the performance by the Indemnitee of its duties to the Partnership
also imposes duties on the Indemnitee, or otherwise involves services by the
Indemnitee to the plan or participants or beneficiaries of the plan; (ii)
excise taxes assessed on an Indemnitee with respect to an employee benefit plan
pursuant to applicable law shall constitute fines within the meaning of this
Section 6.03; and (iii) 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.

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

(h)           An
Indemnitee shall not be denied indemnification in whole or in part under this
Section 6.03 because the Indemnitee had an interest in the transaction
with respect to which the indemnification applies if the transaction was
otherwise permitted by the terms of this Agreement.

 23
 

 

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

6.04         Liability of the General Partner.

(a)           Notwithstanding
anything to the contrary set forth in this Agreement, the General Partner shall
not be liable for monetary damages to the Partnership or any Partners for
losses sustained or liabilities incurred as a result of errors in judgment or
any act or omission if the General Partner acted in good faith.  The General Partner shall not be in breach of
any duty that the General Partner may owe to the Limited Partners or the
Partnership or any other Persons under this Agreement or of any duty stated or
implied by law or equity, provided, the General Partner, acting in good faith,
abides by the terms of this Agreement. 
In addition, to the extent the General Partner or any officer, director,
employee, agent or stockholder of the General Partner performs its duties in
accordance with the standards provided by the Act, as it may be amended from
time to time, or under any successor statute thereto, such Person or Persons
shall have no liability by reason of being or having been the General Partner,
or by reason of being an officer, director, employee, agent or stockholder of
the General Partner.  To the maximum
extent that the Act and the general laws of the State of Texas, in effect from
time to time, permit limitation of the liability of general partners of a
limited partnership, the General Partner and its officers, directors, employees,
agents and stockholders shall not be liable to the Partnership or to any
Partner for money damages except to the extent that (i) the General Partner or
its officers, directors, employees, agents or stockholders actually received an
improper benefit or profit in money, property or services, in which case the
liability shall not exceed the amount of the benefit or profit in money,
property or services actually received; or (ii) a judgment or other final
adjudication adverse to the General Partner or one or more of its officers,
directors, employees, agents or stockholders is entered in a proceeding based
on a finding in the proceeding that the action or failure to act of the General
Partner or one or more of its officers, directors, employees, agents or stockholders
was the result of active and deliberate dishonesty and was material to the
cause of action adjudicated in the proceeding. 
Neither the amendment nor repeal of this Section 6.04(a), nor the
adoption or amendment of any other provision of this Agreement inconsistent
with this Section 6.04(a), shall apply to or affect in any respect the
applicability of the preceding sentence with respect to any act or failure to
act which occurred prior to such amendment, repeal or adoption.  In the absence of any Texas statute limiting
the liability of the General Partner or its directors or officers for money
damages in a suit by or on behalf of the Partnership or by any Partner, the
General Partner and the officers, directors, employees, agents and stockholders
of the General Partner shall not be liable to the Partnership or to any Partner
for money damages except to the extent that (i) the General Partner or one or
more of its officers, directors, employees, agents or stockholders actually
received an improper benefit or profit in money, property or services, in which
case the liability shall not exceed the amount of the benefit or profit in
money, property or services actually received; or (ii) a judgment or other
final adjudication adverse to the General Partner or one or more of its
officers, directors, employees, agents or stockholders is entered in a
proceeding based on a finding in the proceeding that the action of the General
Partner or one or more of its officers, directors, employees or stockholders
action or failure to act was the result of active and deliberate dishonesty and
was material to the cause of action adjudicated in the proceeding.

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

 24
 

 

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

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

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

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

6.05         Reimbursement of or by General Partner.

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

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

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

6.06         Outside Activities.  Subject
to the Articles of Incorporation and any agreements entered into by the General
Partner or its Affiliates with the Partnership or a Subsidiary, or any officer,
director, manager, employee, agent, trustee, Affiliate or owner of the General
Partner, the Affiliates of the General Partner and the officers, directors,
managers, agents, trustees and owners of the General Partner and its Affiliates
shall be entitled to and may have business interests and engage in business
activities in addition to those relating to the Partnership, including business
interests and activities substantially similar or identical to those of the
Partnership.  Neither the Partnership nor
any of the Limited Partners shall have any rights by virtue of this Agreement
in any such business ventures, interests or activities.  None of the Limited Partners or any other
Person shall have any rights by virtue of this Agreement or the partnership
relationship established hereby in any such business ventures, interests or
activities, and neither the General Partner, nor any Affiliates of the General
Partner nor any officers, directors, managers, employees, agents, trustees or
owners of the General Partner or the General Partner’s Affiliates shall have 

 25
 

 

any obligation pursuant to this Agreement to offer any interest in any
such business ventures, interests and activities to the Partnership or any
Limited Partner, even if such opportunity is of a character which, if presented
to the Partnership or any Limited Partner, could be taken by such Person.  Without the consent of the Limited Partners
holding more than 50% of the Percentage Interests, 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, the facilitation of the Company’s operation as a REIT and such
activities as are incidental to the same. 
Without the consent of the Limited Partners holding more than 50% of the
Unaffiliated Percentage Interests (if any), neither the General Partner nor the
Company shall, directly or indirectly, participate in or otherwise acquire any
interest in any real or personal property, except its general partner interest
or its minority interest in any Subsidiary of the Partnership (held directly or
indirectly through a qualified REIT subsidiary (as defined in Code
Section 856(i)(2), limited liability company or taxable corporate
affiliate, as the Company shall determine consistent with its need to maintain
its status as a REIT) that the General Partner holds in order to maintain such
Subsidiary’s status as a partnership for federal income tax purpose or to
satisfy any covenants or terms of any documents evidencing a loan that is
either made to such Subsidiary or that relates to any property owned directly
or indirectly by such Subsidiary, 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 Certificate.

6.07         Employment or Retention of Affiliates.

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

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

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

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

6.08         Reserved.

6.09         Title to Partnership Assets.  Partnership
assets, whether real, personal or mixed and whether tangible or intangible,
shall be deemed to be owned by the Partnership as an entity, and no Partner,
individually or collectively, shall have any ownership interest in such
Partnership assets or any portion thereof; provided, that 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 such Person for
the use and benefit of the Partnership in 

 26
 

 

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

6.10         Miscellaneous.  In the event
the Company redeems any REIT Shares, then the Partnership will be deemed to
have purchased from the Original Limited Partner a number of Partnership Units
determined by, and based upon, the application of the Conversion Factor on the
same terms upon which the Company redeemed such REIT Shares.  Moreover, if the Company makes a cash tender
offer or other offer to acquire REIT Shares, then the Company shall be deemed
to have made a corresponding offer to the Original Limited Partner to acquire
an equivalent number of Partnership Units held by the Original Limited Partner
based on the application of the Conversion Factor.  In the event any REIT Shares are redeemed by
the Company pursuant to such cash tender offer, then the Partnership shall be
deemed to have redeemed an equivalent number of the Original Limited Partner’s
Partnership Units for an equivalent purchase price based on the application of
the Conversion Factor.  If the Original
Limited Partner holds an insufficient number of Partnership Units to effect a
purchase or redemption contemplated by this Section 6.10, then the Partnership
will be deemed to have purchased or redeemed from the General Partner, after it
has purchased or redeemed all of the Original Limited Partner’s Partnership
Units, the number of Partnership Units necessary to effect such purchase or
redemption.

ARTICLE
VII

CHANGES IN GENERAL PARTNER

7.01         Transfer of the General Partner’s Partnership
Interest.

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

(b)           The
Company shall not transfer all or any portion of its interest in the General
Partner except as provided in or in connection with a transaction contemplated
by Sections 7.01(c), 7.01(d) or 7.01(e).

(c)           Except
as otherwise provided in Sections 7.01(d) or (e) hereof, neither the Company
nor the General Partner shall engage in any merger, consolidation or other
combination with or into another Person or sale of all or substantially all of
its assets (other than in connection with a change in the Company’s or General
Partner’s state of incorporation or organizational form), which, in any such
case, results in a change of control of the Company or the General Partner (a “Transaction”), unless:

(i)            the consent of Limited Partners
holding more than 50% of the Percentage Interests of the Limited Partners is
obtained; or

(ii)           as a result of such Transaction all
Limited Partners are granted the right to receive for each Partnership Unit an
amount of cash, securities, or other property equal to the product of the
Conversion Factor and the greatest amount of cash, securities or other property
paid in the Transaction to a holder of one REIT Share in consideration of the
transfer of one REIT Share; provided, that if, in connection with the
Transaction, a purchase, tender or exchange offer (“Offer”)
shall have been made to and accepted by the holders of more than 50% of the
outstanding REIT Shares, each holder of Partnership Units shall be given the
option to exchange its Partnership Units for the greatest amount of cash,
securities, or other property which a Limited Partner would have received had
it (A) exercised its Exchange Right and (B) sold, tendered or exchanged
pursuant to the Offer the REIT Shares received upon exercise of the Exchange
Right immediately prior to the expiration of the Offer; or

 27
 

 

(iii)          the Company or the General Partner is
the surviving entity in the Transaction and either (A) the holders of REIT
Shares in the case of a Transaction involving the Company, or the Company in
the case of a Transaction involving the General Partner, do not receive cash,
securities, or other property in the Transaction or (B) all Limited
Partners (other than the General Partner or any Subsidiary) receive an amount of
cash, securities, or other property (expressed as an amount per REIT Share)
that is no less than the product of the Conversion Factor and the greatest
amount of cash, securities, or other property (expressed as an amount per REIT
Share) received in the Transaction by any holder of REIT Shares in the case of
a Transaction involving the Company, or the Company in the case of a
Transaction involving the General Partner.

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

In respect of any transaction described in the
preceding paragraph, the General Partner is required to use its commercially
reasonable efforts to structure such transaction to avoid causing the Limited
Partners to recognize a gain for federal income tax purposes by virtue of the
occurrence of or their participation in such transaction, provided, such
efforts are consistent with the exercise of the Board of Directors’ fiduciary
duties to the stockholders of the General Partner under applicable law.

(e)           Notwithstanding
Section 7.01(c),

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

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

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

 28
 

 

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

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

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

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

(a)           Upon
the occurrence of an Event of Bankruptcy as to a General Partner (and its
removal pursuant to Section 7.04(a) hereof) or the death, withdrawal, removal
or dissolution of a General Partner (except that, if a General Partner is, on
the date of such occurrence a partnership, the withdrawal, death, dissolution,
Event of Bankruptcy as to, or removal of a partner in, such partnership shall
be deemed not to be a dissolution of such General Partner if the business of
such General Partner is continued by the remaining partner or partners
thereof), the Partnership shall be dissolved and terminated unless the
Partnership is continued pursuant to Section 7.03(b) hereof.  The merger of the General Partner with or
into any entity that is admitted as a substitute or successor General Partner
pursuant to Section 7.02 hereof shall not be deemed to be the withdrawal,
dissolution or removal of the General Partner.

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

7.04         Removal of a General Partner.

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

 

 29

 

(b)           If a General Partner
has been removed pursuant to this Section 7.04 and the Partnership is continued
pursuant to Section 7.03 hereof, such General Partner shall promptly transfer
and assign its General Partnership Interest in the Partnership to the substitute
General Partner approved by a majority in interest of the Limited Partners in
accordance with Section 7.03(b) hereof and otherwise admitted to the
Partnership in accordance with Section 7.02 hereof.  At the time of assignment, the removed
General Partner shall be entitled to receive from the substitute General
Partner the fair market value of the General Partnership Interest of such
removed General Partner as reduced by any damages caused to the Partnership by
such General Partner’s removal.  Such fair
market value shall be determined by an appraiser mutually agreed upon by the
General Partner and Limited Partners holding more than 50% of the Percentage
Interests of the Limited Partners within 10 days following the removal of the
General Partner.  In the event that the
parties are unable to agree upon an appraiser, the removed General Partner and
Limited Partners holding more than 50% of the Percentage Interests of the
Limited Partners shall each select an appraiser.  Each such appraiser shall complete an
appraisal of the fair market value of the removed General Partner’s General
Partnership Interest within 30 days of the General Partner’s removal, and the
fair market value of the removed General Partner’s General Partnership Interest
shall be the average of the two appraisals; provided, however, that if the
higher appraisal exceeds the lower appraisal by more than 20% of the amount of
the lower appraisal, the two appraisers, no later than 40 days after the
removal of the General Partner, shall select a third appraiser who shall
complete an appraisal of the fair market value of the removed General Partner’s
General Partnership Interest no later than 60 days after the removal of the
General Partner.  In such case, the fair
market value of the removed General Partner’s General Partnership Interest
shall be the average of the two appraisals closest in value.

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

(d)           All
Partners shall have given and hereby do give such consents, shall take such
actions and shall execute such documents as shall be legally necessary and
sufficient to effect all the foregoing provisions of this Section 7.04.

ARTICLE
VIII

RIGHTS AND OBLIGATIONS OF THE LIMITED PARTNERS

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

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

 30
 

 

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

8.04         Ownership
by Limited Partner of Corporate General Partner or Affiliate.  No
Limited Partner shall at any time, either directly or indirectly, own any stock
or other interest in the General Partner or in any Affiliate thereof, if such
ownership by itself or in conjunction with other stock or other interests owned
by other Limited Partners would, in the opinion of counsel for the Partnership,
jeopardize the classification of the Partnership as a partnership for federal
income tax purposes.  The General Partner
shall be entitled to make such reasonable inquiry of the Limited Partners as is
required to establish compliance by the Limited Partners with the provisions of
this Section 8.04.

8.05         Exchange Right.

(a)           Subject
to Sections 8.05(b), 8.05(c), 8.05(d) and 8.05(e) hereof, and subject to the
potential modification of any rights or obligations provided for herein by
agreement(s) between the Partnership and any one or more Limited Partners with
respect to Partnership Units held by them, each Limited Partner shall have the
right (the “Exchange Right”) to require the
Partnership to redeem on a Specified Exchange Date all or a portion of the
Partnership Units held by such Limited Partner at an exchange price equal to
and in the form of the Cash Amount to be paid by the Partnership; provided,
that such Partnership Units shall have been outstanding for at least one
year.  The Exchange Right shall be
exercised pursuant to the delivery of an Exchange Notice to the Partnership
(with a copy to the Company) by the Limited Partner who is exercising the
Exchange Right (the “Exchanging Partner”);
provided, however, that the Partnership shall not be obligated to satisfy such
Exchange Right if the Company elects to purchase the Partnership Units subject
to the Exchange Notice pursuant to Section 8.05(b); and provided further, that
no Limited Partner may deliver more than two Exchange Notices during each
calendar year.  A Limited Partner may not
exercise the Exchange Right for less than 1,000 Partnership Units or, if such
Limited Partner holds less than 1,000 Partnership Units, all of the Partnership
Units held by such Partner.  The
Exchanging Partner shall have no right, with respect to any Partnership Units
so exchanged, to receive any distribution paid with respect to such Partnership
Units if the record date for such distribution is on or after the Specified
Exchange Date.

(b)           Notwithstanding
the provisions of Section 8.05(a), a Limited Partner that exercises the
Exchange Right shall be deemed to have also offered to sell the Partnership
Units described in the Exchange Notice to the Company, and the Company may, in
its sole and absolute discretion, elect to purchase directly and acquire such
Partnership Units by paying to the Exchanging Partner either the Cash Amount or
the REIT Shares Amount, as elected by the Company (in its sole and absolute
discretion), on the Specified Exchange Date, whereupon the Company shall
acquire the Partnership Units offered for exchange by the Exchanging Partner
and shall be treated for all purposes of this Agreement as the owner of such
Partnership Units.  If the Company shall
elect to exercise its right to purchase Partnership Units under this Section
8.05(b) with respect to an Exchange Notice, it shall so notify the Exchanging
Partner within five business days after the receipt by the Company of such
Exchange Notice.  Unless the Company (in
its sole and absolute discretion) shall exercise its right to purchase
Partnership Units from the Exchanging Partner pursuant to this Section 8.05(b),
the Company shall have no obligation to the Exchanging Partner or the
Partnership with respect to the Exchanging Partner’s exercise of an Exchange
Right.  In the event the Company shall
exercise its right to purchase Partnership Units with respect to the exercise
of an Exchange Right in the manner described in the first sentence of this
Section 8.05(b), the Partnership shall have no obligation to pay any amount to
the Exchanging Partner with respect to such Exchanging Partner’s exercise of
such Exchange Right, and each of the Exchanging Partner and the Company shall
treat the transaction between the Company and the Exchanging Partner for
federal income tax purposes as a sale of the Exchanging Partner’s Partnership
Units to the Company.  Each Exchanging 

 31
 

 

Partner agrees to execute
such documents as the Company may reasonably require in connection with the
issuance of REIT Shares to such Exchanging Partner upon exercise of its
Exchange Right.

(c)           Notwithstanding
the provisions of Sections 8.05(a) and 8.05(b), a Limited Partner shall not be
entitled to exercise the Exchange Right if the delivery of REIT Shares to such
Partner on the Specified Exchange Date by the Company pursuant to Section
8.05(b) (regardless of whether or not the Company would in fact exercise its
rights under Section 8.05(b)) would (i) result in such Partner or any other
person owning, directly or indirectly, REIT Shares in excess of the ownership
limitations described in the Articles of Incorporation and calculated in
accordance therewith, (ii) result in REIT Shares being owned by fewer than 100
persons (determined without reference to any rules of attribution), except as
provided in the Articles of Incorporation, (iii) result in the Company being “closely
held” within the meaning of Section 856(h) of the Code, (iv) cause the Company
to own, directly or constructively, 10% or more of the ownership interests in a
tenant of the Company’s, the Partnership’s, or a Subsidiary Partnership’s real
property within the meaning of Section 856(d)(2)(B) of the Code, or (v) cause
the acquisition of REIT Shares by such Partner to be “integrated” with any
other distribution of REIT Shares for purposes of complying with the
registration provisions of the Securities Act, provided, that if such Partner
delivers an opinion of counsel that is reasonably satisfactory to the Company
providing that the acquisition of REIT Shares by such Partner will not be “integrated”
with any other distribution of REIT Shares for purposes of complying with the
Securities Act, then the General Partner may not prevent such Partner from
exercising the Exchange Right by virtue of this clause (v).  The General Partner, in its sole and absolute
discretion, may, with the consent of the Company, waive any of the restrictions
on exchange set forth in this Section 8.05(c); provided, however, that in the
event any such restriction is waived, the Exchanging Partner shall be paid the
Cash Amount.

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

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

8.06         Call Right.

(a)           Subject
to Section 8.06(c) below, and subject to the modification of any rights or
obligations provided for herein by agreement(s) between the Company and any one
or more Limited Partners with respect to the Partnership Units held by them, at
any time after the expiration of the Holding Period for the Partnership Units
in question, the Company shall have the right (the “Call Right”)
to purchase all of the Partnership Units held by a Limited Partner at a price
equal to the Cash Amount; provided, however, that the Company (or any of its
Affiliates) may, in the Company’s sole and absolute discretion, elect to
purchase such Partnership Units by paying to the Partner in question the REIT
Shares Amount in lieu of the Cash Amount. 
The Call Right shall be exercised pursuant to a Call Notice delivered by
the Company to any such Limited Partner. 
The Company may not exercise the Call Right for less than the entire
interest of a Limited Partner in the Partnership.  A Limited Partner receiving the 

 32
 

 

Call Notice described
above shall have no rights with respect to any interest in the Partnership
other than the right to receive payment for its interest in the Partnership in
cash or REIT Shares in accordance with this Section 8.06.  An assignee of a Limited Partner shall be
bound by and subject to the Call Right of the Company pursuant to this Section
8.06.  In connection with any exercise of
such Call Right by the Company with respect to an assignee, the Cash Amount (or
REIT Shares Amount) shall be paid by the Company directly to such assignee and
not to the Limited Partner from which such assignee acquired its Partnership
Units.  The Company shall be unable to
exercise the Call Right and the Call Right shall lapse upon the occurrence of a
Liquidating Event unless and until the Partners shall continue the business of
the Partnership under Section 7.03 hereof.

(b)           (i)            Within 30 days after the delivery of
the Call Notice by the Company to a Limited Partner under this Section 8.06,
the Company (subject to the limitations set forth in Section 8.06(c)) shall
transfer and deliver the Cash Amount (or the REIT Shares Amount) to such
Limited Partner or, as applicable, its assignee, whereupon the Company (or its
designee) shall acquire the Partnership Units of such Limited Partner or, as
applicable, its assignee, and shall be treated for all purposes of this
Agreement as the owner of such Partnership Units (and as a Limited Partner with
respect to such Partnership Units).

(ii)           In the event that the Company elects
to pay such Limited Partner in the form of the REIT Shares Amount and such REIT
Shares Amount is not a whole number of REIT Shares, the Limited Partner shall
be paid (A) the number of REIT Shares which equals the nearest whole number
less than such amount plus (B) an amount of cash which the Company determines,
in its reasonable discretion, to represent the fair value of the remaining
fractional REIT Share which would otherwise be payable to the Limited Partner.

(iii)          Each Limited Partner agrees to deliver
to the Company the Partnership Unit Certificate(s) representing its Limited
Partnership Interest and to execute such documents as the Company may
reasonably require in connection with the issuance of REIT Shares upon exercise
of the Call Right (including without limitation an assignment of Partnership
Units pursuant to the terms of which such Limited Partner (A) represents,
warrants and certifies that it has marketable and unencumbered title to its
Partnership Units, free and clear of the rights of or interest of any other
person or entity, that it has the full right, power and authority to transfer
and surrender its Partnership Units, and that it has obtained the consent or
approval of all persons or entities, if any, having the right to consent to or
approve of such transfer and surrender, and (B) agrees to indemnify and
hold the Company harmless from and against any and all liabilities, charges,
costs and expenses relating to such Limited Partner’s Partnership Units which
are subject to the Call Right or the exercise of the Call Right).

(c)           Notwithstanding
the provisions of Sections 8.06(a) and 8.06(b) above, the Company shall not be
entitled to exercise the Call Right if (i) a Liquidating Event has occurred
with regard to the Partnership and the Partnership has not been continued under
Section 7.03 hereof; or (ii) the delivery of REIT Shares to the Limited Partner
(A) would be prohibited under the Articles of Incorporation, (B) would
adversely affect the ability of the Company to continue to qualify as a REIT or
subject the Company to any additional taxes under Section 857 or Section 4981
of the Code, or (C) would be prohibited under applicable federal or state
securities laws or regulations.

(d)           Each
Limited Partner covenants and agrees with the Company that all Partnership
Units delivered in connection with the Call Right shall be delivered to the
Company free and clear of all liens and encumbrances and, notwithstanding
anything contained herein to the contrary, the General Partner shall not be
under any obligation to acquire a Limited Partner’s Partnership Units (i) to
the extent that any such Partnership Units are subject to any such liens or
encumbrances or (ii) in the event that the Limited Partner shall fail to give
the Company adequate assurances that such Partnership Units are not subject to
any such liens or encumbrances or shall fail to agree to fully indemnify the
Company from any such liens or encumbrances as well as the liabilities, charges,
costs and expenses referenced in the last section of Section 8.06(b)(iii).  Each Limited Partner further agrees that, in
the event any state or local transfer tax is 

 33
 

 

payable as a result of
the transfer of its Partnership Units to the Company, such Limited Partner
shall assume and pay such transfer tax.

8.07         Duties
and Conflicts.  The General Partner recognizes that
the Limited Partners and their Affiliates have or may have other business
interests, activities and investments, some of which may be in conflict or
competition with the business of the Partnership, and that such Persons are
entitled to carry on such other business interests, activities and
investments.  The Limited Partners and
their Affiliates may engage in or possess an interest in any other business or
venture of any kind, independently or with others, on their own behalf or on
behalf of other entities with which they are affiliated or associated, and such
Persons may engage in any activities, whether or not competitive with the
Partnership, without any obligation to offer any interest in such activities to
the Partnership or to any Partner. 
Neither the Partnership nor any Partner shall have any right, by virtue
of this Agreement, in or to such activities, or the income or profits derived
therefrom, and the pursuit of such activities, even if competitive with the
business of the Partnership, and such activities shall not be deemed wrongful
or improper.

ARTICLE
IX

TRANSFERS OF LIMITED PARTNERSHIP INTERESTS

9.01         Purchase for Investment.

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

(b)           Each
Limited Partner agrees that it will not sell, assign or otherwise transfer its
Partnership Interest or any fraction thereof, whether voluntarily or by
operation of law or at judicial sale or otherwise, to any Person who does not
make the representations and warranties to the General Partner set forth in
Section 9.01(a) above.

9.02         Restrictions on Transfer of Limited Partnership
Interests.

(a)           Subject
to the provisions of Sections 9.02(b), 9.02(c) and 9.02(d), no Limited Partner
may offer, sell, assign, hypothecate, pledge or otherwise transfer all or any
portion of its Limited Partnership Interest, or any of such Limited Partner’s
economic rights as a Limited Partner, whether voluntarily or by operation of
law or at judicial sale or otherwise (collectively, a “Transfer”),
without the consent of the General Partner, which consent may be granted or
withheld in its sole and absolute discretion. 
Any such purported transfer undertaken without such consent shall be considered
to be null and void ab initio and shall not be given effect.  The Original Limited Partner acknowledges
that the General Partner may or may not grant its consent with respect to any
Transfer by the Original Limited Partner prior to the Transfer Restriction
Date; provided, that the Original Limited Partner shall not be prohibited from
a Transfer of its Partnership Interest pursuant to the exercise of its right to
exchange its Partnership Interest for REIT Shares pursuant to Section 8.05
above, in which case the Original Limited Partner acknowledges that the General
Partner also may or may not grant its consent with respect to any Transfer of
said REIT Shares prior to the Transfer Restriction Date.  The General Partner may require, as a
condition of any Transfer to which it consents, that the transferor assume all
costs incurred by the Partnership in connection therewith.

(b)           No
Limited Partner may withdraw from the Partnership other than as a result of:
(i) a permitted Transfer (i.e., a Transfer consented to as contemplated by
paragraph (a) above or paragraph (c) below or a Transfer made pursuant to
Section 9.05 below) of all of its Partnership Units pursuant to this Article IX
pursuant to an exchange of all of its Partnership Units pursuant to Section
8.05 above; or (ii) a Transfer made pursuant to the sale of all its Partnership
Units pursuant to Section 8.06 above. 
Upon 

 34
 

 

the permitted Transfer or
redemption of all of a Limited Partner’s Partnership Units, such Limited
Partner shall cease to be a Limited Partner.

(c)           Subject
to Sections 9.02(d), 9.02(e) and 9.02(f), a Limited Partner may Transfer, with
the consent of the General Partner, all or a portion of its Partnership Units
to (i) a parent or parent’s spouse, natural or adopted descendants, a spouse of
any such descendant, a brother or sister, or a trust created by such Limited
Partner for the benefit of such Limited Partner and/or any such person(s), for
which trust such Limited Partner or any such person(s) is a trustee, (ii) a
corporation controlled by a Person or Persons named in (i) above, or (iii) if
the Limited Partner is an entity, its beneficial owners.

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

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

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

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

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

9.03         Admission of Substitute Limited Partner.

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

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

 35
 

 

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

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

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

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

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

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

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

(c)           The
General Partner shall cooperate with the Person seeking to become a Substitute
Limited Partner by preparing the documentation required by this Section 9.03
and making all official filings and publications.  The Partnership shall take all such action as
promptly as practicable after the satisfaction of the conditions in this
Article IX to the admission of such Person as a Limited Partner of the
Partnership.

9.04         Rights of Assignees of Partnership Interests.

(a)           Subject
to the provisions of Sections 9.01 and 9.02 hereof, except as required by
operation of law, the Partnership shall not be obligated for any purposes
whatsoever to recognize the assignment by any Limited Partner of its
Partnership Interest until the Partnership has received notice thereof.

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

9.05         Effect of Bankruptcy, Death, Incompetence or Termination
of a Limited Partner.  The occurrence of an Event of
Bankruptcy as to a Limited Partner, the death of a Limited Partner or a final
adjudication that a Limited Partner is incompetent (which term shall include,
but not be limited to, insanity) shall not cause the termination or dissolution
of the Partnership, and the business of the Partnership shall continue if an
order for relief in a bankruptcy proceeding is entered against a Limited
Partner, the trustee or receiver of his estate or, if he dies, his executor,
administrator or trustee, or, if he is 

 36
 

 

finally adjudicated incompetent, his committee, guardian or
conservator, and any such Person shall have the rights of such Limited Partner
for the purpose of settling or managing his estate property and such power as
the bankrupt, deceased or incompetent Limited Partner possessed to assign all
or any part of his Partnership Interest and to join with the assignee in
satisfying conditions precedent to the admission of the assignee as a
Substitute Limited Partner.

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

ARTICLE X

BOOKS AND RECORDS; ACCOUNTING; TAX MATTERS

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

10.02       Custody of Partnership Funds; Bank Accounts.

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

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

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

10.04       Annual Tax Information and Report.  The
General Partner will use its best efforts to supply within 75 days after the
end of each fiscal year of the Partnership to each person who was a Limited
Partner at any time during such year the tax information necessary to file such
Limited Partner’s individual tax returns as shall be reasonably required by
law, and in all events the General Partner shall furnish such information
within the time required by applicable law.

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

(a)           The
General Partner shall be the Tax Matters Partner of the Partnership within the
meaning of Section 6231(a)(7) of the Code. 
As Tax Matters Partner, the General Partner shall have the right and
obligation to take all actions authorized and required, respectively, by the
Code for the Tax Matters Partner.  The
General Partner shall have the right to retain professional assistance in respect
of any audit of the Partnership by the Service and all out-of-pocket expenses
and fees incurred by the General Partner on behalf of the Partnership as Tax
Matters Partner shall constitute Partnership expenses.  In the event the General Partner receives
notice of a final Partnership adjustment under Section 6223(a)(2) of the Code,
the General Partner shall either (i) file a court petition for judicial review
of such final adjustment within the period provided under Section 6226(a) of
the Code, a copy of which petition shall be mailed to all Limited Partners on
the date such petition is filed, or (ii) mail a written notice to all Limited
Partners, within such period, that describes the General Partner’s reasons for
determining not to file such a petition.

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

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

10.06       Reports to Limited Partners.

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

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

 38
 

 

ARTICLE
XI

AMENDMENT OF AGREEMENT; MEETINGS

11.01       Amendment.  The General
Partner’s consent shall be required for any amendment to this Agreement.  The General Partner, without the consent of
the Limited Partners, may amend this Agreement in any respect; provided,
however, that the following amendments shall require the consent of Limited
Partners holding more than 50% of the Percentage Interests of the Limited
Partners:

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

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

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

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

The foregoing notwithstanding, the approval of any
amendment to this Agreement that shall be part of a plan of merger, plan of
exchange or plan of conversion involving the Partnership or the Partnership
Interests shall be governed by Article XII.

11.02       Meetings of Partners.

(a)           The
Partners may but shall not be required to hold any annual, periodic or other
formal meetings.  Meetings of the Partners may be called by the
General Partner or by any Limited Partner or Limited Partners holding at least
10% of the Partnership Units in the Partnership.

(b)           The
Partner or Partners calling the meeting may designate any place within the
State of Texas as the place of meeting for any meeting of the Partners; and
Partners holding at least a majority of the Partnership Units in the
Partnership may designate any place outside the State of Texas as the place of
meeting for any meeting of the Partners. 
If no designation is made, or if a special meeting is called, the place
of meeting shall be the principal place of business of the Partnership.

(c)           Except
as provided in Section 11.02(d), written notice stating the place, day and hour
of the meeting and the purpose or purposes for which the meeting is called shall be
delivered not less than ten (10) nor more than ninety (90) days before the date
of the meeting, either personally or by mail, by or at the direction of the
Partner or Partners calling the meeting, to each Partner entitled to vote at
such meeting and to each Partner not entitled to vote who is entitled to notice
of the meeting.

(d)           Anything
in this Agreement to the contrary notwithstanding, with respect to any meeting
of the Partners, any Partner who in person or by proxy shall have waived in
writing notice of the meeting, either before or after such meeting, or who
shall attend the meeting in person or by proxy, shall be deemed to have waived notice of such meeting
unless such Partner attends for the express purpose of objecting, at the
beginning of the meeting, and does so object to the transaction of any business
because the meeting is not lawfully called or convened.

(e)           If
all of the Partners shall meet at any time and place, either within or outside
of the State of Texas, in person or by proxy, and consent to the holding of a
meeting at such time and place, such meeting shall be valid without call or notice, and at such
meeting lawful action may be taken.

 

 39

 

(f)            For the purpose of
determining Partners entitled to notice of or to vote at any meeting of
Partners or any adjournment thereof, the date on which notice of the meeting is
mailed shall be the record date. When a determination of Partners entitled to
vote at any meeting of Partners has been made as provided in this Section, such
determination shall apply to any adjournment thereof.

(g)           Partners
holding at least a majority of the Partnership Units entitled to vote at a
meeting, represented in person or by proxy, shall constitute a quorum at any
meeting of Partners. In the absence of a quorum at any such meeting, Partners
holding at least a majority of Partnership Units so represented may adjourn the
meeting to another time and place.  Any
business which might have been transacted at the original meeting may be
transacted at any adjourned meeting at which a quorum is present.  No notice of an adjourned meeting need be
given if the time and place are announced at the meeting at which the
adjournment is taken unless the adjournment is for more than 120 days.  The Partners present at a duly organized
meeting may continue to transact business until adjournment, notwithstanding
the withdrawal during such meeting of that number Partnership Units whose
absence would cause less than a quorum to be present.

(h)           If
a quorum is present, the affirmative vote of Partners holding a majority of the
Partnership Units entitled to vote, present in person or represented by proxy,
shall be binding on all Partners, unless the vote of a greater or lesser
proportion or number of Partnership Units or Partners is otherwise required by
applicable law or by this Agreement. 
Unless otherwise expressly provided herein or required under applicable
law, Partners who have an interest (economic or otherwise) in the outcome of
any particular matter upon which the Partners’ vote or consent is required may
vote or consent upon any such matter and their Partnership Units, vote or
consent, as the case may be, shall be counted in the determination of whether
the requisite matter was approved by the Partners.

(i)            At
all meetings of Partners, a Partner may vote in person or by proxy executed in
writing by the Partner or by the Partner’s duly authorized attorney-in-fact.
Such proxy shall be filed with the General Partner before or at the time of the meeting. No proxy
shall be valid after eleven months from the date of its execution, unless
otherwise provided in the proxy.

(j)            Action
required or permitted to be taken at a meeting of Partners may be taken without
a meeting if the action is evidenced by one or more written consents or
approvals describing the action taken and signed by sufficient Partners or
Partners holding sufficient Partnership Units, as the case may be, to approve such action had such action
been properly voted on at a duly called meeting of the Partners.  Action taken under this Section 11.02(j) is
effective when the requisite Partners or Partners with the requisite
Partnership Units, as the case may be, have signed the consent or approval,
unless the consent specifies a different effective date.

ARTICLE
XII

MERGER, EXCHANGE OR CONVERSION

12.01       Merger, Exchange or Conversion of Partnership.

(a)           The
Partnership may (i) adopt a plan of merger and may merge with or into one or
more domestic or foreign limited partnerships or other entities with the
resulting entity being one or more surviving entities, (ii) adopt a plan of
exchange by which a domestic or foreign limited partnership or other entity is
to acquire all of the outstanding Partnership Interests of the Partnership in
exchange for cash, securities or other property of the acquiring domestic or
foreign limited partnership or other entity or (iii) adopt a plan of conversion
and convert to a foreign limited partnership or other entity.  Any such plan of merger, plan of exchange, or
plan of conversion shall otherwise comply with the requirements of this
Agreement and the Act.

(b)           Any
merger pursuant to a plan of merger described in Section 12.01(a)(i) hereof
shall be conditioned upon the merger being permitted by the laws under which
each other entity that is a party to the merger is incorporated or organized or
by the constituent documents of such other entity that are not 

 40
 

 

inconsistent with such
laws.  Any exchange pursuant to a plan of
exchange described in Section 12.01(a)(ii) hereof shall be conditioned upon the
issuance of shares or other interests of the acquiring foreign limited
partnership or other entity being permitted by the laws under which such
foreign limited partnership or other entity is incorporated or organized or is
not inconsistent with such laws.  Any
conversion pursuant to a plan of conversion described in Section 12.01(a)(iii)
hereof shall be conditioned upon such conversion being permitted by, or not
inconsistent with, the laws of the jurisdiction in which the converted entity
is to be incorporated, formed or organized and the incorporation, formation or
organization of the converted entity is effected in compliance with such laws.

(c)           The
Partnership may adopt a plan of merger, plan of exchange or plan of conversion
if the General Partner acts upon and the Limited Partners (if required by
Section 12.02 below) approve the plan of merger, plan of exchange or plan of
conversion in the manner prescribed in Section 12.02 below.

12.02       Approval of Plan of Merger, Exchange or Conversion.

(a)           Except
as provided by Section 12.02(g) below, after acting on a plan of merger, plan
of exchange or plan of conversion in the manner prescribed by Section
12.02(b)(i), the General Partner shall submit the plan of merger, plan of
exchange or plan of conversion for approval by the Limited Partners.

(b)           Except
as provided by Section 12.02(f) below, for a plan of merger, plan of exchange
or plan of conversion to be approved:

(i)            the General Partner shall adopt a
resolution recommending that the plan of merger, plan of exchange or plan of
conversion be approved by the Limited Partners, unless the General Partner
determines that for any reason it should not make that recommendation, in which
case the General Partner shall adopt a resolution directing that the plan of
merger, plan of exchange or plan of conversion be submitted to the Limited
Partners for approval without recommendation; and

(ii)           the Limited Partners entitled to vote
on the plan of merger, plan of exchange or plan of conversion must approve the
plan.

(c)           The
General Partner may condition its submission to the Limited Partners of a plan
of merger, plan of exchange or plan of conversion, and the effectiveness of
such plan, on any basis, including without limitation that a specified
percentage of the Percentage Interests of the Limited Partners in excess of a
majority of the Percentage Interests of the Limited Partners be required for
the approval of the plan of merger, plan of exchange or plan of conversion.

(d)           The
General Partner shall notify each Limited Partner, whether or not entitled to
vote, of the meeting of the Limited Partners at which the plan of merger, plan
of exchange or plan of conversion is to be submitted for approval in accordance
with this Section 12.02 and applicable law. 
The notice shall be given at least twenty (20) days before the meeting
and shall state that the purpose, or one of the purposes, of the meeting is to
consider the plan of merger, plan of exchange or plan of conversion and shall
contain or be accompanied by a copy or summary of the plan.  Any such approval may be by written consent
of the requisite Limited Partners as would be required to approve the plan at
any meeting where all the Limited Partners are present.

(e)           Unless
the General Partner (acting pursuant to Section 12.02(c)) requires a greater
vote, the vote of the Limited Partners required for approval of a plan of
merger, plan of exchange or plan of conversion shall be the affirmative vote of
the holders of more than 50% of the Percentage Interests of the Limited
Partners entitled to vote thereon.

(f)            Unless
applicable law otherwise requires (in which case the approval of the Limited
Partners shall continue to be required and the foregoing provisions of this
Section 12.02 shall continue to 

 41
 

 

apply), (1) approval by
the Limited Partners on a plan of exchange shall not be required, and the
foregoing provisions of this Section 12.02 do not apply, if the Partnership is
the acquiring entity in the plan of exchange, and (2) approval by the Limited
Partners on a plan of merger or a plan of conversion shall not be required and
the foregoing provisions of this Section 12.02 do not apply, if:

(i)            a limited partnership is the sole
surviving or resulting entity;

(ii)           the partnership agreement of the
surviving or resulting limited partnership will not materially differ from this
Agreement before the merger or conversion in any manner other than as to
applicable law or other insignificant conforming differences;

(iii)          Limited Partners who held Limited
Partnership Interests immediately before the effective date of the merger or
conversion will hold interests in the surviving or resulting entity in the same
proportions, immediately after the effective date of the merger or conversion;
and

(iv)          the General Partner adopts a
resolution approving the plan of merger or plan of conversion.

(g)           After
a plan of merger, plan of exchange or plan of conversion is approved, and at
any time before the merger, exchange or conversion has become effective, the
plan of merger, plan of exchange or plan of conversion may be abandoned
(subject to any contractual rights by any of the entities that are a party
thereto), without action by the Limited Partners, in accordance with the
procedures set forth in the plan of merger, plan of exchange or plan of
conversion or, if no such procedures are set forth in the plan, in the manner
determined by the General Partner.

12.03       Rights of Dissenting Limited Partners.

(a)           In
the absence of fraud in the transaction, the remedy provided by this Section
12.03 to a Limited Partner voting against any merger, exchange or conversion or
objecting to a merger, exchange or conversion approved by the written consent
of Limited Partners (a “Dissenting Limited
Partner”) is the exclusive remedy for the recovery of the value of
his Limited Partnership interests or money damages with respect to the
transaction.  If the existing, surviving,
or new corporation or limited partnership (foreign or domestic) or other
entity, as the case may be, complies with the requirements of this
Section 12.03, any Dissenting Limited Partner who fails to comply with the
requirements of this Section 12.03 shall not be entitled to bring suit for
the recovery of the value of his Limited Partnership interests or money damages
with respect to the transaction.  A “Dissenting
Limited Partner” in respect of any merger, exchange or conversion shall
expressly exclude any Limited Partner who votes in favor of the related plan of
merger, plan of exchange or plan of conversion or who abstains or fails to
timely vote therefor.  In the event of a
plan of merger, plan of exchange or plan of conversion approved by written
consent, a “Dissenting Limited Partner” in respect of any related merger,
exchange or conversion shall expressly exclude Limited Partners who provide
such written consent and Limited Partners who fail to object to the merger,
exchange or conversion and demands payment for such Limited Partner’s Limited
Partnership Interest in writing to the General Partner within twenty (20) days
after notice to the Limited Partners of the receipt by the Partnership of
written consents sufficient to approve such merger, exchange or
conversion.  All such Limited Partners who
are not included within the definition of Dissenting Limited Partner in respect
of any merger, exchange or conversion shall participate in the merger, exchange
or conversion according to the approved plan of merger, plan of exchange or
plan of conversion.

(b)           Any
Dissenting Limited Partner who has opted for payment for his Limited
Partnership interests shall not thereafter be entitled to vote or exercise any
other rights of a Limited Partner except the right to receive payment for his
Limited Partnership interests and the right to maintain an appropriate 

 42
 

 

action to obtain relief
on the ground that the transaction would be or was fraudulent.  Limited Partnership Interests of Dissenting
Limited Partners for which payment has been made shall not thereafter be
considered outstanding for the purposes of any subsequent vote of the Limited
Partners.

(c)           Within
twenty (20) days after a Dissenting Limited Partner votes against any plan of
merger, plan of exchange or plan of conversion which is approved by a vote of
the Limited Partners, or in connection with a Limited Partner’s objection to
any plan of merger, plan of exchange or plan of conversion approved by the
written consent of the Limited Partners, the Dissenting Limited Partner may
demand by written notice to the General Partner that payment for his Limited
Partnership Interest be made.  Upon
receipt of such a payment demand, the General Partner shall (i) make a notation
on the records of the Partnership that such demand has been made and (ii)
within a reasonable period of time after the later of the receipt of a payment
demand or the consummation of the merger, exchange or conversion, cause the
Partnership to pay to the Dissenting Limited Partner the fair value of such
Dissenting Limited Partner’s Partnership Interest without interest.  The fair value of a Dissenting Limited
Partner’s Partnership Interest shall be an amount equal to the Dissenting
Limited Partner’s pro rata share (as would be determined under Section 5.06
hereof if the Partnership were liquidating) of the appraised value of the net assets
of the Partnership based on an appraisal of all assets of the Partnership from
a Competent Independent Expert.  The
assets of the Partnership shall be appraised on a consistent basis.  The appraisal shall be based on an evaluation
of all relevant information and shall include the current value of the
Partnership’s assets as of the date immediately prior to the proposed merger,
exchange or conversion.  The appraisal
shall assume an orderly liquidation of the Partnership’s assets over a twelve
(12) month period, shall consider other balance sheet items, and shall be net
of the assumed cost of sale.  The terms
of the engagement of the appraiser shall clearly state that the engagement is
for the benefit of the Partnership and its Limited Partners.  A summary of the independent appraisal,
including all material assumptions underlying the appraisal, shall be provided
to Dissenting Limited Partners in connection with the payment of the fair value
of their Limited Partnership Interests.

(d)           If
a Dissenting Limited Partner shall fail to make a payment demand within the
period provided in Section 12.03(c) hereof or, in respect of a plan of merger,
plan of exchange or plan of conversion approved by written consent of the
Limited Partners, shall fail to provide notice of dissent within the period set
forth in Section 12.03(a) hereof, such Dissenting Limited Partner and all
persons claiming under him shall be conclusively presumed to have approved and
ratified the merger, conversion or exchange and shall be bound thereby, the
right of such Dissenting Limited Partner to be paid the fair value of his
Limited Partnership Interest shall cease, and his status as a Limited Partner
shall be restored without prejudice to any proceedings which may have been
taken during the interim, and such Dissenting Limited Partner shall be entitled
to receive any distributions made to Limited Partners in the interim.

12.04       Roll-Up Transactions.  If the
Partnership adopts any plan of merger, plan of exchange or plan of conversion
which, if effected, would result in a “Roll-Up Transaction”, as defined in the
Articles of Incorporation, then any such transaction shall be subject to and
effected strictly in compliance with the provisions applicable to Roll-Up
Transactions set forth in Section 13.3 of the Articles of Incorporation.

ARTICLE
XIII

GENERAL PROVISIONS

13.01       Notices.  All communications
required or permitted under this Agreement shall be in writing and shall be
deemed to have been given when delivered personally or upon deposit in the United
States mail, registered, postage prepaid return receipt requested, if to the
General Partner, at 15601 Dallas Parkway, Suite 600, Addison, Texas 75001, if
to any other Partner, at such address set forth in Exhibit A attached
hereto; provided, however, that any Partner may specify a different address by
notifying the General Partner in writing of such different address.  Notices to the Partnership shall be delivered
at or mailed to its specified office.

 43
 

 

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

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

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

13.05       Entire Agreement.  This
Agreement and exhibits attached hereto constitute the entire Agreement of the
Partners and supersede all prior written agreements (including, without
limitation, the Original Agreement) and prior and contemporaneous oral
agreements, understandings and negotiations with respect to the subject matter
hereof, except as otherwise set forth herein.

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

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

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

13.09       Governing  Law.  This
Agreement shall be governed by and construed in accordance with the laws of the
State of Texas; provided, however, that any cause of action for violation of
federal or state securities law shall not be governed by this Section 13.09.

13.10       Arbitration.  Notwithstanding
anything to the contrary contained in this Agreement, all claims, disputes and
controversies between the parties hereto (including, without limitation, any
claims, disputes and controversies between the Partnership and any one or more
of the Partners and between or among any Partners) arising out of or in
connection with this Agreement or the Partnership created hereby, or any act or
failure to act by the Company, the General Partner or any other Partner
hereunder, shall be resolved by binding arbitration in Dallas, Texas by the
American Arbitration Association (the “AAA”),
in accordance with this Section 13.10. 
Any arbitration called for by this Section 13.10 shall be conducted in
accordance with the following procedures:

(a)           Any
party hereto (the “Requesting Party”)
may demand arbitration pursuant to this Section 13.10 at any time by giving
written notice of such demand (the “Demand Notice”)
to all other Partners and (if the Requesting Party is not the Partnership) to
the Partnership which Demand Notice shall describe in reasonable detail the
nature of the claim, dispute or controversy.

(b)           Within
15 days after the giving of a Demand Notice or such additional time as required
by the AAA, the AAA shall select and designate in writing three reputable,
disinterested individuals willing to act as an arbitrator of the claim, dispute
or controversy in question.

(c)           The
presentations of the parties hereto in the arbitration proceeding shall be
commenced and completed within sixty (60) days after the selection of the
arbitration panel pursuant to subsection (b) above, and the arbitration panel
shall render its decision (and specify in reasonable detail its reasons 

 44
 

 

therefor) in writing
within thirty (30) days after the completion of such presentations.  Any decision concurred in by any two (2) of
the arbitrators shall constitute the decision of the arbitration panel, and
unanimity shall not be required.

(d)           The
arbitration panel shall include in its decision a direction that all of the
attorneys’ fees and costs of any party or parties and the costs of such
arbitration be paid by the losing party or parties in the arbitration.  On the application of a party before or after
the initial decision of the arbitration panel, and proof of its attorneys’ fees
and costs, the arbitration panel shall order the other party to make any
payments directed pursuant to the preceding sentence.

Any decision rendered by the arbitration panel in
accordance herewith shall be final and binding on the parties hereto, and
judgment thereon may be entered by any state or federal court of competent
jurisdiction.  Arbitration shall be the
exclusive method available for resolution of claims, disputes and controversies
arising between and among the parties relating to this Agreement and the conduct
of the parties hereto in relation to Partnership matters, and the Company, the
Partnership and its Partners stipulate that the provisions hereof shall be a
complete defense to any suit, action or proceeding in any court or before any
administrative or arbitration tribunal with respect to any such claim,
controversy or dispute.  The provisions
of this Section 13.10 shall survive the dissolution of the Partnership.

Nothing contained herein shall be deemed to give the
arbitrators any authority, power or right to alter, change, amend, modify, add
to, or subtract from any of the provisions of this Agreement.

13.11       Vote of Affiliated Limited Partners.  Notwithstanding
any provision to the contrary set forth in this Agreement, in each instance in
which the consent, approval or vote of Limited Partners is required hereunder,
any Partnership Interest held as a Limited Partner by any Affiliate of the
Sponsor shall not be included for purposes of calculating whether the requisite
approval of Partners is obtained unless, as of the date of determination, there
are no Limited Partners entitled to vote or consent who are not Affiliates of
the Sponsor.

13.12       Acknowledgement as to Exculpation and Indemnification.  THE
PARTIES HERETO ACKNOWLEDGE AND AGREE THAT THIS AGREEMENT CONTAINS EXCULPATION
AND INDEMNIFICATION IN RESPECT OF THE ACTIONS OR OMISSIONS OF THE GENERAL
PARTNER AND DIRECTORS, OFFICERS AND AFFILIATES OF THE GENERAL PARTNER BY THE
PARTNERSHIP EVEN IF SUCH ACTIONS OR OMISSIONS CONSTITUTE
NEGLIGENCE OF SUCH PERSONS.

 

 45

 

IN WITNESS WHEREOF, the parties hereto have hereunder affixed their
signatures to this Amended and Restated Agreement of Limited Partnership of
Behringer Harvard Opportunity OP I, LP as of the 1st day of January, 2007.

GENERAL PARTNER:

BHO, INC.

	
  By:

  	
  /s/ Gerald J. Reihsen, III

  	
   

  	
   

  
	
   

  	
  Gerald J. Reihsen, III, Secretary

  	
   

  	
   

  

 

ORIGINAL LIMITED PARTNER:

BHO BUSINESS TRUST

	
  By:

  	
  Behringer
  Harvard Opportunity REIT I, Inc.,

     its Sole Trustee

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  

 

	
  By:

  	
  /s/ Gerald J. Reihsen, III

  	
   

  	
   

  
	
   

  	
  Gerald J. Reihsen, III,
  Executive Vice President

  	
   

  	
   

  
	
   

  	
  — Corporate Development
  & Legal and Secretary

  	
   

  	
   

  

 

COMPANY:

BEHRINGER HARVARD OPPORTUNITY REIT I, INC.

	
  By:

  	
  /s/ Gerald J. Reihsen, III

  	
   

  	
   

  
	
   

  	
  Gerald J. Reihsen, III,
  Executive Vice President

  	
   

  	
   

  
	
   

  	
  — Corporate Development
  & Legal and Secretary

  	
   

  	
   

  

 

 46
 

 

INDEX OF
EXHIBITS

EXHIBIT A — Limited Partners and Limited Partners’ Capital
Contributions and Partnership Units

EXHIBIT B — Notice of Exercise of Exchange Right

EXHIBIT C — Call Notice

 

 47

 

EXHIBIT
A

LIMITED PARTNERS AND LIMITED PARTNERS’ CAPITAL
CONTRIBUTIONS AND

PARTNERSHIP UNITS

As of January 1, 2007

	
  Partners

  	
   

  	
   

  	
   

  	
  Cash

  Contribution

  	
   

  	
  Agreed Value

  of Property

  Contribution

  	
   

  	
  Partnership

  Units

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  General Partner:

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  BHO Inc.

  	
   

  	
  $

  	
  170

  	
  *

  	
  N/A

  	
   

  	
  17

  	
   

  
	
  15601 Dallas Parkway

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Suite 600

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Addison, Texas 75001

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Original Limited Partner:

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  BHO Business Trust

  	
   

  	
  $

  	
  181,903,896

  	
  *

  	
  N/A

  	
   

  	
  18,246,929

  	
  **

  
	
  15601 Dallas Parkway

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Suite 600

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Addison, Texas 75001

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Additional Limited Partners:

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  

*                 Amount contributed by the predecessor in
interest of the respective entity.

**          Such amount will be automatically adjusted from time to time as
provided in the definition of “Partnership Unit” contained in Article I.

 

 

EXHIBIT
B

NOTICE OF EXERCISE OF EXCHANGE RIGHT

In accordance with the Agreement of Limited Partnership of Behringer
Harvard Opportunity OP I, LP, as amended (the “Agreement”),
the undersigned hereby irrevocably (i) presents for exchange ___________
Partnership Units in Behringer Harvard Opportunity OP I, LP in accordance with
the terms of the Agreement and the Exchange Right referred to therein; (ii)
surrenders such Partnership Units and all right, title and interest therein;
and (iii) directs that the Cash Amount or REIT Shares Amount (as defined in the
Agreement) as determined by the General Partner deliverable upon exercise of
the Exchange Right be delivered to the address specified below, and if REIT
Shares (as defined in the Agreement) are to be delivered, such REIT Shares be
registered or placed in the name(s) and at the address(es) specified below.

	
  Dated:

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  (Signature of Limited
  Partner)

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  (Printed Name of Limited
  Partner)

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  Mailing Address and Phone
  No.:

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  (        )

  	
   

  	
   

  	
  -

  	
   

  	
   

  
									

 

	
  Signature Guaranteed by:

  	
   

  	
   

  	
   

  

 

	
  If REIT Shares are to be issued, issue to:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Name:

  	
   

  	
   

  	
   

  	
   

  
					

 

Mailing Address and Phone No.:

	
  

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  (       )

  	
   

  	
   

  	
  -

  	
   

  	
   

  	
   

  	
   

  
									

 

	
  Social security or other tax identification
  number:

  	
   

  	
   

  

 

 

 

EXHIBIT
C

CALL NOTICE

In accordance with the Agreement of Limited Partnership of Behringer
Harvard Opportunity OP I, LP, as amended (the “Agreement”),
the undersigned hereby irrevocably exercises its Call Right (as defined in the
Agreement) with regard to all of the Partnership Units owned by
_______________________ in Behringer Harvard Opportunity
OP I, LP.  The undersigned
shall pay the [Cash Amount/REIT Shares Amount] to _____________________ at the
notice address of provided in the Agreement upon receipt of (i) the duly
executed Partnership Unit Certificate of ______________________________
transferring all right, title and interest in Partnership Units to the
undersigned, (ii) if REIT Shares are to be delivered, instructions as to the
name, address and taxpayer identification number of the person to whom such
REIT Shares will be registered or placed, and (iii) the representation,
warranty and certification of that ___________________________ (a) has
marketable and unencumbered title to such Partnership Units, free and clear of
the rights of or interests of any other person or entity; (b) has the full
right, power and authority to transfer and surrender such Partnership Units as
provided herein; and (c) has obtained the consent or approval of all persons or
entities, if any, having the right to consent to or approve of such transfer
and surrender.

	
  

  	
   

  	
   

  	
  BEHRINGER
  HARVARD OPPORTUNITY REIT I, INC.

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  

  	
   

  	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  Name:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  Title:

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