Document:

exv10w4

 

EXHIBIT 10.4

AMENDED AND RESTATED

AGREEMENT OF LIMITED PARTNERSHIP

OF

LANDWIN, L.P.

__________, 2006

 

 

TABLE OF CONTENTS

Page

	 	 	 	 	 	 	 
	TABLE OF CONTENTS	 	 	i	 
	 
	 	 	 	 	 	 
	ARTICLE I DEFINED TERMS	 	 	1	 
	 
	 	 	 	 	 	 
	ARTICLE II ORGANIZATIONAL MATTERS	 	 	15	 
	 
	 	 	 	 	 	 
	2.1
	 	Formation	 	 	15	 
	 
	 	 	 	 	 	 
	2.2
	 	Name	 	 	15	 
	 
	 	 	 	 	 	 
	2.3
	 	Registered Office and Agent	 	 	16	 
	 
	 	 	 	 	 	 
	2.4
	 	Principal Place of Business	 	 	16	 
	 
	 	 	 	 	 	 
	2.5
	 	Term and Termination	 	 	16	 
	 
	 	 	 	 	 	 
	2.6
	 	Power of Attorney	 	 	16	 
	 
	 	 	 	 	 	 
	2.7
	 	Effectiveness of this Agreement	 	 	18	 
	 
	 	 	 	 	 	 
	ARTICLE III PURPOSE AND POWERS	 	 	18	 
	 
	 	 	 	 	 	 
	3.1
	 	Purpose and Business	 	 	19	 
	 
	 	 	 	 	 	 
	3.2
	 	Powers	 	 	19	 
	 
	 	 	 	 	 	 
	ARTICLE IV CAPITAL CONTRIBUTIONS; PARTNERSHIP UNITS; ADDITIONAL FUNDS	 	 	20	 
	 
	 	 	 	 	 	 
	4.1
	 	Capital Contributions of the Partners	 	 	20	 
	 
	 	 	 	 	 	 
	4.2
	 	Issuance of Additional Partnership Interests	 	 	21	 
	 
	 	 	 	 	 	 
	4.3
	 	Issuance of Securities by Landwin REIT	 	 	21	 
	 
	 	 	 	 	 	 
	4.4
	 	Additional Funds	 	 	23	 
	 
	 	 	 	 	 	 
	4.5
	 	No Third-Party Beneficiary	 	 	23	 
	 
	 	 	 	 	 	 
	4.6
	 	No Interest	 	 	23	 
	 
	 	 	 	 	 	 
	4.7
	 	No Preemptive Rights	 	 	24	 
	 
	 	 	 	 	 	 
	4.8
	 	Capital Accounts; Adjustments to Carrying Values	 	 	24	 
	 
	 	 	 	 	 	 
	ARTICLE V DISTRIBUTIONS	 	 	25	 
	 
	 	 	 	 	 	 
	5.1
	 	Distributions	 	 	25	 

 i 

 

 

	 	 	 	 	 	 	 
	5.2
	 	Qualification as a REIT	 	 	26	 
	 
	 	 	 	 	 	 
	5.3
	 	Withholding	 	 	26	 
	 
	 	 	 	 	 	 
	5.4
	 	Additional Partnership Interests	 	 	26	 
	 
	 	 	 	 	 	 
	ARTICLE VI ALLOCATIONS	 	 	26	 
	 
	 	 	 	 	 	 
	6.1
	 	Allocation of Profits and Net Losses	 	 	26	 
	 
	 	 	 	 	 	 
	6.2
	 	Special Allocations	 	 	27	 
	 
	 	 	 	 	 	 
	6.3
	 	Tax Allocations	 	 	29	 
	 
	 	 	 	 	 	 
	6.4
	 	Revisions to Allocations to Reflect Issuance of Partnership Interests	 	 	29	 
	 
	 	 	 	 	 	 
	ARTICLE VII MANAGEMENT AND OPERATIONS OF BUSINESS	 	 	30	 
	 
	 	 	 	 	 	 
	7.1
	 	Management	 	 	30	 
	 
	 	 	 	 	 	 
	7.2
	 	Certificate of Limited Partnership	 	 	33	 
	 
	 	 	 	 	 	 
	7.3
	 	Reimbursement of the General Partner	 	 	34	 
	 
	 	 	 	 	 	 
	7.4
	 	Acquisition of Limited Partner Interests by the General Partner	 	 	35	 
	 
	 	 	 	 	 	 
	7.5
	 	Transactions with Affiliates	 	 	35	 
	 
	 	 	 	 	 	 
	7.6
	 	Indemnification	 	 	35	 
	 
	 	 	 	 	 	 
	7.7
	 	Liability of the General Partner	 	 	39	 
	 
	 	 	 	 	 	 
	7.8
	 	Other Matters Concerning the General Partner	 	 	40	 
	 
	 	 	 	 	 	 
	7.9
	 	Title to Partnership Assets	 	 	41	 
	 
	 	 	 	 	 	 
	7.10
	 	Reliance by Third Parties	 	 	41	 
	 
	 	 	 	 	 	 
	ARTICLE VIII RIGHTS AND OBLIGATIONS OF LIMITED PARTNERS	 	 	42	 
	 
	 	 	 	 	 	 
	8.1
	 	Limitation of Liability	 	 	42	 
	 
	 	 	 	 	 	 
	8.2
	 	No Right to Participate in the Management of Business	 	 	42	 
	 
	 	 	 	 	 	 
	8.3
	 	Outside Activities of Limited Partners	 	 	42	 
	 
	 	 	 	 	 	 
	8.4
	 	Return of Capital	 	 	43	 
	 
	 	 	 	 	 	 
	8.5
	 	Rights of Limited Partners Relating to the Partnership	 	 	43	 
	 
	 	 	 	 	 	 
	8.6
	 	Redemption Right	 	 	44	 
	 
	 	 	 	 	 	 
	ARTICLE IX BOOKS, RECORDS, ACCOUNTING AND REPORTS	 	 	47	 
	 
	 	 	 	 	 	 
	9.1
	 	Records and Accounting	 	 	47	 

 ii 

 

 

	 	 	 	 	 	 	 
	9.2
	 	Reports	 	 	47	 
	 
	 	 	 	 	 	 
	ARTICLE X TAX MATTERS	 	 	48	 
	 
	 	 	 	 	 	 
	10.1
	 	Preparation of Tax Returns	 	 	48	 
	 
	 	 	 	 	 	 
	10.2
	 	Tax Elections	 	 	48	 
	 
	 	 	 	 	 	 
	10.3
	 	Tax Matters Partner	 	 	48	 
	 
	 	 	 	 	 	 
	10.4
	 	Organizational Expenses	 	 	50	 
	 
	 	 	 	 	 	 
	10.5
	 	Withholding	 	 	50	 
	 
	 	 	 	 	 	 
	ARTICLE XI TRANSFERS AND WITHDRAWALS	 	 	51	 
	 
	 	 	 	 	 	 
	11.1
	 	Transfer	 	 	51	 
	 
	 	 	 	 	 	 
	11.2
	 	Transfer of the General Partner's General Partner Interest	 	 	52	 
	 
	 	 	 	 	 	 
	11.3
	 	Limited Partners' Rights to Transfer	 	 	52	 
	 
	 	 	 	 	 	 
	11.4
	 	Substituted Limited Partners	 	 	53	 
	 
	 	 	 	 	 	 
	11.5
	 	Assignees	 	 	54	 
	 
	 	 	 	 	 	 
	11.6
	 	General Provisions	 	 	54	 
	 
	 	 	 	 	 	 
	ARTICLE XII ADMISSION OF PARTNERS	 	 	56	 
	 
	 	 	 	 	 	 
	12.1
	 	Admission of Successor General Partner	 	 	56	 
	 
	 	 	 	 	 	 
	12.2
	 	Admission of Additional Limited Partners	 	 	56	 
	 
	 	 	 	 	 	 
	12.3
	 	Amendment of Agreement and Certificate of Limited Partnership	 	 	57	 
	 
	 	 	 	 	 	 
	ARTICLE XIII DISSOLUTION, LIQUIDATION AND TERMINATION	 	 	57	 
	 
	 	 	 	 	 	 
	13.1
	 	Dissolution	 	 	58	 
	 
	 	 	 	 	 	 
	13.2
	 	Winding Up; Liquidation	 	 	58	 
	 
	 	 	 	 	 	 
	13.3
	 	No Obligation to Contribute Deficit	 	 	60	 
	 
	 	 	 	 	 	 
	13.4
	 	Notice of Dissolution	 	 	60	 
	 
	 	 	 	 	 	 
	13.5
	 	Termination of Partnership and Cancellation of Certificate of Limited Partnership	 	 	60	 
	 
	 	 	 	 	 	 
	13.6
	 	Reasonable Time for Winding-Up	 	 	60	 
	 
	 	 	 	 	 	 
	13.7
	 	Waiver of Partition	 	 	60	 
	 
	 	 	 	 	 	 
	ARTICLE XIV AMENDMENT OF PARTNERSHIP AGREEMENT; MEETINGS	 	 	61	 

 iii 

 

 

	 	 	 	 	 	 	 
	14.1
	 	Amendments	 	 	61	 
	 
	 	 	 	 	 	 
	14.2
	 	Meetings of the Partners	 	 	61	 
	 
	 	 	 	 	 	 
	ARTICLE XV GENERAL PROVISIONS	 	 	62	 
	 
	 	 	 	 	 	 
	15.1
	 	Addresses and Notice	 	 	62	 
	 
	 	 	 	 	 	 
	15.2
	 	Titles and Captions	 	 	63	 
	 
	 	 	 	 	 	 
	15.3
	 	Pronouns and Plurals	 	 	63	 
	 
	 	 	 	 	 	 
	15.4
	 	Further Action	 	 	63	 
	 
	 	 	 	 	 	 
	15.5
	 	Binding Effect	 	 	63	 
	 
	 	 	 	 	 	 
	15.6
	 	Creditors	 	 	63	 
	 
	 	 	 	 	 	 
	15.7
	 	Waiver	 	 	63	 
	 
	 	 	 	 	 	 
	15.8
	 	Counterparts	 	 	63	 
	 
	 	 	 	 	 	 
	15.9
	 	Applicable Law	 	 	64	 
	 
	 	 	 	 	 	 
	15.10
	 	Invalidity of Provisions	 	 	64	 
	 
	 	 	 	 	 	 
	15.11
	 	Merger	 	 	64	 
	 
	 	 	 	 	 	 
	15.12
	 	No Rights as Stockholders	 	 	64	 
	 
	 	 	 	 	 	 
	15.13
	 	Entire Agreement	 	 	64	 
	 
	 	 	 	 	 	 
	Partners’ Contributions and Partnership Interests	 	 	69	 

EXHIBITS

	 	 	 	 	 
	Exhibit A
	 	—	 	Partner's Contributions and Partnership Interests
	 
	 	 	 	 
	Exhibit B
	 	—	 	Form of Notice of Redemption Request

 iv 

 

 

AMENDED AND RESTATED

AGREEMENT OF LIMITED PARTNERSHIP

OF

LANDWIN, L.P.

     THIS AMENDED AND RESTATED AGREEMENT OF LIMITED PARTNERSHIP OF LANDWIN, L.P. is by and among
Landwin, LLC, a Delaware limited liability company, as general partner (the “General Partner”), and
Landwin REIT, Inc. and Landwin Advisors, LLC, as the initial limited partners, and those Persons
who have executed this Agreement or a counterpart hereof, or who become parties hereto pursuant to
the terms of this Agreement.

W I T N E S S E T H

     WHEREAS, the General Partner and the Initial Limited Partner formed Landwin, L.P. (the
“Partnership”) as a limited partnership pursuant to the Act by filing a certificate of limited
partnership with the Secretary of State of the State of Delaware on October 24, 2005;

     WHEREAS, the General Partner and the Initial Limited Partner entered into that certain
Agreement of Limited Partnership of Landwin, L.P., dated as of October 24, 2005 (the “Prior
Partnership Agreement”), providing for the organization of the Partnership upon the terms and
conditions set forth therein;

     WHEREAS, the parties thereto desire to amend and restate the Prior Partnership Agreement in
its entirety pursuant to the terms hereof; and

     WHEREAS, this Agreement shall constitute the “partnership agreement” (within the meaning of
the Act) of the Partnership, and shall be binding upon all Persons now or at any time hereafter who
are Partners;

     NOW, THEREFORE, in consideration of the mutual covenants and obligations set forth in this
Agreement, and of other good and valuable consideration, the receipt and sufficiency of which is
hereby acknowledged, the parties hereto, intending legally to be bound, hereby agree as follows:

ARTICLE I

DEFINED TERMS

     Capitalized terms used in this Agreement (including exhibits, schedules and amendments) shall
have the meanings set forth below or in the Section of this Agreement referred to below, except as
otherwise expressly indicated or limited by the context in which they

1

 

appear in this Agreement. All terms defined in this Agreement in the singular have the same
meanings when used in the plural and vice versa. Accounting terms used but not otherwise defined
shall have the meanings given to them under GAAP.

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

     1.2 “Additional Limited Partner” means a Person that has executed and delivered an additional
limited partner signature page in the form attached hereto and has been admitted to the Partnership
as a Limited Partner pursuant to Section 12.2.

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

     (a) credit to such Capital Account any portion of such negative balance which such Partner (i)
is treated as obligated to restore to the Partnership pursuant to the provisions of Section
1.704-1(b)(2)(ii)(c) of the Treasury Regulations, or (ii) is deemed to be obligated to restore to
the Partnership pursuant to the penultimate sentences of Sections 1.704-2(g)(1) and 1.704-2(i)(5)
of the Treasury Regulations; and

     (b) debit to such Capital Account the items described in Sections 1.704-1(b)(2)(ii)(d)(4), (5)
and (6) of the Treasury Regulations.

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

     1.4 “Advisor” means Landwin Advisors, LLC, the advisor to the Partnership and Landwin REIT
pursuant to the Advisory Agreement.

     1.5 “Advisory Agreement” means that certain Advisory Agreement by and among the Advisor, the
Partnership and Landwin REIT dated as of ___, 2006.

     1.6 “Affiliate” means, with respect to a specified Person, any Person that, directly or
indirectly through one or more intermediaries, controls, is controlled by or is under common
control with the specified Person. For this purpose, the term “control” (including the terms
“controlling,” “controlled by” and “under common control with”) means the possession, direct or
indirect, of the power to direct or cause the direction of the management and policies of a Person,
whether through the ownership of voting securities, by contract or otherwise.

     1.7 “Agreed Value” means (a) in the case of any Contributed Property, the fair market value of
such Contributed Property at the time such property is contributed as determined by the General
Partner and agreed to by the contributing party, reduced by any liabilities either

2

 

assumed by the Partnership upon such contribution or to which such property is subject when
contributed, and (b) in the case of any property distributed to a Partner by the Partnership, the
Partnership’s Carrying Value of such property at the time such property is distributed, reduced by
any indebtedness either assumed by such Partner upon such distribution or to which such property is
subject at the time of distribution.

     1.8 “Agreement” means this Amended and Restated Agreement of Limited Partnership of Landwin,
L.P., as originally executed and as amended, modified, supplemented or restated from time to time,
as the context requires.

     1.9 “Articles of Incorporation” means Landwin REIT’s Articles of Incorporation, filed with the
Maryland State Department of Assessments and Taxation, or other organizational document governing
Landwin REIT, as amended, modified, supplemented or restated from time to time.

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

     1.11 “Available Operating Cash” means the cash flows derived by the Partnership from the
operation of the Partnership’s business (other than any Net Capital Event Proceeds or Capital
Contributions) before any deduction for depreciation or amortization and after deduction of:

     (a) all operating costs and expenses including taxes;

     (b) all payments of principal, interest and other charges in respect of any Partnership
indebtedness;

     (c) all expenditures for capital improvements to the Partnership assets or property;

     (d) all investments in any entity (including loans made thereto to the extent such investments
are permitted under this Agreement); and

     (e) all reserves, whether for working capital, debt repayment, new portfolio investments or
otherwise (including for the redemption of Partnership Units) that are established by the General
Partner in the exercise of its sole and absolute discretion.

     1.12 “Book Gain” or “Book Loss” means the gain or loss recognized by the Partnership for
purposes of Section 704(b) of the Code in any Fiscal Year by reason of any sale or disposition with
respect to any of the property or assets of the Partnership (or any deemed sale or disposition in
connection with an adjustment to Carrying Values as described in Section 4.8(b)). Such Book Gain
or Book Loss shall be computed by reference to the Carrying Value of such property or assets as of
the date of such sale or disposition, rather than by reference to the

3

 

tax basis of such property or assets as of such date, and each and every reference herein to
“gain” or “loss” shall be deemed to refer to Book Gain or Book Loss, rather than to tax gain or tax
loss, unless the context manifestly otherwise requires.

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

     1.14 “Capital Account” has the meaning set forth in Section 4.8.

     1.15 “Capital Contribution” means, with respect to any Partner, any cash, cash equivalents or
the Agreed Value of Contributed Property that such Partner contributes or is deemed to contribute
to the Partnership pursuant to Article 4 hereof.

     1.16 “Capital Transaction” means (a) any sale, exchange, taking by eminent domain, damage,
destruction or other disposition of all or any part of the assets of the Partnership, any
Subsidiary or any other Person in which the Partnership holds a direct or indirect interest, other
than tangible personal property disposed of in the ordinary course of business; or (b) any
financing or refinancing of any indebtedness of the Partnership, any Subsidiary or any other Person
in which the Partnership holds a direct or indirect interest; provided, that the receipt by the
Partnership of Capital Contributions shall not constitute a Capital Transaction; and provided
further that no Terminating Capital Transaction shall constitute a Capital Transaction.

     1.17 “Carrying Value” means, except as otherwise provided herein, (a) with respect to a
Contributed Property, the fair market value of such Contributed Property at the time such property
is contributed, as determined by the General Partner and agreed to by the contributing partner,
without reduction for any liabilities either assumed by the Partnership upon such contribution or
to which such property was subject when contributed, reduced (but not below zero) by all
Depreciation with respect to such property charged to the Partners’ Capital Accounts, and (b) with
respect to any other Partnership Asset, the adjusted basis of such Partnership Asset for Federal
income tax purposes, all as of the time of determination. The Carrying Value of any property shall
be adjusted in accordance with Section 4.8(b) from time to time to reflect changes, additions or
other adjustments to the Carrying Value, as deemed appropriate by the General Partner.

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

     1.19 “Certificate” means the Certificate of Limited Partnership of the Partnership, filed on
October 24, 2005, as amended, restated, supplemented or otherwise modified from time to time as
herein provided in accordance with the Act.

     1.20 “Code” means the Internal Revenue Code of 1986, as amended from time to time, and any
subsequent Federal law of similar import, and, to the extent applicable, any Treasury Regulations
promulgated thereunder.

4

 

     1.21 “Common Stock” means a share of the common stock of Landwin REIT, par value $.01 per
share. Common Stock may be issued in one or more classes or series in accordance with the terms of
the Articles of Incorporation. If there is more than one class or series of Common Stock, the term
“Common Stock” shall, as the context requires, be deemed to refer to the class or series of Common
Stock that correspond to the class or series of Partnership Units for which the reference to Common
Stock is made.

     1.22 “Consent” means the consent or approval of a proposed action by a Partner given in
accordance with Section 14.2 hereof.

     1.23 “Consent of the Outside Limited Partners” means the Consent of the Outside Limited
Partners holding a number of Partnership Units greater than fifty percent (50%) of the aggregate
Partnership Units held by all Outside Limited Partners.

     1.24 “Contributed Property” means each property or other asset (but excluding cash and cash
equivalents), in such form as may be contributed by a Partner to the Partnership as permitted by
the Act.

     1.25 “Depreciation” means, for each Fiscal Year, an amount equal to the depreciation,
amortization or other cost recovery deduction allowable with respect to an asset for such year or
other period for Federal income tax purposes; provided, that if the Carrying Value of an asset
differs from its adjusted basis for Federal income tax purposes at the beginning of any such year
or other period, Depreciation shall be determined in the manner described in Treasury Regulations
Section 1.704-1(b)(2)(iv)(g)(3) or 1.704-3(d)(2), whichever is applicable, and if such asset has a
zero adjusted tax basis, Depreciation shall be an amount determined under any reasonable method
selected by the General Partner.

     1.26 “Effective Date” means the date of first closing of the offering of Common Stock pursuant
to the Registration Statement.

     1.27 “6% Return” means, with respect to the Landwin Partners, an amount calculated like simple
interest at the rate of six percent (6%) per annum calculated on the varying daily balances of
Invested Capital of the Landwin Partners during the period to which the 6% Return relates, and
determined on the basis of a 360-day year/30-day month, cumulative for the period for which such 6%
Return is being determined.

     1.28 “6% Return Account” means, with respect to the Landwin Partners, as of any relevant date,
an amount equal to the excess of (i) the 6% Return that has accrued with respect to the Invested
Capital of the Landwin Partners through such date, over (ii) the sum of (A) the cumulative
distributions of Available Cash and Net Capital Event Proceeds made to the Landwin Partners prior
to such relevant date pursuant to Section 5.1 hereof, and (B) the cumulative amounts paid to the
Landwin Partners in redemption of its Partnership Units pursuant to Section 8.6(g) as of such date,
other than such distributions and payments that are applied to reduce the Unrecovered Contribution
Account of the Landwin Partners. All amounts distributed and paid to

5

 

the Landwin Partners pursuant to Sections 5.1 and 8.6(g) shall first be applied to reduce the
Unrecovered Contribution Account of the Landwin Partners until the balance of such Unrecovered
Contribution Account equals zero ($0), and then shall be applied to reduce the 6% Return Account of
the Landwin Partners.

     1.29 “Entity” means any general partnership, limited liability company, proprietorship,
corporation, joint venture, joint-stock company, limited partnership, limited liability
partnership, business trust, firm, trust, estate, governmental entity, cooperative, association or
other foreign or domestic enterprise.

     1.30 “ERISA” means the Employee Retirement Income Security Act of 1974, as amended from time
to time (or any corresponding provisions of succeeding laws).

     1.31 “Fiscal Year” means the fiscal year of the Partnership and shall be the same as its
taxable year, which shall be the calendar year unless otherwise determined by the General Partner
in accordance with the Code.

     1.32 “GAAP” means United States generally accepted accounting principles, as in effect from
time to time.

     1.33 “General Partner” means Landwin, LLC, a Delaware limited liability company, and any
successor as general partner of the Partnership.

     1.34 “General Partner Interest” means a Partnership Interest held by the General Partner, in
its capacity as general partner. A General Partner Interest may be expressed as a number of
Partnership Units.

     1.35 “Incapacity” or “Incapacitated” means:

     (a) as to any individual Partner, death, total physical disability or entry by a court of
competent jurisdiction adjudicating him incompetent to manage his person or his estate;

     (b) as to any corporation that is a Partner, the filing of a certificate of dissolution, or
its equivalent, for the corporation or the revocation of its charter;

     (c) as to any partnership that is a Partner, the dissolution and commencement of winding up of
the partnership;

     (d) as to any estate that is a Partner, the distribution by the fiduciary of the estate’s
entire interest in the Partnership;

     (e) as to any trustee of a trust that is a Partner, the termination of the trust (but not the
substitution of a new trustee); or

6

 

     (f) as to any Partner, the bankruptcy of such Partner, which shall be deemed to have occurred
when:

     (i) the Partner commences a voluntary proceeding seeking liquidation, reorganization or
other relief under any bankruptcy, insolvency or other similar law now or hereafter in
effect;

     (ii) the Partner is adjudged as bankrupt or insolvent, or a final and nonappealable
order for relief under any bankruptcy, insolvency or similar law now or hereafter in effect
has been entered against the Partner;

     (iii) the Partner executes and delivers a general assignment for the benefit of the
Partner’s creditors;

     (iv) the Partner files an answer or other pleading admitting or failing to contest the
material allegations of a petition filed against the Partner in any proceeding of the nature
described in clause (ii) above;

     (v) the Partner seeks, consents to or acquiesces in the appointment of a trustee,
receiver or liquidator for the Partner or for all or any substantial part of the Partner’s
assets;

     (vi) any proceeding seeking liquidation, reorganization or other relief of or against
such Partner under any bankruptcy, insolvency or other similar law now or hereafter in
effect has not been dismissed within one hundred twenty (120) days after the commencement
thereof;

     (vii) the appointment without the Partner’s consent or acquiescence of a trustee,
receiver or liquidator has not been vacated or stayed within ninety (90) days of such
appointment; or an appointment referred to in clause (vii) which has been stayed is not
vacated within ninety (90) days after the expiration of any such stay.

     1.36 “Indemnitee” means

     (a) any Person made a party to a proceeding by reason of its status as:

     (i) the General Partner,

     (ii) a Limited Partner,

     (iii) the Advisor,

     (iv) a director, trustee, manager, member or officer of the Partnership, the General
Partner or the Advisor, or

7

 

     (v) a director, trustee, manager, member or officer of any other Entity, serving in
such capacity at the request of the Partnership, the General Partner or the Advisor, acting
on behalf of the Partnership or the General Partner, or

     (b) such other Persons (including Affiliates of the General Partner) as the General Partner
may designate from time to time (whether before or after the event giving rise to potential
liability), in its sole and absolute discretion.

     1.37 “Initial Limited Partner” and “Landwin REIT” both mean Landwin REIT, Inc., a Maryland
corporation.

     1.38 “Invested Capital” means, with respect to the Landwin Partners, as of any relevant date,
an amount equal to the excess of (i) the aggregate amount of cash contributed or deemed contributed
by the Landwin Partners to the Partnership from the gross proceeds of the issuance by Landwin REIT
of REIT Stock or other equity Securities pursuant to Article IV hereof, over (ii) the sum of (A)
the cumulative distributions of Net Sales Proceeds made to the Landwin Partners pursuant to Section
5.1(c) as of such date, and (B) the cumulative amounts paid to the Landwin Partners in redemption
of its Partnership Units pursuant to Section 8.6(g) as of such date.

     1.39 “IRS” shall mean the Internal Revenue Service of the United States.

     1.40 “Landwin Partners” means the General Partner and Landwin REIT.

     1.41 “Lien” means any lien, security interest, mortgage, deed of trust, charge, claim,
encumbrance, pledge, option, right of first offer or first refusal and any other right or interest
of others of any kind or nature, actual or contingent, or other similar encumbrance of any nature
whatsoever.

     1.42 “Limited Partner” means, prior to the admission of the first Additional Limited Partner
to the Partnership, the Initial Limited Partner, and thereafter any Person named as a limited
partner of the Partnership in Exhibit A, as such Exhibit may be amended from time to time, upon the
execution and delivery by such Person of an additional limited partner signature page, including
any Additional Limited Partner or Substituted Limited Partner in each case, in such Person’s
capacity as a limited partner of the Partnership.

     1.43 “Limited Partner Interest” means a Partnership Interest of a Limited Partner in the
Partnership. A Limited Partner Interest may be expressed as a number of Partnership Units.

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

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

8

 

     1.46 “Listing Event” means the listing of the REIT Stock on a national securities exchange or
quotation of the REIT Stock on the National Market System of the Nasdaq Stock Market.

     1.47 “Listing Date” means the date on which a Listing Event occurs.

     1.48 “Market Value” means the market value of the REIT Stock as of the date of a Listing
Event, which shall be equal to the product of (a) the number of shares of REIT Stock issued and
outstanding at the time of the Listing Event, multiplied by (b) the average Listed Market Price (as
defined below) of a share of REIT Stock for the 30 trading days beginning on the 180th
day after the Listing Date. The “Listed Market Price” of a share of REIT Stock for each such
trading day shall be 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 on the national
securities exchange on which the REIT Stock is listed for trading, or, if the REIT Stock is not
listed for trading on a national securities exchange, as reported by the Nasdaq Stock Market.

     1.49 “Nasdaq Stock Market” means the National Market of the National Association of Securities
Dealers, Inc. Automated Quotation System.

     1.50 “NASAA Guidelines” means the North American Securities Administrators Association, Inc.
Statement of Policy Regarding Real Estate Investment Trusts.

     1.51 “Net Capital Event Proceeds” means, with respect to any Partnership Asset (or portion
thereof), the proceeds, if any, with respect to a Capital Transaction related to such Partnership
Asset, net of (a) any costs and expenses incurred in connection with such Capital Transaction, (b)
any of such proceeds which are used to repay indebtedness, (c) any insurance proceeds applied to
restoration, repair or rebuilding, and (d) any proceeds of business interruption insurance, and
after setting aside appropriate reserves, as determined by the General Partner in its sole and
absolute discretion.

     1.52 “Net Sales Proceeds” means any Net Capital Event Proceeds other than proceeds from any
transaction or event described under clause (b) of the definition herein of Capital Transaction;
provided, that the receipt by the Partnership of Capital Contributions shall not constitute Net
Sales Proceeds; and provided further that the proceeds of a Terminating Capital Transaction shall
not constitute Net Sales Proceeds.

     1.53 “Nonrecourse Deductions” has the meaning set forth in Sections 1.704-2(b)(1) and
1.704-2(c) of the Treasury Regulations.

     1.54 “Nonrecourse Liabilities” has the meaning set forth in Section 1.704-2(b)(3) of the
Treasury Regulations.

     1.55 “Notice of Redemption Request” means a notice of redemption request substantially in the
form of Exhibit B attached hereto.

9

 

     1.56 “Outside Limited Partners” means the Limited Partners, excluding the Initial Limited
Partner, the Advisor and any Limited Partner that is an Affiliate of the General Partner or the
Initial Limited Partner or the Advisor.

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

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

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

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

     1.61 “Partnership” means Landwin, L.P., and any successor thereto.

     1.62 “Partnership Asset” means the interest of the Partnership in any Entity or security
(whether in corporate securities, equity, debt or hybrid securities, partnership or joint venture
interests, other contractual rights or otherwise), or any other Real Estate Assets or other assets
owned, directly or indirectly, by the Partnership, as determined by the General Partner.

     1.63 “Partnership Interest” means the entire ownership interest of a Partner in the
Partnership at any particular time which represents a Capital Contribution by such Partner and
which includes the right of such Partner to any and all benefits to which such Partner may be
entitled as provided in this Agreement, together with the obligations of such Partner to comply
with all terms and provisions of this Agreement. A Partnership Interest may be expressed as a
number of Partnership Units.

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

     1.65 “Partnership Record Date” means the record date established by the General Partner for
the distribution by the Partnership of Available Operating Cash, Net Capital Event Proceeds or
other Partnership Assets pursuant to Section 5.1 hereof, which record date shall be the same as the
record date established by the General Partner for a distribution to its stockholders of some or
all of its portion of such distribution by the Partnership.

10

 

     1.66 “Partnership Unit” means a unit of Partnership Interest with the rights, powers and
duties set forth herein, designated as such on Exhibit A and expressed in the number set forth on
Exhibit A, as such exhibit may be amended from time to time.

     1.67 “Percentage Interest” means, as to each Partner, the percentage determined by dividing
the total number of Partnership Units owned by such Partner by the aggregate number of Partnership
Units then issued and outstanding, as set forth on Exhibit A, as such exhibit may be amended from
time to time.

     1.68 “Permitted Transferee” means with respect to a Person, (a) any Affiliate of such Person,
(b) the spouse of such Person or any ancestor, descendent or sibling of such Person or of the
spouse of such Person, or (c) any trust for the benefit of such Person or any other person
described in clause (b) of this Section 1.70.

     1.69 “Person” means any individual or Entity, and the heirs, executors, administrators, legal
representatives, successors and assigns of such individual or Entity where the context so permits.

     1.70 “Profits” and “Losses” means, for each Fiscal Year or other period for which allocations
to Partners are made, an amount equal to the Partnership’s taxable income or loss for such period
determined in accordance with Federal income tax principles, with the following adjustments:

     (a) any income of the Partnership that is exempt from Federal income tax and not otherwise
taken into account in computing Profits or Losses pursuant to this provision shall be added to such
taxable income or loss;

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

     (c) in the event the Carrying Value of any Partnership asset is adjusted pursuant to this
Agreement, the amount of such adjustment shall be taken into account as gain or loss from the
disposition of such asset for purposes of computing Profits or Losses, and shall be allocated in
accordance with the provisions of Article 6;

     (d) Book Gain or Book Loss from a Capital Transaction shall be taken into account in lieu of
any tax gain or tax loss recognized by the Partnership by reason of such Capital Transaction;

     (e) in lieu of the depreciation, amortization, and other cost recovery deductions taken into
account in computing such taxable income or loss, there shall be taken into account Depreciation
for such Fiscal Year or other period, computed as provided in this Agreement;

11

 

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

     (g) any items which are specially allocated pursuant to Section 6.2 shall not be taken into
account in computing Profits or Losses.

     If the Partnership’s taxable income or loss for such Fiscal Year or other period, as adjusted
in the manner provided above, is a positive amount, such amount shall be the Partnership’s Profits
for such Fiscal Year or other period; and if a negative amount, such amount shall be the
Partnership’s Losses for such Fiscal Year or other period.

     1.71 “Prohibited Transferee” means any Person who is a:

     (a) person or entity who is a “designated national,” “specially designated national,”
“specially designated terrorist,” “specially designated global terrorist,” “foreign terrorist
organization,” or “blocked person” within the definitions set forth in the Foreign Assets Control
Regulations of the United States Treasury Department, 31 C.F.R., Subtitle B, Chapter V, as amended;

     (b) person acting on behalf of, or an entity owned or controlled by, any government against
whom the United States maintains economic sanctions or embargoes under the Regulations of the
United States Treasury Department, 31 C.F.R., Subtitle B, Chapter V, as amended, including, but not
limited to, the “Government of Sudan,” the “Government of Iran,” the “Government of Libya,” and the
“Government of Iraq;” or

     (c) person or entity subject to additional restrictions imposed by the following statutes or
Regulations and Executive Orders issued thereunder: the Trading with the Enemy Act, 50 U.S.C. app.
§§1 et. seq., the Iraq Sanctions Act, Pub. L. 101-513, Title V, §§ 586 to 586J, 104 Stat.
2047, the National Emergencies Act, 50 U.S.C. §§ 1601 et. seq., the Antiterrorism and Effective
Death Penalty Act of 1996, Pub. L. 104-132, 110 Stat. 1214-1319, the International Emergency
Economic Powers Act, 50 U.S.C. §§ 1701 et seq., the United Nations Participation Act, 22 U.S.C. §
287c, the International Security and Development Cooperation Act, 22 U.S.C. § 2349aa-9, the
Nuclear Proliferation Prevention Act of 1994, Pub. L. 103-236, 108 Stat. 507, the Foreign
Narcotics Kingpin Designation Act, 21 U.S.C. §§ 1901 et. seq., the Iran and Libya

     Sanctions Act of 1996, Pub. L. 104-172, 110 Stat. 1541, the Cuban Democracy Act, 22 U.S.C.
§§ 6001 et seq., the Cuban Liberty and Democratic Solidarity Act, 22 U.S.C. §§ 6021-

12

 

91, and the Foreign Operations, Export Financing and Related Programs Appropriations Act,
1997, Pub. L. 104-208, 110 Stat. 3009-172, or any other law of similar import as to any non-U.S.
country, as each such Act or law has been or may be amended, adjusted, modified, or reviewed from
time to time.

     1.72 “Real Estate Assets” means unimproved and improved real property, real estate-related
assets and any direct or indirect interest therein (including, without limitation, fee or leasehold
interests, options, leases, partnership and joint venture interests, equity and debt securities of
entities that own real estate, first or second mortgages on real property, mezzanine loans secured
by junior liens on real property, preferred equity interests secured by a property owner’s interest
in real property and other contractual rights in real estate).

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

     1.74 “Redemption Amount” means either the Cash Amount or the REIT Stock Amount, as determined
by the General Partner or Landwin REIT in its sole and absolute discretion.

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

     1.76 “Registration Statement” means the Registration Statement on Form S-11 to be filed by
Landwin REIT with the Securities and Exchange Commission, and any amendments thereto made at any
time.

     1.77 “REIT” means a “real estate investment trust” as defined under Section 856 of the Code.

     1.78 “REIT Notice” has the meaning set forth in Section 8.6(g).

     1.79 “REIT Requirements” has the meaning set forth in Section 5.2.

     1.80 “REIT Stock” means the Common Stock and all other shares of capital stock of Landwin
REIT.

     1.81 “REIT Stock Amount” means a number of shares of REIT Stock equal to the number of
Partnership Units offered for redemption by a Redeeming Partner; provided that in the event that
Landwin REIT issues to all holders of REIT Stock rights, options, warrants, or convertible or
exchangeable securities entitling stockholders of Landwin REIT to acquire REIT Stock, or any other
securities or property (collectively, the “rights”), then the REIT Stock Amount shall also include
such rights that a holder of that number of shares of REIT Stock would be entitled to receive.

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

13

 

     1.83 “Specified Redemption Date” means the tenth (10th) Business Day after receipt
by the General Partner of a Notice of Redemption Request (or, in the case of Landwin REIT
exercising the Redemption Right, after the date of Landwin REIT’s receipt of a REIT Notice).

     1.84 “Stock Option Plans” means, collectively, any and all plans adopted from time to time by
Landwin REIT pursuant to which REIT Stock is issued, or options to acquire REIT Stock are granted,
to employees or directors of Landwin REIT, employees of the Partnership or employees of their
respective Affiliates in consideration for services or future services.

     1.85 “Subsidiary” means, with respect to any Person, any Entity of which a majority of the
voting power or the voting equity securities, and/or the outstanding equity interests (whether or
not voting), is owned, directly or indirectly, by such Person.

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

     1.87 “Terminating Capital Transaction” means any sale or other disposition (other than a
deemed disposition pursuant to Code Section 708(b)(1)(B) and the Treasury Regulations thereunder)
of all or substantially all of the assets of the Partnership or a related series of transactions
that, taken together, result in the sale or other disposition of all or substantially all of the
assets of the Partnership.

     1.88 “Transfer” means to give, sell, assign, pledge, hypothecate, devise, bequeath, or
otherwise dispose of, transfer, or permit to be transferred, during life or at death. The word
“Transfer,” when used as a noun, shall mean any Transfer transaction.

     1.89 “Treasury Regulations” means the Federal income tax regulations, including any temporary
or proposed regulations, promulgated under the Code, as such Treasury Regulations may be amended
from time to time (it being understood that all references herein to specific sections of the
Treasury Regulations shall be deemed also to refer to any corresponding provisions of succeeding
Treasury Regulations).

     1.90 “Unrecovered Contribution Account” means, with respect to the Landwin Partners, as of any
relevant date, the excess of (i) the aggregate amount of cash contributed or deemed contributed by
the Landwin Partners to the Partnership pursuant to the provisions of Article IV as of such date,
over (ii) the sum of (A) the cumulative distributions of Available Cash and Net Capital Event
Proceeds made to the Landwin Partners prior to such relevant date pursuant to Section 5.1 hereof,
and (B) the cumulative amounts paid to the Landwin Partners in redemption of its Partnership Units
pursuant to Section 8.6(g) as of such date. All amounts distributed and paid to the Landwin
Partners pursuant to Sections 5.1 and 8.6(g) shall first be applied to reduce the Unrecovered
Contribution Account of the Landwin Partners until the balance of such Unrecovered Contribution
Account equals zero ($0), and then shall be applied to reduce the 6% Return Account of the Landwin
Partners.

14

 

     1.91 “Valuation Date” means the date of receipt by the General Partner of a Notice of
Redemption Request (or, in the case of Landwin REIT exercising the Redemption Right, the date of
Landwin REIT’s receipt of a REIT Notice) or, if such date is not a Business Day, the first Business
Day thereafter.

     1.92 “Value” means, with respect to a share of REIT Stock, (a) if REIT Stock is traded on a
national securities exchange, reported through the Nasdaq Stock Market or otherwise traded
over-the-counter, the average of the daily Market Price (as defined below) for shares of REIT Stock
for the ten (10) consecutive trading days immediately preceding the Valuation Date, or (b) if REIT
Stock is not traded in a manner described in clause (a), the value of a share of REIT Stock as
determined by the General Partner acting in good faith on the basis of such quotations and other
information as it considers, in its reasonable judgment, appropriate. The “Market Price” for each
such trading day shall be (i) 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 Landwin REIT; or (ii) if 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 Landwin REIT, or (iii) 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 (10) days prior to the date in question) for
which prices have been so reported. In the event the REIT Stock Amount includes rights that a
holder of REIT Stock would be entitled to receive, then the Value of such rights shall be
determined by the General Partner acting in good faith on the basis of such quotations and other
information as it considers, in its reasonable judgment, appropriate.

ARTICLE II

ORGANIZATIONAL MATTERS

     2.1 Formation

     The Partnership is a limited partnership organized pursuant to the provision of the Act and
upon the terms and conditions set forth in this Agreement. Except as expressly provided herein to
the contrary, the rights and obligations of the Partners and the administration and termination of
the Partnership shall be governed by the Act.

     2.2 Name

     The name of the Partnership is Landwin, L.P. The Partnership’s business may be conducted
under such name or under any other name or names deemed advisable by the General Partner, including
the name of the General Partner or any Affiliate thereof. The words “Limited Partnership,” “L.P.,”
“Ltd.” or similar words or letters shall be included in the Partnership’s name where necessary for
the purposes of complying with the laws of any jurisdiction that so requires. The General Partner,
acting in its sole and absolute discretion without the Consent of any Limited Partner, may change
the name of the Partnership. The General Partner shall notify

15

 

the Limited Partners of any such name change in the next regular communication to the Limited
Partners. Upon termination of the Partnership or the termination, resignation or withdrawal of the
Initial Limited Partner as the Advisor, all of the Partnership’s right, title and interest in and
to the use of the name “Landwin, L.P.” and any variation thereof, shall become the property of the
Initial Limited Partner, and if requested to do so by the Initial Limited Partner, the Partnership
shall change the name of the Partnership to exclude the term “Landwin.” Neither the Partnership
nor any Limited Partner shall have any right or interest in and to the use of any such name or
mark.

     2.3 Registered Office and Agent

     The address of the registered office of the Partnership in the State of Delaware is 1209
Orange Street, City of Wilmington, County of New Castle, Delaware 19801, or such other place as may
be designated from time to time by the General Partner. The name of the registered agent for
service of process on the Partnership in the State of Delaware at such address shall be The
Corporation Trust Company, or such other Person as may be designated from time to time by the
General Partner.

     2.4 Principal Place of Business

     The Partnership may maintain offices at such other place or places within or outside the State
of Delaware as the General Partner deems advisable. The principal office of the Partnership shall
be 17200 Ventura Blvd., Suite 206, Encino, California 91316 or such other place as the General
Partner may from time to time designate by notice to the Limited Partners.

     2.5 Term and Termination

     The term of the Partnership shall commence on the date hereof and shall continue until
December 31, 2035, unless the Partnership is dissolved sooner pursuant to the provisions of Article
13 or as otherwise provided by law.

     2.6 Power of Attorney

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

     (i) execute, swear to, acknowledge, deliver, file and record in the appropriate public
offices:

16

 

     (A) all certificates, documents and other instruments (including, without
limitation, this Agreement and the Certificate and all amendments or restatements
thereof) that the General Partner or the Liquidator deems appropriate or necessary
to form, qualify or continue the existence or qualification of the Partnership as a
limited partnership (or a partnership in which the Limited Partners have limited
liability) in the State of Delaware and in all other jurisdictions in which the
Partnership may or plans to conduct business or own property, including, without
limitation, any documents necessary or advisable to convey any Contributed Property
to the Partnership;

     (B) all instruments that the General Partner or any Liquidator deems
appropriate or necessary to reflect any amendment, change, modification or
restatement of this Agreement in accordance with its terms;

     (C) all conveyances and other instruments or documents that the General Partner
or any Liquidator deems appropriate or necessary to reflect the dissolution and
liquidation of the Partnership pursuant to the terms of this Agreement, including,
without limitation, a certificate of cancellation;

     (D) all instruments relating to the admission, withdrawal, removal or
substitution of any Partner pursuant to, or other events described in, Article 11,
12 or 13 hereof or any Capital Contribution of any Partner;

     (E) all certificates, documents and other instruments relating to the
determination of the rights, preferences and privileges of Partnership Interests;

     (F) all amendments to this Agreement as provided in Article 14 hereof; and

     (G) all other instruments that may be required by law to be filed on behalf of
or relating to the Partnership and that are not inconsistent with this Agreement;
and

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

     Nothing contained herein shall be construed as authorizing the General Partner or any
Liquidator to amend this Agreement except in accordance with Article 14 hereof or as may be
otherwise expressly provided for in this Agreement.

17

 

     (b) The foregoing power of attorney is hereby declared to be irrevocable and a power coupled
with an interest, in recognition of the fact that each of the Partners will be relying upon the
power of the General Partner and any Liquidator to act as contemplated by this Agreement in any
filing or other action by it on behalf of the Partnership, and it shall survive and not be affected
by the subsequent Incapacity of any Limited Partner or Assignee and/or the Transfer of all or any
portion of such Limited Partner’s or Assignee’s Partnership Units and shall extend to such Limited
Partner’s or Assignee’s heirs, successors, assigns and personal representatives.

     (c) Each such Limited Partner or Assignee hereby agrees to be bound by any representation made
by the General Partner or any Liquidator, acting in good faith pursuant to such power of attorney,
and each such Limited Partner or Assignee hereby waives any and all defenses which may be available
to contest, negate or disaffirm the action of the General Partner or any Liquidator, taken in good
faith under such power of attorney.

     (d) Each Limited Partner or Assignee shall execute and deliver to the General Partner or the
Liquidator, within fifteen (15) days after receipt of the General Partner’s or Liquidator’s request
therefor, such further designation, powers of attorney and other instruments as the General Partner
or the Liquidator, as the case may be, deems necessary to effectuate this Agreement and the
purposes of the Partnership.

     (e) Any Person dealing with the Partnership may conclusively presume and rely upon the fact
that any instrument referred to in this Section 2.6, executed by the General Partner or the
Liquidator acting as attorney-in-fact, is authorized by and binding on the Partnership, without
further inquiry.

     2.7 Effectiveness of this Agreement

     This Agreement shall govern the operations of the Partnership and the rights and restrictions
applicable to the Partners, to the extent permitted by law. Pursuant to Section 17-101(12) of the
Act, all Persons who become holders of Partnership Interests shall be bound by the provisions of
this Agreement. The execution by a Person of this Agreement and acceptance thereof by the General
Partner in accordance with the terms of this Agreement or the receipt of Partnership Interests by a
Person as a successor or assign of an existing Partner and the consent of the General Partner to
the admission of such Person as a Substituted Limited Partner in accordance with the terms of this
Agreement shall be deemed to constitute a request that the records of the Partnership reflect such
admission, and shall be deemed to be a sufficient act to comply with the requirements of Section
17-101(12) of the Act and to so cause that Person to become a Partner as of the date of acceptance
of its Capital Contribution by the Partnership and to bind that Person to the terms and conditions
of this Agreement (and to entitle that Person to the rights of a Partner hereunder).

ARTICLE III

PURPOSE AND POWERS

18

 

     3.1 Purpose and Business

     The purpose and nature of the business to be conducted by the Partnership is to conduct any
business that may be lawfully conducted by a limited partnership organized pursuant to the Act
including, without limitation, to engage in the following activities:

     (a) to acquire, hold, own, develop, construct, improve, maintain, operate, sell, lease,
transfer, encumber, convey, exchange and otherwise dispose of or deal with Real Estate Assets;

     (b) to acquire, hold, own, develop, construct, maintain, operate, sell, lease, transfer,
encumber, convey, exchange and otherwise dispose of or deal with other real and personal property
of all kinds;

     (c) acquire own, hold for investment and ultimately dispose of general and limited partner
interests, and stock, warrants, options or other equity and debt interests in Entities, and
exercise all rights and powers granted to the owner of any such interests;

     (d) make any type of investment and engage in any other lawful act or activity for which
limited partnerships may be formed under the Act, and by such statement all lawful acts and
activities shall be within the purposes of the Partnership;

     (e) to undertake such other activities as may be necessary, advisable, desirable or convenient
to the business of the Partnership; and

     (f) to engage in such other ancillary activities as shall be necessary or desirable to
effectuate the foregoing purposes;

provided, however, that such business shall be limited to and conducted in such a manner as to
permit Landwin REIT at all times to be classified as a REIT, unless Landwin REIT determines not to
qualify as a REIT or ceases to qualify as a REIT for reasons other than the conduct of the business
of the Partnership. In furtherance thereof, unless Landwin REIT determines not to qualify as a
REIT or ceases to qualify as a REIT for reasons other than the conduct of the business of the
Partnership, the Partnership shall not take, or refrain from taking, any action which in the
judgment of Landwin REIT, in its sole and absolute discretion, (i) could adversely affect the
ability of Landwin REIT to achieve or maintain qualification as a REIT or (ii) could subject
Landwin REIT to any additional taxes under Section 857 or Section 4981 of the Code.

     3.2 Powers 

     (a) The Partnership is empowered to do any and all acts and things necessary, appropriate,
proper, advisable, incidental to or convenient for the furtherance and accomplishment of the
purposes and business described in Section 3.1 and for the protection and benefit of the
Partnership including, without limitation, full power and authority to enter into, perform, and
carry out contracts of any kind, to borrow money and to issue evidences of

19

 

indebtedness, whether or not secured by mortgage, trust deed, pledge or other Lien, and,
directly or indirectly, to acquire, hold, own, develop, construct, improve, maintain and operate
Real Estate Assets, and to sell, lease, transfer, encumber, convey, exchange and otherwise dispose
of Real Estate Assets.

     (b) The General Partner also is empowered to do any and all acts and things necessary,
appropriate or advisable to ensure that the Partnership will not be classified as a “publicly
traded partnership” within the meaning of Section 7704 of the Code, including, but not limited to,
imposing restrictions on Transfers of Partnership Units.

ARTICLE IV

CAPITAL CONTRIBUTIONS; PARTNERSHIP UNITS; ADDITIONAL FUNDS

     4.1 Capital Contributions of the Partners

     (a) Initial Capital Contributions. The General Partner, the Initial Limited Partner and the
Advisor have made or shall make on the Effective Date, the Capital Contributions as set forth on
Exhibit A to this Agreement in exchange for the number of Partnership Units set forth opposite
their names on Exhibit A. At such time as Additional Limited Partners are admitted to the
Partnership, each such Additional Limited Partner shall make Capital Contributions in the amount
set forth opposite such Limited Partner’s name on Exhibit A, as it shall be amended at the time of
such contribution.

     (b) Deemed Capital Contributions. To the extent the Partnership acquires any property by the
merger of any other Person into the Partnership or the contribution of assets by any other Person
to the Partnership, Persons who receive Partnership Interests in exchange for their interests in
the Person merging into or contributing assets to the Partnership shall become Partners and shall
be deemed to have made Capital Contributions as provided in the applicable merger agreement or
contribution agreement and as set forth in Exhibit A, as it shall be amended to reflect such deemed
Capital Contributions.

     (c) Partnership Units. Each Partner shall own Partnership Units in the amounts set forth for
such Partner in Exhibit A and shall have a Percentage Interest in the Partnership as set forth in
Exhibit A, which Percentage Interest shall be adjusted in Exhibit A from time to time by the
General Partner to the extent necessary to reflect accurately redemptions, additional Capital
Contributions, the issuance of additional Partnership Units or similar events having an effect on
the number of Partnership Units held by, and the Percentage Interest of, any Partner. Each
Partnership Unit shall entitle the holder thereof to one vote on all matters on which the Partners
(or any portion of the Partners) are entitled to vote under this Agreement.

     (d) No Additional Capital Contributions. Except as provided in Sections 4.3(a) and 10.5, the
Partners shall have no obligation to make any additional Capital Contributions or provide any
additional funding to the Partnership (whether in the form of loans or otherwise) and

20

 

no Partner shall have any obligation to restore any deficit that may exist in its Capital
Account, either upon a liquidation of the Partnership or otherwise.

     4.2 Issuance of Additional Partnership Interests

     (a) The General Partner is authorized to cause the Partnership to issue additional Partnership
Interests (or options or warrants to acquire Partnership Interests) in the form of Partnership
Units or other Partnership Interests in one or more series or classes to any Persons at any time or
from time to time, on such terms and conditions as the General Partner shall establish in each case
in its sole and absolute discretion subject to Delaware law, including, without limitation, (i) the
allocations of items of Partnership income, gain, loss, deduction and credit to each class or
series of Partnership Interests, (ii) the right of each class or series of Partnership Interests to
share in Partnership distributions, and (iii) the rights of each class or series of Partnership
Interest upon dissolution and liquidation of the Partnership; provided, that, no such Partnership
Interests shall be issued to the General Partner unless either (A) the Partnership Interests are
issued pursuant to Section 4.3, or (B) the additional Partnership Interests are issued to all
Partners holding Partnership Interests in the same class in proportion to their respective
Percentage Interests in such class.

     (b) Subject to the limitations set forth in Sections 4.2(a) and 4.3(a), the General Partner
may take such steps as it, in its sole and absolute discretion, deems necessary or appropriate to
admit any Person as a Limited Partner of the Partnership in accordance with Section 12.2 or to
issue any Partnership Interests, including, without limitation, amending the Certificate, Exhibit A
or any other provision of this Agreement.

     (c) Without limiting the foregoing, the General Partner is expressly authorized to cause the
Partnership to issue Partnership Interests (or options to acquire Partnership Interests) for less
than fair market value, so long as the General Partner concludes in good faith that such issuance
is in the interest of the Partnership and the Partners (for example, and not by way of limitation,
the issuance of Partnership Units in connection with a Stock Option Plan providing for employee
purchases of REIT Stock and corresponding Partnership Units at a discount from fair market value or
employee options that have an exercise price that is less than the fair market value of the REIT
Stock and corresponding Partnership Units covered by the option, either at the time of issuance or
at the time of exercise).

     4.3 Issuance of Securities by Landwin REIT

     (a) General. Landwin REIT shall not issue any debt securities, preferred stock, Common Stock,
any other class of REIT Stock or rights, options, warrants or other securities convertible into or
exchangeable for preferred stock, Common Stock or any other class of REIT Stock (collectively,
“Securities”), other than (1) as payment of the REIT Stock Amount in connection with a redemption
of Partnership Units pursuant to Section 8.6, (2) upon the conversion, exchange or exercise of
other outstanding securities of Landwin REIT in accordance

21

 

with the terms of such securities, or (3) to all holders of REIT Stock on a pro rata basis,
unless Landwin REIT shall:

     (i) in the case of REIT Stock or other equity Securities other than Securities
described in clause (ii) below, (A) contribute to the Partnership the proceeds of or
consideration (including any property or other non-cash assets) received upon the issuance
of such Securities, and (B) receive from the Partnership in consideration for such
contributions Partnership Interests with the same terms and conditions, including dividend,
dividend priority and liquidation preference, as are applicable to such Securities
(including, for purposes of clarification, Partnership Units in the case of any issuance of
Common Stock by Landwin REIT);

     (ii) in the case of options, warrants or other rights to purchase REIT Stock, or other
equity securities convertible into or exchangeable for REIT Stock, (A) contribute to the
Partnership the proceeds of or consideration (including any property or other non-cash
assets) received upon the issuance of such equity Securities, and (B) receive from the
Partnership in consideration for such contributions a number of options, warrants or other
rights to purchase Partnership Interests equal to the number of such Securities issued by
Landwin REIT, with equivalent rights, preferences and limitations to the terms of such
equity Securities; and

     (iii) in the case of debt securities, lend to the Partnership the proceeds of or
consideration received for such Securities on the same terms and conditions, including
interest rate and repayment schedule, as shall be applicable with respect to or incurred in
connection with the issuance of such Securities and the proceeds of, or consideration
received from, any subsequent exercise, exchange or conversion thereof (if applicable).

     (b) Splits. The Partnership shall (i) make a distribution in Partnership Units, (ii)
subdivide its outstanding Partnership Units, or (iii) combine its outstanding Partnership Units
into a smaller number of Partnership Units, in the event Landwin REIT takes an analogous action
with respect to the Common Stock. The intent of the previous sentence is that one Partnership Unit
remains the economic equivalent of one share of Common Stock without dilution. If the General
Partner or Landwin REIT determines that it is necessary or desirable to make any filings under the
Act or otherwise in order to reference the existence of such action, the General Partner or Landwin
REIT may cause such filings to be made, which filings might take the form of amendments to the
Certificate; provided, however, that, unless specifically required by this Agreement or the Act
after giving effect to the terms of this Agreement, no approval or consent of any Partners shall be
required in connection with the making of any such filing.

     (c) Treatment of Proceeds. If the proceeds actually received by Landwin REIT in connection
with an issuance of Securities by Landwin REIT are less than the gross proceeds of such offering,
grant, award or issuance as a result of any underwriter’s discounts, commissions or other fees or
expenses paid or incurred in connection with such offering, grant, award or

22

 

issuance, then Landwin REIT shall be deemed to have made a Capital Contribution to the
Partnership in the amount of the gross proceeds of such offering, grant, award or issuance and the
Partnership shall be deemed simultaneously to have paid pursuant to Section 7.3(c) for the amount
of such expenses.

     4.4 Additional Funds

     (a) The sums of money required to finance the business and affairs of the Partnership shall be
derived from the initial Capital Contributions made to the Partnership by the Partners as set forth
in Section 4.1 and from funds generated from the operation and business of the Partnership.

     (b) In the event additional financing is needed from sources other than as set forth in
Section 4.4(a) for any reason, the General Partner may, in its sole and absolute discretion, in
such amounts and at such times as it solely shall determine to be necessary or appropriate:

     (i) cause the Partnership to issue additional Partnership Interests and admit
additional Limited Partners to the Partnership in accordance with Section 4.2;

     (ii) make additional Capital Contributions to the Partnership (subject to the
provisions of Section 4.3(a));

     (iii) cause the Partnership to borrow money, enter into loan arrangements, issue debt
securities, obtain letters of credit or otherwise borrow money on a secured or unsecured
basis;

     (iv) make a loan or loans to the Partnership (subject to Section 4.3(a)); or

     (v) cause the Partnership to sell any assets or properties directly or indirectly owned
by the Partnership.

     4.5 No Third-Party Beneficiary

     No creditor or other third party having dealings with the Partnership shall have the right to
enforce the right or obligations 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.

     4.6 No Interest

     No Partner shall be entitled to interest on any Capital Contribution or on such Partner’s
Capital Account.

23

 

     4.7 No Preemptive Rights

     Subject to any preemptive rights that may be granted in connection with the issuance of
Partnership Interests under Section 4.3(a), no Person shall have any preemptive or other similar
right with respect to any:

     (a) additional Capital Contributions or loans to the Partnership; or

     (b) issuance or sale of any Partnership Units or other Partnership Interests.

     4.8 Capital Accounts; Adjustments to Carrying Values

     (a) Capital Accounts. The Partnership shall establish and maintain throughout the life of the
Partnership for each Partner a separate “Capital Account” in accordance with Treasury Regulations
Section 1.704-1(b). Such Capital Account shall be increased by (i) the amount of all Capital
Contributions made by such Partner to the Partnership pursuant to this Agreement and (ii) all
Profits and other items of income and gain specially allocated to such Partner pursuant to Section
6.2, and decreased by (1) the amount of cash or Agreed Value of all actual and deemed distributions
of cash or property made to such Partner pursuant to this Agreement and (2) all Losses and other
items of loss and deduction specially allocated to such Partner pursuant to Section 6.2 of this
Agreement. Any other Partnership item which is required or authorized under Treasury Regulation
Section 1.704-1(b) to be reflected in Capital Accounts shall be so reflected.

     (b) Adjustments to Carrying Values. Consistent with the provisions of Treasury Regulations
Section 1.704-1(b)(2)(iv)(f), and as provided in this Section 4.8(b), the Carrying Values of all
Partnership Assets shall be adjusted upward or downward to reflect any Book Gains or Book Losses
attributable to such Partnership Asset, as of the times of the adjustments provided in this Section
4.8(b), as if such Book Gain or Book Loss had been recognized on an actual sale of each such
Partnership Asset and allocated pursuant to Section 6.1. Such adjustments shall be made as of the
following times: (i) as of the end of the calendar quarter immediately prior to the acquisition of
an additional interest in the Partnership by any new or existing Partner in exchange for more than
a de minimis Capital Contribution or in exchange for services performed to or for the benefit of
the Partnership; (ii) as of the end of the calendar quarter immediately prior to the distribution
by the Partnership to a Partner of more than a de minimis amount of property as consideration for
an interest in the Partnership; (iii) upon the occurrence of a Listing Event if the Advisor is
entitled to a distribution under Section 5.1(d) as a result of such event, and (iv) at such other
times as the General Partner may determine so long as such adjustment is made under generally
accepted industry accounting practices within the meaning of Treasury Regulations Section
1.704-1(b)(2)(iv)(f)(5). In accordance with Treasury Regulations Section 1.704-1(b)(2)(iv)(e), the
Carrying Values of Partnership assets distributed in kind shall be adjusted upward or downward to
reflect any Book Gain or Book Loss attributable to such Partnership Asset, as of the time any such
asset is distributed. If the Carrying Values of the Partnership Assets are adjusted as a result of
a Listing Event, the total Carrying Value of all

24

 

Partnership Assets shall be deemed to equal the Market Value plus the total amount of
liabilities of the Partnership as of the date of the Listing Event.

ARTICLE V

DISTRIBUTIONS

     5.1 Distributions

     (a) General. Subject to the provisions of Sections 5.3, 5.4, 8.6(b), 11.6(d) and 13.2, the
General Partner shall cause the Partnership to distribute to the Partners as of the applicable
Partnership Record Date, at such times as the General Partner shall determine, amounts of Available
Operating Cash, Net Sales Proceeds and Net Capital Event Proceeds in the manner set forth in this
Section 5.1.

     (b) Available Operating Cash. Available Operating Cash shall be distributed to the Partners
as determined by the General Partner in its sole and absolute discretion in accordance with their
respective Percentage Interests as of the applicable Partnership Record Date.

     (c) Net Sales Proceeds and Net Capital Event Proceeds. Net Sales Proceeds shall be
distributed to the Partners as determined by the General Partner in its sole and absolute
discretion in accordance with their respective Percentage Interests as of the applicable
Partnership Record Date until the Unrecovered Contribution Account and 6% Return Account of the
Landwin Partners has been reduced to zero ($0). Thereafter, provided that the Advisory Agreement
has not been terminated, 15% of any Net Sales Proceeds shall be distributed to the Advisor (such
distributions, the “Advisor Participation in Sales Proceeds”), and 85% of such Net Sales Proceeds
shall be distributed to the Partners as determined by the General Partner in its sole and absolute
discretion in accordance with their respective Percentage Interests as of the applicable
Partnership Record Date. In the event that the Advisory Agreement has been terminated, the Net
Sales Proceeds described in the prior sentence shall be distributed to the Partners as determined
by the General Partner in its sole and absolute discretion in accordance with their respective
Percentage Interests as of the applicable Partnership Record Date. Any Net Capital Event Proceeds
in excess of Net Sales Proceeds shall be distributed to the Partners as determined by the General
Partner in its sole and absolute discretion in accordance with their respective Percentage
Interests as of the applicable Partnership Record Date.

     (d) Distribution to Advisor Upon Listing. Upon a Listing Event, the Advisor shall no longer
be entitled to any distributions of the Advisor Participation in Sales Proceeds under Section
5.1(c). If the Advisor has not been terminated under the Advisory Agreement as of the Listing
Date, the Advisor shall receive a distribution, which shall be paid within five (5) Business Days
of the determination of the Market Value, in an amount equal to 10% of the amount, if any, by which
(i) the Market Value plus the cumulative distributions made to the Landwin Partners from the
inception of the Partnership through the Listing Date exceeds (ii) the sum of (A) the Invested
Capital of the Landwin Partners as of the Listing Date, and (B) the 6%

25

 

Return that has accrued with respect to the Invested Capital of the Landwin Partners from the
inception of the Partnership through the Listing Date.

     5.2 Qualification as a REIT

     The General Partner shall take such action as it deems necessary or advisable to cause the
Partnership to distribute sufficient amounts under this Article 5 to enable Landwin REIT to pay
stockholder dividends that will enable Landwin REIT to (a) satisfy the requirements for
qualification as a REIT under the Code and the Treasury Regulations (the “REIT Requirements”), and
(b) avoid any Federal income or excise tax liability; provided, however, the General Partner shall
not be bound to comply with this covenant to the extent such distributions would violate applicable
Delaware law.

     5.3 Withholding

     With respect to any withholding tax or other similar tax liability or obligation to which the
Partnership may be subject as a result of any act by or status of any Partner or to which the
Partnership becomes subject with respect to any Partnership Interest, the Partnership shall have
the right to withhold amounts of Available Operating Cash, Net Capital Event Proceeds or other
Partnership Assets distributable to such Partner or with respect to such Partnership Interests, to
the extent of the amount of such withholding tax or other similar tax liability or obligation
pursuant to the provisions contained in Section 10.5.

     5.4 Additional Partnership Interests

     If the Partnership issues Partnership Interests in accordance with Section 4.2 or 4.3, the
distribution priorities set forth in Section 5.1 shall be amended, as necessary, to reflect any
distribution priority of such Partnership Interests and corresponding amendments shall be made to
the provisions of Article 6. 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,
such Partner shall not be entitled to any distributions with respect to such additional Partnership
Interest until the first Partnership Record Date following the date of such issuance.

ARTICLE VI

ALLOCATIONS

     6.1 Allocation of Profits and Net Losses

     (a) General. Except as otherwise provided in this Article 6 and in Section 11.6(c), and after
making any special allocations under Section 6.2, Profits and Losses for each Fiscal Year shall be
allocated among the Partners in accordance with their respective Percentage Interests as of the end
of such Fiscal Year, subject to any rights of holders of Partnership Interests other than
Partnership Units.

26

 

     (b) Adjustment. If the amount of Losses for any Fiscal Year that otherwise would be allocated
to a Partner under Section 6.1(a) or this Section 6.1(b) would cause or increase an Adjusted
Capital Account Deficit of such Partner as of the last day of such Fiscal Year (after all other
allocations have been made pursuant to this Article 6), then such Partner shall be allocated that
amount of Losses which does not cause or increase such Adjusted Capital Account Deficit, and the
remainder of such Losses that would have been allocated to such Partner shall be allocated to the
other Partners in proportion to their Percentage Interests.

     6.2 Special Allocations

     Notwithstanding any provisions of Section 6.1, the following special allocations shall be made
in the following order of priority:

     (a) Minimum Gain Chargeback (Nonrecourse Liabilities). Except as otherwise provided in
Section 1.704-2(f) of the Treasury Regulations, if there is a net decrease in Partnership Minimum
Gain for any Fiscal Year, each Partner shall be specially allocated items of Partnership income and
gain for such year (and, if necessary, subsequent years) in an amount equal to such Partner’s share
of the net decrease in Partnership Minimum Gain to the extent required by Treasury Regulations
Section 1.704-2(f). The items to be so allocated shall be determined in accordance with Sections
1.704-2(f) and (j)(2) of the Treasury Regulations. This subparagraph is intended to comply with
the minimum gain chargeback requirement in said section of the Treasury Regulations and shall be
interpreted consistently therewith. Allocations pursuant to this subparagraph shall be made in
proportion to the respective amounts required to be allocated to each Partner pursuant hereto.

     (b) Partner Minimum Gain Chargeback. Except as otherwise provided in Section 1.704-2(i)(4) of
the Treasury Regulations, if there is a net decrease in Partner Minimum Gain attributable to a
Partner Nonrecourse Debt during any Fiscal Year, each Partner who has a share of the Partner
Minimum Gain attributable to such Partner Nonrecourse Debt, determined in accordance with Section
1.704-2(i)(5) of the Treasury Regulations, shall be specially allocated items of Partnership income
and gain for such year (and, if necessary, subsequent years) in an amount equal to that Partner’s
share of the net decrease in the Partner Minimum Gain attributable to such Partner Nonrecourse Debt
to the extent and in the manner required by Section 1.704-2(i) of the Treasury Regulations. The
items to be so allocated shall be determined in accordance with Sections 1.704-2(i)(4) and (j)(2)
of the Treasury Regulations. This subparagraph is intended to comply with the minimum gain
chargeback requirement with respect to Partner Nonrecourse Debt contained in said section of the
Treasury Regulations and shall be interpreted consistently therewith. Allocations pursuant to this
subparagraph shall be made in proportion to the respective amounts to be allocated to each Partner
pursuant hereto.

     (c) Qualified Income Offset. In the event a Partner unexpectedly receives any adjustment,
allocation or distribution described in Treasury Regulation Sections 1.704 1(b)(2)(ii)(d)(4), (5)
and (6) that causes or increases an Adjusted Capital Account Deficit, gross

27

 

items of income and gain shall be specially allocated to such Partner so as to eliminate such
Adjusted Capital Account Deficit as quickly as possible. This subparagraph is intended to
constitute a “qualified income offset” under Section 1.704-1(b)(2)(ii)(d) of the Treasury
Regulations and shall be interpreted consistently therewith.

     (d) Nonrecourse Deductions. Nonrecourse Deductions for any Fiscal Year shall be allocated to
the Partners in accordance with their respective Percentage Interests.

     (e) Partner Nonrecourse Deductions. Partner Nonrecourse Deductions for any Fiscal Year with
respect to a Partner Nonrecourse Debt shall be specially allocated to the Partners that bear the
economic risk of loss for such Partner Nonrecourse Debt (as determined under Sections 1.704-2(b)(4)
and 1.704-2(i)(1) of the Treasury Regulations).

     (f) Allocations of Book Gain to Advisor.

     (i) If the Partnership distributes Net Capital Event Proceeds to the Advisor pursuant
to Section 5.1(c) during any Fiscal year, then any Book Gain realized by the Partnership for
such Fiscal Year and, if necessary, for subsequent Fiscal Years, shall be allocated to the
Advisor until the cumulative Book Gain allocated to the Advisor under this Section 6.2(f)(i)
is equal to the cumulative Net Capital Event Proceeds distributed to the Advisor pursuant to
Section 5.1(c).

     (ii) If a Listing Event occurs and the Advisor is entitled to a distribution under
Section 5.1(d), then any Book Gain attributable to the adjustment to Carrying Values
required under Section 4.8(b) shall be allocated to the Advisor until the cumulative Book
Gain allocated to the Advisor under this Section 6.2(f)(ii) is equal to the amount to which
the Advisor is entitled under Section 5.1(d). If there is insufficient Book Gain
attributable to such adjustment to Carrying Values to allocate the full amount to be
allocated to the Advisor under the immediately preceding sentence, then any subsequent Book
Gain realized by the Partnership shall be allocated to the Advisor in an amount equal to
such shortfall.

     (g) Curative Allocations. The allocations set forth in Section 6.1(b) and Sections 6.2(a)
through (e) hereof (the “Regulatory Allocations”) are intended to comply with certain requirements
of the Treasury Regulations. It is the intent of the Partners that, to the extent possible all
Regulatory Allocations that are made be offset either with other Regulatory Allocations or with
special allocations pursuant to this Section 6.2(g). Therefore, notwithstanding any other
provision of this Article 6 (other than the Regulatory Allocations), the General Partner shall make
such offsetting special allocations in whatever manner it determines appropriate so that, after
such offsetting allocations are made, each Partner’s Capital Account balance is, to the extent
possible, equal to the Capital Account balance such Partner would have had if the Regulatory
Allocations were not part of the Agreement and all Partnership items were allocated pursuant to
Sections 6.1(a) and 6.2(f). In exercising its discretion under this Section 6.2(g), the General
Partner shall take into account future Regulatory Allocations under Sections

28

 

6.2(a) and 6.2(b) that, although not yet made, are likely to offset other Regulatory
Allocations previously made under Sections 6.2(d) and 6.2(e).

     (h) Changes in Interest. If during any Fiscal Year there is a change in any Partner’s
Percentage Interest, then for purposes of determining the Profits, Losses, or any other items
allocable to such Partner for such Fiscal Year, Profits, Losses, and any such other items shall be
determined on a daily, monthly, or other basis, as determined by the General Partner using any
permissible method under Code Section 706 and the Treasury Regulations thereunder.

     6.3 Tax Allocations

     (a) Except as otherwise provided in this Section 6.3, items of Partnership income, gain, loss
and deduction shall be determined in accordance with Code Section 703, and the Partners’
distributive shares of such items for purposes of Code Section 702 shall be determined according to
their respective shares of Profits or Losses to which such items relate.

     (b) Items of Partnership taxable income, gain, loss and deduction with respect to any
Contributed Property contributed by a Partner shall be allocated among the Partners in accordance
with Code Section 704(c) so as to take account of any variation between the adjusted basis of such
property to the Partnership for Federal income tax purposes and its Carrying Value. Such
allocations shall be made using any method chosen by the General Partner that is permitted by
applicable Treasury Regulations.

     (c) If the Carrying Value of any asset of the Partnership is adjusted pursuant to Section
4.8(b), subsequent allocations of items of income, gain, loss and deduction with respect to such
property shall take account of any variation between the adjusted basis of such asset for Federal
income tax purposes and its Carrying Value. Such allocations shall be made using any method chosen
by the General Partner that is permitted by applicable Treasury Regulations, as determined by the
General Partner.

     (d) Allocations pursuant to this Section 6.3 are solely for purposes of Federal, state and
local taxes and shall not affect, or in any way be taken into account in computing, any Partner’s
Capital Account or share of Profits, Losses, distributions or other Partnership items pursuant to
any provision of this Agreement.

     6.4 Revisions to Allocations to Reflect Issuance of Partnership Interests

     If the Partnership issues Partnership Interests to the General Partner or any additional
Limited Partner pursuant to Article 4, the General Partner shall make any such revisions to this
Article 6 as it deems necessary to reflect the terms of the issuance of such Partnership Interests,
including making preferential allocations to classes of Partnership Interests that are entitled
thereto. Such revisions shall not require the consent or approval of any other Partner.

29

 

ARTICLE VII

MANAGEMENT AND OPERATIONS OF BUSINESS

     7.1 Management

     (a) Management By the General Partner. Except as otherwise expressly provided in this
Agreement, full, complete and exclusive discretion to manage and control the business and affairs
of the Partnership are and shall be vested in the General Partner, and no Limited Partner other
than the Advisor shall have any right to participate in or exercise control or management power
over the business and affairs of the Partnership. The General Partner may not be removed by the
Limited Partners with or without cause.

     (b) Power and Authority of the General Partner. In addition to the powers now or hereafter
granted a general partner of a limited partnership under applicable law or which are granted to the
General Partner under any other provision of this Agreement, the General Partner shall have full
power and authority to do all things deemed necessary or desirable by it to conduct the business of
the Partnership, to exercise all powers set forth in Section 3.2 hereof and to effectuate the
purposes set forth in Section 3.1 hereof, including, without limitation:

     (i) (A) the making of any expenditures, the lending or borrowing of money (including,
without limitation, making prepayments on loans and borrowing money to permit the
Partnership to make distributions to its Partners in such amounts as will permit Landwin
REIT (so long as Landwin REIT qualifies as a REIT) to (1) avoid the payment of any Federal
income or excise tax (including any excise tax pursuant to Section 4981 of the Code) and (2)
make distributions to its stockholders in amounts sufficient to permit Landwin REIT to
maintain REIT status), (B) the assumption or guarantee of, or other contracting for,
indebtedness and other liabilities, (C) the issuance of any evidence of indebtedness
(including the securing of the same by deed, mortgage, deed of trust or other lien or
encumbrance on the Partnership’s assets), and (D) the incurring of any obligations it deems
necessary for the conduct of the activities of the Partnership, including the payment of all
expenses associated with the General Partner;

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

     (iii) the acquisition, disposition, mortgage, pledge, encumbrance, hypothecation or
exchange of any assets, including Real Estate Assets, of the Partnership (including the
exercise or grant of any conversion, option, privilege, or subscription right or other right
available in connection with any assets at any time held by the Partnership) or the merger
or other combination of the Partnership with or into another entity on such terms as the
General Partner deems proper;

30

 

     (iv) the use of the assets of the Partnership (including, without limitation, cash on
hand) for any purpose consistent with the terms of this Agreement and on any terms the
General Partner sees fit, including, without limitation,

     (A) the financing of the conduct of the operations of the General Partner,
Landwin REIT, the Partnership or any of the Partnership’s Subsidiaries,

     (B) the lending of funds to other Persons (including, without limitation, the
Subsidiaries of the Partnership and/or the General Partner) and the repayment of
obligations of the Partnership and its Subsidiaries and any other Person in which it
has an equity investment, and

     (C) the making of capital contributions to the Partnership’s Subsidiaries;

     (v) the development, expansion, construction, management, operation, leasing, repair,
alteration, demolition or improvement of any real property in which the Partnership or any
Subsidiary of the Partnership owns a direct or indirect interest;

     (vi) the negotiation, execution, and performance of any contracts, conveyances or other
instruments that the General Partner considers useful or necessary to the conduct of the
Partnership’s operations or the implementation of the General Partner’s powers under this
Agreement, including contracting with contractors, developers, consultants, accountants,
legal counsel, other professional advisors and other agents and the payment of their
expenses and compensation out of the Partnership’s assets;

     (vii) the distribution of Partnership cash or other Partnership assets in accordance
with this Agreement;

     (viii) the holding, management, investment and reinvestment of cash and other assets of
the Partnership;

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

     (x) the establishment of one or more divisions of the Partnership, the selection and
dismissal of employees of the Partnership (including, without limitation, employees having
titles such as “president,” “vice president,” “secretary” and “treasurer” of the
Partnership), and agents, outside attorneys, accountants, consultants and contractors of the
Partnership, and the determination of their compensation and other terms of employment or
engagement;

     (xi) the formation of, or acquisition of an interest (including non-voting interests in
entities controlled by Affiliates of the Partnership or third parties) in, and the
contribution of property to, any other Entities that the General Partner deems desirable

31

 

(including, without limitation, the acquisition of interests in, and the contributions
of funds or property to, or making of loans to, Subsidiaries of the Partnership and any
other Person from time to time), or the incurrence of indebtedness on behalf of such Persons
or the guarantee of the obligations of such Persons; provided that, as long as Landwin REIT
has determined to elect to qualify as a REIT or to continue to qualify as a REIT, the
Partnership may not engage in any such formation, acquisition or contribution that would
cause Landwin REIT to fail to qualify as a REIT;

     (xii) the control of any matters affecting the rights and obligations of the
Partnership, including:

     (A) the settlement, compromise, submission to arbitration or any other form of
dispute resolution, or abandonment of, any claim, cause of action, liability, debt
or damages, due or owing to or from the Partnership,

     (B) the commencement or defense of suits, legal proceedings, administrative
proceedings, arbitration or other forms of dispute resolution, and

     (C) the representation of the Partnership in all suits or legal proceedings,
administrative proceedings, arbitrations or other forms of dispute resolution, the
incurring of legal expenses, and the indemnification of any Person against
liabilities and contingencies to the extent permitted by law;

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

     (xiv) the determination of the fair market value of any Partnership Assets distributed
in kind using such reasonable method of valuation as the General Partner, in its sole
discretion, may adopt;

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

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

     (xvii) the making, execution and delivery of any and all deeds, leases, notes,
mortgages, deeds of trust, security agreements, conveyances, contracts, guarantees,
warranties, indemnities, waivers, releases or legal instruments or agreements in writing

32

 

necessary or appropriate, in the judgment of the General Partner, for the
accomplishment of any of the foregoing;

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

     (xix) the opening of bank accounts on behalf of, and in the name of, the Partnership
and its Subsidiaries; and

     (xx) the amendment and restatement of Exhibit A to reflect accurately at all times the
Capital Contributions of, Partnership Units held by and Percentage Interests of the Partners
as the same are adjusted from time to time to the extent necessary to reflect any Capital
Contributions, redemptions, issuance of Partnership Units, admission of any Additional
Limited Partner or any Substituted Limited Partner or otherwise, which amendment and
restatement, notwithstanding anything in this Agreement to the contrary, shall not be deemed
an amendment of this Agreement, as long as the matter or event being reflected in Exhibit A
otherwise is authorized by this Agreement.

     (c) Advisor. The General Partner and Landwin REIT have engaged the Advisor to serve as the
advisor to the Partnership and Landwin REIT pursuant to the terms and conditions of the Advisory
Agreement. In consideration for the services to be provided to the Partnership and the General
Partner, the Advisor will receive the fees described in the Advisory Agreement. In addition, the
Advisor is entitled to receive distributions of the Advisor Participation in Sales Proceeds under
Section 5.1(c) hereof, and distributions upon a Listing Event under Section 5.1(d) hereof.

     (d) Insurance. At all times from and after the date hereof, the General Partner may cause the
Partnership to obtain and maintain:

     (i) casualty, liability and other insurance on the Real Estate Assets of the
Partnership;

     (ii) liability insurance for the Indemnitees hereunder; and

     (iii) such other insurance as the General Partner, in its sole and absolute discretion,
determines to be appropriate and reasonable.

     (e) Working Capital and Other Reserves. At all times from and after the date hereof, the
General Partner may cause the Partnership to establish and maintain at any and all times working
capital accounts and other cash or similar balances in such amount as the General Partner, in its
sole and absolute discretion, deems appropriate and reasonable from time to time.

33

 

     7.2 Certificate of Limited Partnership

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

     7.3 Reimbursement of the General Partner

     (a) No Compensation. Except as provided in this Section 7.3 and elsewhere in this Agreement
(including the provisions of Articles 5 and 6 regarding distributions, payments, and allocations to
which it may be entitled), the General Partner shall not be compensated for its services as general
partner of the Partnership.

     (b) Responsibility for Partnership Expenses. The Partnership shall be responsible for and
shall pay all expenses relating to the Partnership’s organization and the ownership and operation
of the Partnership Assets. The General Partner shall be reimbursed on a monthly basis, or such
other basis as it may determine in its sole and absolute discretion, for all expenses that it
incurs on behalf of the Partnership relating to the ownership and operation of the Partnership
Assets, or for the benefit of the Partnership; provided, that the amount of any such reimbursement
shall be reduced by any interest earned by the General Partner with respect to bank accounts or
other instruments or accounts held by it on behalf of the Partnership. Such reimbursement shall be
in addition to any reimbursement made as a result of indemnification pursuant to Section 7.6
hereof.

     (c) Responsibility for General Partner Expenses. The General Partner shall also be reimbursed
for (i) all expenses related to the operations of the General Partner and to the management and
administration of any Subsidiaries of the General Partner, Landwin REIT or the Partnership or
Affiliates of the Partnership, such as auditing expenses and filing fees and any and all salaries,
compensation and expenses of officers and employees of the General Partner, Landwin REIT or the
Partnership and (ii) all expenses the General Partner incurs relating to the organization and/or
reorganization of the Partnership, Landwin REIT and the General Partner, the public offering of
REIT Stock by Landwin REIT, and any other offering, grant, award or issuance of REIT Stock or
additional Partnership Interests pursuant to Section 4.2 or 4.3,

34

 

including all expenses associated with compliance by the General Partner, Landwin REIT and the
Initial Limited Partner with laws, rules and regulations promulgated by any regulatory body.

     (d) Business of the General Partner. The Limited Partners acknowledge that the sole business
of the General Partner and Landwin REIT is the ownership of direct or indirect interests in, and
the direct or indirect operation of, the Partnership, and that all of the expenses of the General
Partner and Landwin REIT are incurred for the benefit of the Partnership.

     (e) Characterization of Reimbursements. All payments and reimbursements hereunder shall be
characterized for Federal income tax purposes as expenses of the Partnership incurred on its
behalf, and not as expenses of the General Partner.

     7.4 Acquisition of Limited Partner Interests by the General Partner

     The General Partner and any Affiliates of the General Partner may acquire Limited Partner
Interests and shall be entitled to exercise all rights of a Limited Partner relating to such
Limited Partner Interests.

     7.5 Transactions with Affiliates

     (a) Transactions with Subsidiaries. The Partnership may lend or contribute funds or other
assets to its Subsidiaries or other Persons in which it has an equity investment and such
Subsidiaries and 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.

     (b) Certain Transactions with the Advisor and its Affiliates. Notwithstanding anything to the
contrary in this Agreement, the General Partner shall not cause the Partnership, directly or
indirectly, to Transfer any property to, purchase any property from, loan any money to, borrow any
money from or enter into any other transaction with the Advisor or any of its Affiliates, or any
director of the General Partner or of Landwin REIT, except in accordance with the procedures set
forth in Articles X and XI of the Articles of Incorporation for transactions between the General
Partner and the Advisor or its Affiliates.

     (c) Benefit Plans Sponsored by the Partnership. The General Partner or Landwin REIT, in its
sole and absolute discretion and without the approval of the Limited Partners, may propose and
adopt, on behalf of the Partnership, employee benefit plans, option or other equity incentive
plans, and similar plans funded by the Partnership for the benefit of employees of the Partnership,
Landwin REIT, the General Partner, any Subsidiaries of the Partnership or any Affiliate of any of
them in respect of services performed, directly or indirectly, for the benefit of the Partnership,
Landwin REIT, the General Partner, any Subsidiaries of the Partnership or any of their respective
Affiliates.

35

 

     7.6 Indemnification

     (a) General. Subject to the limitations of Section 7.6(b), to the maximum extent permitted
under the Act in effect from time to time and subject to the limitations of Section II.G. of the
NASAA Guidelines, the Partnership shall indemnify each Indemnitee from and against any and all
losses, claims, damages, liabilities, joint or several, expenses (including, without limitation,
reasonable attorneys’ fees and other legal fees and expenses), judgments, fines, settlements, and
other amounts arising from any and all claims, demands, actions, suits or proceedings, civil,
criminal, administrative or investigative (collectively, “Claims”), that relate to the operations
of the Partnership, Landwin REIT, the General Partner or any of the Partnership’s Subsidiaries in
which such Indemnitee may be involved, or is threatened to be involved, as a party or otherwise;
provided, however, that in no event shall this Section 7.6(a) enlarge the indemnification permitted
below under Section 7.6(b). The Partnership will reimburse Landwin REIT for any amounts paid in
satisfaction of indemnification obligations under the Articles of Incorporation.

     (b) Limitation. Notwithstanding any provision hereof to the contrary:

     (i) the Partnership will not indemnify any Indemnitee unless:

     (A) the Indemnitee has determined in good faith that the course of conduct
which caused the loss, liability or expenses was in the best interests of the
Partnership;

     (B) the Indemnitee was acting on behalf of the Partnership or performing
services for the Partnership;

     (C) such Claim was not the result of:

     (1) with respect to the General Partner, the gross negligence, willful
misconduct or fraud of the General Partner;

     (2) with respect to any Limited Partner, the gross negligence, willful
misconduct or fraud of the Limited Partner;

     (3) with respect to (A) the directors, officers and employees of the
General Partner or Landwin REIT, (B) the Advisor and (C) the members,
managers and employees of the Advisor, the negligence or misconduct of such
Person; or

     (4) with respect to the Independent Directors (as defined in the
Articles of Incorporation), the gross negligence or willful misconduct of
such Independent Director; and

     (D) any indemnification or agreement to hold harmless may be paid only out of
the Net Assets of the Partnership, and neither the General Partner nor

36

 

any Limited Partner shall have any obligation to contribute to the capital of
the Partnership, or otherwise provide funds, to enable the Partnership to fund its
obligations under this Section 7.6;

     (ii) notwithstanding anything to the contrary in Section 7.6(b)(ii), the Partnership
will not indemnify any Indemnitee for losses, liabilities or expenses arising from or out of
an alleged violation of federal or state securities laws unless:

     (A) there has been a successful adjudication on the merits of each count
involving alleged securities law violations as to the particular Indemnitee;

     (B) such claims have been dismissed with prejudice on the merits by a court of
competent jurisdiction as to the particular Indemnitee; or

     (C) a court of competent jurisdiction approves a settlement of the claims
against the particular Indemnitee and finds that indemnification of the settlement
and related costs should be made, and the court considering the matter has been
advised of the position of the Securities Exchange Commission and the published
position of any state securities regulatory authority in which securities of the
Company were offered or sold as to indemnification for violations of securities
laws.

     (c) Contractual Obligations. Without limitation, the indemnity set forth in this Section 7.6
shall extend to any liability of any Indemnitee pursuant to a loan guaranty (except a guaranty by a
Limited Partner of nonrecourse indebtedness of the Partnership or as otherwise provided in any such
loan guaranty), contractual obligation for any indebtedness or other obligation or otherwise for
any indebtedness of the Partnership or any Subsidiary of the Partnership (including, without
limitation, any indebtedness which the Partnership or any Subsidiary of the Partnership has assumed
or taken subject to), and the General Partner is hereby authorized and empowered, on behalf of the
Partnership, to enter into one or more indemnification agreements consistent with the provisions of
this Section 7.6 in favor of any Indemnitee having or potentially having liability for any such
indebtedness.

     (d) Advancement of Expenses. Reasonable expenses incurred by an Indemnitee who is a party to
a proceeding shall be paid or reimbursed by the Partnership in advance of the final disposition of
any and all Claims made or threatened against an Indemnitee only if all of the following conditions
are satisfied: (a) the Claim relates to acts or omissions with respect to the performance of duties
or services on behalf of the Partnership (b) either the Claim was initiated by a third party who is
not a stockholder of Landwin REIT, or (ii) if the Proceeding was initiated by a Stockholder, the
initiating Stockholder was acting in his or her capacity as such and the advancement was approved
by a court of competent jurisdiction, and (c) the Indemnitee provides the Partnership with a
written undertaking to repay the amount paid or reimbursed by the Partnership, together with the
applicable legal rate of interest thereon, if it is ultimately

37

 

determined that the Indemnitee did not comply with the requisite standard of conduct and is
not entitled to indemnification.

     (e) No Exclusivity. The indemnification provided by this Section 7.6 shall be in addition to
any other rights to which an Indemnitee or any other Person may be entitled under any agreement,
pursuant to any vote of the Partners, as a matter of law or otherwise, and shall continue as to an
Indemnitee who has ceased to serve in such capacity unless otherwise provided in a written
agreement pursuant to which such Indemnities are indemnified.

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

     (g) Benefit Plan Fiduciary. For purposes of this Section 7.6, the Partnership shall be deemed
to have requested an Indemnitee to serve as fiduciary of an employee benefit plan whenever the
performance by such Indemnitee of its duties to the Partnership also imposes duties on, or
otherwise involves services by, such Indemnitee to the plan or participants or beneficiaries of the
plan. Excise taxes assessed on an Indemnitee with respect to an employee benefit plan pursuant to
applicable law shall constitute fines within the meaning of this Section 7.6 and actions taken or
omitted by the Indemnitee with respect to an employee benefit plan in the performance of its duties
for a purpose reasonably believed by such Indemnitee 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.

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

     (i) Interested Transactions. An Indemnitee shall not be denied indemnification in whole or in
part under this Section 7.6 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.

     (j) Benefit. The provisions of this Section 7.6 are for the benefit of the Indemnitees, their
heirs, successors, assigns and administrators and shall not be deemed to create any rights for the
benefit of any other Persons.

     (k) Amendment of this Section 7.6. Any amendment, modification or repeal of this Section 7.6
or any provision hereof shall be prospective only and shall not in any way affect the Partnership’s
liability to any Indemnitee under this Section 7.6, as in effect immediately prior to such
amendment, modification, or repeal with respect to Claims arising from or relating to

38

 

matters occurring, in whole or in part, prior to such amendment, modification or repeal,
regardless of when such Claims may arise or be asserted.

     (l) Indemnification Payments Not Distributions. If and to the extent any payments to the
General Partner, Landwin REIT or the Advisor pursuant to this Section 7.6 constitute gross income
to the General Partner, Landwin REIT or the Advisor (as opposed to the repayment of advances made
on behalf of the Partnership), such amounts shall constitute guaranteed payments within the meaning
of Section 707(c) of the Code, shall be treated consistently therewith by the Partnership and all
Partners, and shall not be treated as distributions for purposes of computing the Partners’ Capital
Accounts.

     (m) Exception to Indemnification. Notwithstanding anything to the contrary in this Agreement,
the General Partner shall not be entitled to indemnification hereunder for any Claim for which the
General Partner is obligated to indemnify the Partnership under any other agreement between the
General Partner and the Partnership.

     7.7 Liability of the General Partner

     (a) General. To the maximum extent permitted under the Act and the subject to the limitations
of Section II.G. of the NASAA Guidelines in effect from time to time, neither the General Partner
nor Landwin REIT nor any director, officer, shareholder, partner, member or employee, trustee,
representative or agent of the General Partner or Landwin REIT (including the Advisor and its
Affiliates) shall be liable to the Partnership or to any Partner for (i) any act or omission
performed or failed to be performed by it, or for any losses, claims, costs, damages, or
liabilities arising from any such act or omission, except to the extent such loss, claim, cost
damage or liability results from such Person’s gross negligence, willful misconduct or fraud, (ii)
any tax liability imposed on the Partnership or (iii) any losses due to the misconduct, negligence
(gross or ordinary), dishonesty or bad faith of any agents of the Partnership. Notwithstanding
anything to the contrary in this Section 7.7(a), this limitation on liability applies only to the
extent that the particular officer or director has satisfied the requirements of Sections 7.6(b)(i)
and (ii).

     (b) No Obligation to Consider Separate Interests of Limited Partners. The Limited Partners
expressly acknowledge that (i) the General Partner (and the Advisor, in advising the General
Partner) is acting on behalf of the Partnership and the stockholders of the General Partner,
collectively, (ii) the General Partner (and the Advisor, in advising the General Partner), subject
to the provisions of Section 7.1(f) hereof, is under no obligation to consider the separate
interest of the Limited Partners (including, without limitation, the tax consequences to Limited
Partners or Assignees) in deciding whether to cause the Partnership to take (or decline to take)
any actions, and (iii) neither the General Partner nor the Advisor shall be liable for monetary
damages for losses sustained, liabilities incurred, or benefits not derived by Limited Partners in
connection with such decisions, unless the General Partner or the Advisor, as the case may be,

39

 

acted in bad faith and the act or omission was material to the matter giving rise to the loss,
liability or benefit not derived.

     (c) Conflict. The Limited Partners expressly acknowledge that in the event of any conflict in
the fiduciary duties owed by the General Partner to its owner (or by its owner to its shareholders)
and by the General Partner, in its capacity as a general partner of the Partnership, to the Limited
Partners, the General Partner may act in the best interests of the General Partner’s owner (or the
shareholders of its owner) without violating its fiduciary duties to the Limited Partners, and that
the General Partner shall not be liable for monetary damages for losses sustained, liabilities
incurred, or benefits not derived by the Limited Partners in connection with any such violation.

     (d) Amendment of this Section 7.7. Any amendment, modification or repeal of this Section 7.7
or any provision hereof shall be prospective only and shall not in any way affect the limitations
on the General Partner’s and Landwin REIT’s and their officers’ and directors’ liability to the
Partnership and the Limited Partners under this Section 7.7 as in effect immediately prior to such
amendment, modification or repeal with respect to claims arising from or relating to matters
occurring, in whole or in part, prior to such amendment, modification or repeal, regardless of when
such claims may arise or be asserted.

     7.8 Other Matters Concerning the General Partner

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

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

     (c) Action Through Agents. The General Partner shall have the right, in respect of any of its
powers or obligations hereunder, to act through any of its duly authorized officers, agents,
including the Advisor, and duly appointed attorneys-in-fact. Each such officer, agent or
attorney-in-fact shall, to the extent granted by the General Partner in writing, have full power
and authority to do and perform each and every act and duty which is permitted or required to be
done by the General Partner hereunder.

     (d) Actions to Maintain REIT Status. Notwithstanding any other provisions of this Agreement
or the Act, any action of the General Partner on behalf of the Partnership or any

40

 

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 Landwin REIT to continue to qualify as a REIT, or (ii) avoid
Landwin REIT incurring any taxes under Section 857 or Section 4981 of the Code, is expressly
authorized under this Agreement and is deemed approved by all of the Limited Partners.

     7.9 Title to Partnership Assets

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

     7.10 Reliance by Third Parties

     (a) Notwithstanding anything to the contrary in this Agreement, any Person dealing with the
Partnership shall be entitled to assume that the General Partner has full power and authority,
without the consent or approval of any other Partner or Person, to encumber, sell or otherwise use
in any manner any and all Partnership Assets and to enter into any contracts on behalf of the
Partnership, and take any and all actions on behalf of the Partnership, and such Person shall be
entitled to deal with the General Partner as if the General Partner were the Partnership’s sole
party in interest, both legally and beneficially.

     (b) Each Limited Partner hereby waives any and all defenses or other remedies which may be
available against such Person to contest, negate or disaffirm any action of the General Partner in
connection with any such dealing.

     (c) In no event shall any Person dealing with the General Partner or its representatives be
obligated to ascertain that the terms of this Agreement have been complied with or to inquire into
the necessity or expediency of any act or action of the General Partner or its representatives.

     (d) Each and every certificate, document or other instrument executed on behalf of the
Partnership by the General Partner or its representatives shall be conclusive evidence in favor of
any and every Person relying thereon or claiming thereunder that:

41

 

     (i) at the time of the execution and delivery of such certificate, document or
instrument, this Agreement was in full force and effect;

     (ii) the Person executing and delivering such certificate, document or instrument was
duly authorized and empowered to do so for and on behalf of the Partnership; and

     (iii) such certificate, document or instrument was duly executed and delivered in
accordance with the terms and provisions of this Agreement and is binding upon the
Partnership.

ARTICLE VIII

RIGHTS AND OBLIGATIONS OF LIMITED PARTNERS

     8.1 Limitation of Liability

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

     8.2 No Right to Participate in the Management of Business

     No Limited Partner shall take part in the management or control of the Partnership’s
investment or other activities, transact any business in the Partnership’s name or have the power
to sign documents for or otherwise bind the Partnership. Except as expressly provided herein, no
Limited Partner shall have the right to vote for the election, removal or replacement of the
General Partner. The exercise by any Limited Partner of any right conferred herein shall not be
construed to constitute participation by such Limited Partner in the control of the business of the
Partnership so as to make such Limited Partner liable as a general partner for the debts and
obligations of the Partnership for purposes of the Act, laws of non-U.S. jurisdictions or
otherwise.

     8.3 Outside Activities of Limited Partners

     Subject to any agreements entered into by a Limited Partner or its Affiliates, or any
Assignee, with the Partnership or any of its Subsidiaries, any Limited Partner or Assignee and any
officer, director, employee, agent, trustee, Affiliate or shareholder or other equity owner of any
Limited Partner or Assignee shall be entitled to and may have business interests and engage in
business activities in addition to those relating to the Partnership, including business interests
and activities that are in direct competition with the Partnership or that are enhanced by the
activities of the Partnership. Neither the Partnership nor any of the other Partners shall have
any rights by virtue of this Agreement in any business ventures of any Limited Partner or Assignee.
None of the Limited Partners nor any other Person shall have any rights by virtue of this
Agreement or the Partnership relationship established hereby in any business ventures of any

42

 

other Person and such Person shall have no obligation pursuant to this Agreement to offer any
interest in any such business ventures to the Partnership, any Limited Partner or any such other
Person, even if such opportunity is of a character which, if presented to the Partnership, any
Limited Partner or such other Person, could be taken by such Person.

     8.4 Return of Capital

     No Limited Partner shall be entitled to the withdrawal or return of its Capital Contribution,
except (a) to the extent of such Limited Partner’s right of redemption set forth in Section 8.6,
and (b) to the that extent the General Partner (or the Liquidation Trustee) determines to make
distributions made pursuant to this Agreement or upon termination of the Partnership as provided
herein. Except as otherwise expressly provided in this Agreement, no Limited Partner or Assignee
shall have priority over any other Limited Partner or Assignee, either as to the return of Capital
Contributions or as to distributions or allocations of Profits or Losses.

     8.5 Rights of Limited Partners Relating to the Partnership

     (a) General. In addition to the other rights provided by this Agreement and any rights
granted to limited partners of a limited partnership under the Act that such limited partners are
not permitted to waive under the Act, and except as limited by Section 8.5(b) hereof, each Limited
Partner shall have the right, for a purpose reasonably related to such Limited Partner’s interest
as a limited partner in the Partnership, upon written demand with a statement of the purpose of
such demand and at such Limited Partner’s own expense (including such reasonable copying and
administrative charges as the General Partner may establish from time to time):

     (i) to obtain a copy of the most recent annual and quarterly reports filed with the
Securities and Exchange Commission by Landwin REIT pursuant to the Securities Exchange Act
of 1934;

     (ii) to obtain a copy of the Partnership’s Federal, state and local income tax returns
for each Fiscal Year;

     (iii) to obtain a current list of the name and last known business, residence or
mailing address of each Partner; and

     (iv) to obtain a copy of this Agreement and the Certificate and all amendments thereto,
together with executed copies of all powers of attorney pursuant to which this Agreement,
the Certificate and all amendments thereto have been executed.

     Each Limited Partner hereby waives any and all rights that such Limited Partner may have under
the Act that the Act permits limited partners to waive, except any such right that is granted
expressly to such Limited Partner under this Agreement.

43

 

     (b) Confidentiality. Notwithstanding any other provision of this Section 8.5, the General
Partner may keep confidential from the Limited Partners, for such period of time as the General
Partner determines in its sole and absolute discretion to be reasonable, any information that:

     (i) the General Partner reasonably believes to be in the nature of trade secrets or
other information, the disclosure of which the General Partner in good faith believes is not
in the best interests of the Partnership or could damage the Partnership or its business; or

     (ii) the Partnership is required by law or by agreements with an unaffiliated third
party to keep confidential.

     8.6 Redemption Right

     (a) Redemption Right. Subject to the provisions of this Section 8.6, at any time on or after
the first anniversary date of the issuance of a Partnership Unit to a Partner, such Partner shall
have the right (the “Redemption Right”) to require the Partnership to redeem on a Specified
Redemption Date all or a portion of the Partnership Units held by such Partner, at a redemption
price equal to and in the form of the Redemption Amount. The Redemption Right shall be exercised
pursuant to a Notice of Redemption Request delivered to the General Partner by the Partner who is
exercising the Redemption Right (the “Redeeming Partner”). In addition, if at any time Landwin
REIT or the Partnership propose to engage in any merger, consolidation or other combination with or
into another Person or a sale of all or substantially all of the assets of Landwin REIT, or a
liquidation, or any reclassification, recapitalization or change of common and preferred stock into
which a Partnership Unit may be exchanged, each holder of a Partnership Unit will have the right to
exchange the Partnership Unit into cash or, at the option of Landwin REIT, shares of REIT Stock,
prior to the stockholder vote on the transaction.

     (b) Distributions and Allocations.

     (i) Subject to Section 8.6(c), the Redeeming Partner shall have no right to receive any
distributions that are paid after the Specified Redemption Date with respect to any
Partnership Units redeemed pursuant to this Section 8.6.

     (ii) If any Partnership Interest is redeemed (other than pursuant to Section 8.6(c) on
any day other than the first day of a Fiscal Year, then Profit, Losses, each item thereof
and all other items attributable to such Partnership Interest for such Fiscal Year shall be
divided and allocated to the Redeeming Partner by taking into account the Redeeming
Partner’s ownership of such Partnership Interest during the Fiscal Year in accordance with
Section 706(d) of the Code, using the interim closing of the books method (unless the
General Partner, in its sole and absolute discretion, elects to adopt a daily, weekly or
monthly proration period, in which event Profits, Losses, each item thereof and all other
items attributable to such redeemed Partnership Interest for such

44

 

Fiscal Year shall be prorated based upon the applicable method selected by the General
Partner).

     (c) Assumption of Obligation. Notwithstanding the provisions of Section 8.6(a), Landwin REIT
may, in its sole and absolute discretion (subject to the limitations on ownership and transfer of
shares of REIT Stock in the Articles of Incorporation), assume directly the obligation to satisfy a
Redemption Right and satisfy such Redemption Right by paying to the Redeeming Partner the
Redemption Amount on the Specified Redemption Date, whereupon Landwin REIT shall acquire the
Partnership Units offered for redemption by the Redeeming Partner and shall be treated for all
purposes of this Agreement as the owner of such Partnership Units. In the event that Landwin REIT
shall exercise this right to satisfy the Redemption Right in the manner described in the preceding
sentence and shall fully perform its obligation to pay the Redemption Amount on the Specified
Redemption Date, the Partnership shall have no obligation to pay any amount to the Redeeming
Partner with respect to such Redeeming Partner’s exercise of the Redemption Right, and each of the
Redeeming Partner, the Partnership and Landwin REIT shall treat the transaction between Landwin
REIT and the Redeeming Partner as a sale of the Redeeming Partner’s Partnership Units to Landwin
REIT for Federal income tax purposes. Distributions and allocations with respect to Partnership
Units acquired by Landwin REIT pursuant to this Section 8.6(c) shall be made in accordance with
Sections 11.6(c) and 11.6(d).

     (d) Fractional Shares. If the General Partner or Landwin REIT elects, either on its own
behalf or on behalf of the Partnership, to satisfy the Redemption Right by paying the REIT Stock
Amount, and the REIT Stock Amount is not equal to a whole number of shares of REIT Stock, the
Redeeming Partner shall be paid (i) that number of shares of REIT Stock which equals the nearest
whole number less than the REIT Stock Amount, plus (ii) (A) an amount of cash equal to the Value of
one share of REIT Stock on the applicable Valuation Date, multiplied by (B) the REIT Stock Amount
minus the whole number of shares of REIT Stock pursuant to clause (i) of this Section 8.6(d).

     (e) Execution of Documents. Each Redeeming Partner agrees to execute such documents as the
General Partner may reasonably require in connection with (i) the exercise and satisfaction of the
Redemption Right, (ii) any assumption by Landwin REIT pursuant to Section 8.6(c), and (iii) any
issuance of REIT Stock in connection with the Partnership or Landwin REIT paying the Redemption
Amount to the Redeeming Partner.

     (f) Exceptions to Redemption Right. Notwithstanding the provisions of Section 8.6(a), unless
the General Partner elects for payment of the Redemption Amount by the Partnership to be the Cash
Amount, a Partner shall not be entitled to exercise the Redemption Right if the delivery of REIT
Stock to such Partner on the Specified Redemption Date would (i) be prohibited under the Articles
of Incorporation or the bylaws of Landwin REIT, (ii) adversely affect the ability of Landwin REIT
to continue to qualify as a REIT or would subject Landwin REIT to any additional taxes under
Section 857 or Section 4981 of the Code, (iii) constitute or be

45

 

likely to constitute a violation of any applicable federal or state securities laws or
regulations, (iv) be prohibited under Section 11.6(f) of this Agreement (in each case regardless of
whether Landwin REIT would in fact assume and satisfy the Redemption Right); or (v) would cause
Landwin REIT to directly or indirectly own (actually or constructively) 10% or more of the
ownership interests in a tenant of Landwin REIT (or a subsidiary thereof) within the meaning of
Section 856(d)(2)(B) of the Code and would cause Landwin REIT to fail to satisfy any of the gross
income requirements of Section 856(c) of the Code.

     (g) Exercise of the Redemption Right by Landwin REIT. The receipt of a notice of redemption
with respect to shares of REIT Stock held by stockholders of Landwin REIT (a “REIT Notice) shall be
deemed to be a Notice of Redemption Request given by Landwin REIT to the Partnership and an
exercise of the Redemption Right with respect to a number of Partnership Units equal to the number
of shares of REIT Stock identified in the REIT Notice. With respect to any Redemption Right
exercised by Landwin REIT pursuant to this Section 8.6(g), Landwin REIT will elect for payment of
the Redemption Amount by the Partnership to Landwin REIT to be the Cash Amount.

     (h) Assignees. The Assignee of any Limited Partner may exercise the rights of such Limited
Partner pursuant to this Section 8.6 with respect to any Partnership Units Transferred by such
Limited Partner to such Assignee, and such Limited Partner shall be deemed to have assigned such
rights to such Assignee and shall be bound by the exercise of such rights by such Assignee. In
connection with any exercise of such rights by such Assignee on behalf of such Limited Partner, the
Redemption Amount shall be paid by the Partnership directly to such Assignee and not to such
Limited Partner.

     (i) No Liens on Partnership Units Delivered for Redemption. Each Partner covenants and agrees
that all Partnership Units delivered for redemption pursuant to this Section 8.6 shall be delivered
to the Partnership or Landwin REIT, as the case may be, free and clear of all Liens.
Notwithstanding anything contained herein to the contrary, neither Landwin REIT nor the Partnership
shall be under any obligation to acquire Partnership Units which are or may be subject to any
Liens. Each Partner further agrees that, if any state or local property transfer tax is payable as
a result of the Transfer of its Partnership Units to the Partnership or Landwin REIT pursuant to
this Section 8.6, such Partner shall assume and pay such transfer tax.

     (j) Cancellation of Units; Amendments to Exhibit A. Upon the redemption of Partnership Units
pursuant to this Section 8.6, (i) all such redeemed Partnership Units (other than Partnership Units
redeemed pursuant to Section 8.6(c) shall be cancelled, and (ii) the General Partner shall amend
Exhibit A to reflect the new Percentage Interests of the Partners and to (A) either adjust the
number of Partnership Units and the Percentage Interest of the Redeeming Partner or eliminate the
Redeeming Partner from Exhibit A, as applicable, and (B) in the event that Landwin REIT assumes the
obligation to satisfy a Redemption Right pursuant to Section 8.6(c), adjust the number of
Partnership Units and the Percentage Interest of Landwin REIT to reflect the Transfer of such
Partnership Units to Landwin REIT.

46

 

     (k) Additional Partnership Interests. If the Partnership issues Partnership Interests to any
Additional Limited Partner pursuant to Article 4, the General Partner shall make such revisions to
this Section 8.6 as the General Partner determines are necessary to reflect the issuance of such
Partnership Interests (including setting forth any restrictions on the exercise of the Redemption
Right with respect to such Partnership Interests).

     (l) Redemptions by the Advisor. For so long as the Advisor remains the advisor to the
Partnership and Landwin REIT under the Advisory Agreement, neither the Advisor nor any Affiliate of
the Advisor (other than the General Partner and Landwin REIT) may redeem any portion of the
Partnership Units held by such Person; provided that, upon the occurrence of a Listing Event,
immediately following the distribution to the Advisor of all amounts required to be distributed to
the Advisor pursuant to Section 5.1(d), the Partnership shall redeem all of the Partnership Units
held by the Advisor and its Affiliates (other than the General Partner and Landwin REIT), at a
redemption price equal to and in the form of the Redemption Amount. With respect to any automatic
redemption of Partnership Units held by the Advisor or its Affiliates (other than the General
Partner and Landwin REIT) pursuant to this Section 8.6(l), the General Partner will elect for
payment of the Redemption Amount by the Partnership to the Advisor and/or any such Affiliate to be
the Cash Amount.

ARTICLE IX

BOOKS, RECORDS, ACCOUNTING AND REPORTS

     9.1 Records and Accounting

     (a) Books and Records. The General Partner shall keep or cause to be kept at the principal
office of the Partnership those records and documents required to be maintained by the Act and
other books and records deemed by the General Partner to be appropriate with respect to the
Partnership’s business, including, without limitation, all books and records necessary for Landwin
REIT to comply with applicable REIT Requirements and to provide to the Limited Partners any
information, lists and copies of documents required to be provided pursuant to Sections 8.5(a) and
9.2 hereof.

     (b) Accounting Method. The books of the Partnership shall be maintained, for financial and
tax reporting purposes, on an accrual basis in accordance with GAAP.

     9.2 Reports

     (a) Annual Reports. As soon as practicable after the end of each Fiscal Year, but in no event
later than the date on which Landwin REIT mails its annual report to its stockholders, the General
Partner shall cause to be mailed to each Limited Partner as of the close of the Fiscal Year, an
annual report containing financial statements of the Partnership, or of Landwin REIT, if such
statements are prepared on a consolidated basis with the Partnership, for such Fiscal Year,

47

 

presented in accordance with GAAP, such statements to be audited by a nationally recognized
firm of independent public accountants selected by Landwin REIT in its sole discretion.

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

     (c) Delivery. Notwithstanding the foregoing, the General Partner may deliver to the Limited
Partners each of the reports described above, as well as any other communications that it may
provide hereunder, by e-mail or by any other electronic means.

ARTICLE X

TAX MATTERS

     10.1 Preparation of Tax Returns

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

     10.2 Tax Elections

     Except as otherwise provided herein, the General Partner shall, in its sole and absolute
discretion, determine whether to make any available election pursuant to the Code; provided,
however, that the General Partner shall make the election under Section 754 of the Code in
accordance with applicable regulations thereunder. The General Partner shall have the right to
seek to revoke any such election it makes, including, without limitation, the election under
Section 754 of the Code, upon the General Partner’s determination, in its sole and absolute
discretion, that such revocation is in the best interests of the Partners.

     10.3 Tax Matters Partner

     (a) General. The General Partner shall be the “tax matters partner” of the Partnership for
federal income tax purposes. Pursuant to Section 6223(c)(3) of the Code, upon receipt of notice
from the Internal Revenue Service of the beginning of an administrative proceeding with respect to
the Partnership, the tax matters partner shall furnish the Internal Revenue Service with the name,
address, taxpayer identification number, and profit interest of each of the Limited

48

 

Partners and the Assignees; provided, that such information is provided to the Partnership by
the Limited Partners and the Assignees.

     (b) Powers. The tax matters partner is authorized, but not required:

     (i) to enter into any settlement with the Internal Revenue Service with respect to any
administrative or judicial proceedings for the adjustment of Partnership items required to
be taken into account by a Partner for income tax purposes (such administrative proceedings
being referred to as a “tax audit” and such judicial proceedings being referred to as
“judicial review”), and in the settlement agreement the tax matters partner may expressly
state that such agreement shall bind all Partners, except that such settlement agreement
shall not bind any Partner:

     (A) who (within the time prescribed pursuant to the Code and the Treasury
Regulations) files a statement with the Internal Revenue Service providing that the
tax matters partner shall not have the authority to enter into a settlement
agreement on behalf of such Partner; or

     (B) who is a “notice partner” (as defined in Section 6231(a)(8) of the Code) or
a member of a “notice group” (as defined in Section 6223(b)(2) of the Code);

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

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

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

     (v) to enter into an agreement with the Internal Revenue Service to extend the period
for assessing any tax which is attributable to any item required to be taken account of by a
Partner for tax purposes, or an item affected by such item; and

49

 

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

     The taking of any action and the incurring of any expense by the tax matters partner in
connection with any such proceeding, except to the extent required by law, is a matter in the sole
and absolute discretion of the tax matters partner and the provisions relating to indemnification
of the General Partner set forth in Section 7.6 of this Agreement shall be fully applicable to the
tax matters partner in its capacity as such.

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

     10.4 Organizational Expenses

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

     10.5 Withholding

     (a) General. Each Limited Partner hereby authorizes the Partnership to withhold from, or pay
on behalf of or with respect to, such Limited Partner any amount of federal, state, local, or
foreign taxes that the General Partner determines that the Partnership is required to withhold or
pay with respect to any amount distributable or allocable to such Limited Partner pursuant to this
Agreement, including, without limitation, any taxes required to be withheld or paid by the
Partnership pursuant to Sections 1441, 1442, 1445 or 1446 of the Code.

     (b) Treatment of Amounts Withheld. Any amount paid on behalf of or with respect to a Limited
Partner shall constitute a loan by the Partnership to such Limited Partner, which loan shall be
repaid by such Limited Partner within fifteen (15) days after notice from the General Partner that
such payment must be made unless:

     (i) the Partnership withholds such payment from a distribution which would otherwise be
made to the Limited Partner; or

     (ii) the General Partner determines, in its sole and absolute discretion, that such
payment may be satisfied out of the available funds of the Partnership which would, but for
such payment, be distributed to the Limited Partner.

50

 

     Any amounts withheld from amounts otherwise distributable to a Limited Partner as described in
clause (i) or (ii) of this Section 10.5(b) shall be treated as having been distributed to such
Limited Partner.

     (c) Security Interest. Each Limited Partner hereby unconditionally and irrevocably grants to
the Partnership a security interest in such Limited Partner’s Partnership Interest to secure such
Limited Partner’s obligation to pay to the Partnership any amounts required to be paid pursuant to
this Section 10.5. Each Limited Partner shall take such actions as the Partnership or the General
Partner shall request in order to perfect or enforce the security interest created hereunder.

     (d) Default. In the event that a Limited Partner fails to pay when due any amounts owed to
the Partnership pursuant to this Section 10.5, the General Partner may, in its sole and absolute
discretion, elect to make the payment to the Partnership on behalf of such defaulting Limited
Partner, and in such event shall be deemed to have loaned such amount to such defaulting Limited
Partner and shall succeed to all rights and remedies of the Partnership as against such defaulting
Limited Partner. Without limitation, in such event, the General Partner shall have the right to
receive distributions that would otherwise be distributable to such defaulting Limited Partner
until such time as such loan, together with all interest thereon, has been paid in full, and any
such distributions so received by the General Partner shall be treated as having been distributed
to the defaulting Limited Partner and immediately paid by the defaulting Limited Partner to the
General Partner in repayment of such loan.

     (e) Interest. Any amount payable by a Limited Partner under this Section 10.5 shall bear
interest at the lesser of (i) the base rate on corporate loans at large United States money center
commercial banks, as published from time to time in The Wall Street Journal, plus four (4)
percentage points, and (ii) the maximum lawful rate of interest on such obligation, such interest
to accrue from the date such amount is due (i.e., fifteen (15) days after demand) until such amount
is paid in full.

ARTICLE XI

TRANSFERS AND WITHDRAWALS

     11.1 Transfer

     (a) Definition. The term “Transfer,” when used in this Article 11 with respect to a
Partnership Interest or a Partnership Unit, shall be deemed to refer to a transaction by which the
General Partner purports to assign all or any part of its General Partner Interest to another
Person or a Limited Partner purports to assign all or any part of its Limited Partner Interest to
another Person, and includes a sale, assignment, gift, pledge, encumbrance, hypothecation,
mortgage, exchange or any other disposition by law or otherwise. The term “Transfer” when used in
this Article 11 does not include any redemption of Partnership Units or other Partnership Interests
for cash or REIT Stock pursuant to Section 8.6.

51

 

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

11.2 Transfer of the General Partner’s General Partner Interest

     (a) The General Partner may not Transfer any of its General Partner Interest or withdraw as
General Partner, except:

     (i) with the Consent of the Outside Limited Partners; or

     (ii) if such Transfer is to an entity which is wholly-owned, directly or indirectly, by
the General Partner;

     (b) In the event the General Partner withdraws as general partner of the Partnership in
accordance with Section 11.2(a), the General Partner’s General Partner Interest shall immediately
be converted into a Limited Partner Interest.

     11.3 Limited Partners’ Rights to Transfer

     (a) General. Subject to the provisions of Section 11.3(b), no Limited Partner shall have the
right to Transfer all or a portion of such Limited Partner’s Partnership Interest, or any of such
Limited Partner’s rights as a Limited Partner, without the written consent of the General Partner,
which may be given or withheld by the General Partner in its sole and absolute discretion.

     (b) Transfers to Permitted Transferees. Notwithstanding the provisions of Section 11.3(a),
but subject to the provisions of Sections 11.3(c), 11.3(d), and 11.3(e) and other applicable
restrictions on Transfers contained in this Article 11, a Limited Partner may Transfer, with or
without the consent of the General Partner, all or a portion of his Partnership Units to a
Permitted Transferee; provided that, such Permitted Transferee qualifies as “accredited investor”
as such term is defined in Rule 501(a) of Regulation D promulgated under the Securities Act; and
provided further that, no Transfer pursuant to this Section 11.3(b) shall be effective until the
General Partner receives notice of such Transfer.

     (c) No Transfers Violating Securities Laws. The General Partner may prohibit any Transfer by
a Limited Partner of its Partnership Units if, in the opinion of legal counsel to the Partnership,
such Transfer would require the filing of a registration statement under the Securities Act, or
would otherwise violate any federal or state securities laws or regulations applicable to the
Partnership or the Partnership Units.

     (d) No Transfers to Certain Lenders. 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 Treasury

52

 

Regulations Section 1.752-4(b)) to any lender to the Partnership whose loan constitutes a
nonrecourse liability (within the meaning of Treasury Regulations Section 1.752-1(a)(2)), without
the consent of the General Partner, which may be withheld in its sole and absolute discretion.

     (e) Additional Prohibited Transfers. No Transfer by a Limited Partner of its Partnership
Units may be made to any Person if:

     (i) in the opinion the General Partner based on the advice of legal counsel, if
appropriate, it would adversely affect the ability of Landwin REIT to continue to qualify as
a REIT or would subject Landwin REIT to any additional taxes under Section 857 or Section
4981 of the Code;

     (ii) in the opinion of the General Partner based on the advice of legal counsel, if
appropriate, it would result in the Partnership being treated as an association taxable as a
corporation for federal income tax purposes;

     (iii) such Transfer would subject the Partnership to regulation under the Investment
Company Act of 1940, the Investment Advisers Act of 1940, as amended or ERISA;

     (iv) such Transfer is effectuated through an “established securities market” or a
“secondary market (or the substantial equivalent thereof)” within the meaning of Section
7704 of the Code or could otherwise cause the Partnership to be classified as a publicly
traded partnership within the meaning of Section 7704 of the Code; or

     (v) such Transfer is to a Prohibited Transferee.

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

     (g) Transfers by the Advisor. For so long as the Advisor remains the advisor to the
Partnership and Landwin REIT under the Advisory Agreement, neither the Advisor nor any Affiliate of
the Advisor (other than Landwin REIT) may Transfer any portion of the Partnership Units held by the
Advisor to any Person, other than (i) Transfers to any Affiliate of the Advisor, and (ii) deemed
Transfers to Landwin REIT pursuant to Section 8.6(c).

     11.4 Substituted Limited Partners

53

 

     (a) Consent of the General Partner. No Limited Partner shall have the right to substitute a
Permitted Transferee in such Limited Partner’s place. The General Partner shall, however, have the
right to consent to the admission of a Permitted Transferee of the Partnership Interest of a
Limited Partner pursuant to this Section 11.4 as a Substitute Limited Partner, which consent may be
given or withheld by the General Partner in its sole and absolute discretion. The General
Partner’s failure or refusal to permit such transferee to become a Substituted Limited Partner
shall not give rise to any cause of action against the Partnership or any Partner.

     (b) Rights of a Substituted Limited Partner. A transferee who has been admitted as a
Substituted Limited Partner in accordance with this Article 11 shall have all the rights and powers
and be subject to all the restrictions and liabilities of a Limited Partner under this Agreement.
The admission of any transferee as a Substituted Limited Partner shall be conditioned upon the
transferee executing and delivering to the Partnership an acceptance of all of the terms and
conditions of this Agreement, including, without limitation, the power of attorney granted in
Section 2.6, and such other documents or instruments as may be required in the reasonable
discretion of the General Partner in order to effect such Person’s admission as a Substituted
Limited Partner.

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

11.5 Assignees

     If the General Partner, in its sole and absolute discretion, does not consent to the admission
of any transferee as a Substituted Limited Partner, as described in Section 11.4(a), such
transferee shall be considered an Assignee for purposes of this Agreement. An Assignee shall be
deemed to have had assigned to it, and shall be entitled to receive distributions from the
Partnership and the share of Profit, Losses and any other items of gain, loss, deduction or credit
of the Partnership attributable to the Partnership Units assigned to such transferee, but shall not
be deemed to be a holder of Partnership Units for any other purpose under this Agreement except as
otherwise provided in this Agreement, and shall not be entitled to vote such Partnership Units in
any matter presented to the Limited Partners for a vote (such Partnership Units being deemed to
have been voted on such matter in the same proportion as all other Partnership Units held by
Limited Partners are voted). In the event any such transferee desires to make a further assignment
of any such Partnership Units, such transferee shall be subject to all of the provisions of this
Article 11 to the same extent and in the same manner as any Limited Partner desiring to make an
assignment of Partnership Units.

11.6 General Provisions

     (a) Withdrawal of a Limited Partner. No Limited Partner may withdraw from the Partnership
other than as a result of a Transfer of all of such Limited Partner’s Partnership Units

54

 

pursuant to which the transferee is admitted as a Substituted Limited Partner or a redemption
of all of the Partnership Units held by such Limited Partner pursuant to Section 8.6.

     (b) Termination of Status as a Limited Partner. Any Limited Partner that (i) Transfers all of
such Limited Partner’s Partnership Units (or other Partnership Interests) in a Transfer pursuant to
which the transferee is admitted as a Substituted Limited Partner, or (ii) redeems all of such the
Partnership Units held by such Limited Partner pursuant to Section 8.6 shall cease to be a Limited
Partner.

     (c) Allocations. If any Partnership Interest is Transferred during the Partnership’s Fiscal
Year in compliance with the provisions of this Article 11 (including Transfers to Landwin REIT
pursuant to Section 8.6(c)) on any day other than the first day of a Fiscal Year, then Profits,
Losses, each item thereof and all other items attributable to such Partnership Interest for such
Fiscal Year shall be divided and allocated between the transferor Partner and the transferee
Partner by taking into account their varying interests during the Fiscal Year in accordance with
Section 706(d) of the Code, using the interim closing of the books method (unless the General
Partner, in its sole and absolute discretion, elects to adopt a daily, weekly or monthly proration
period, in which event Profits, Losses, each item thereof and all other items attributable to such
transferred Partnership Interest for such Fiscal Year shall be prorated based upon the applicable
method selected by the General Partner).

     (d) Distributions. All distributions of Available Operating Cash, Net Capital Event Proceeds
or other Partnership Assets attributable to Partnership Units, with respect to which the
Partnership Record Date is before the date of a Transfer of such Partnership Units (including any
Transfer to Landwin REIT pursuant to Section 8.6(c), shall be made to the transferor Partner, and
all distributions of Available Operating Cash, Net Capital Event Proceeds or other Partnership
Assets thereafter attributable to such Partnership Units shall be made to the transferee Partner.

     (e) Capital Accounts. The original Capital Account established for each transferee shall be
in the same amount as the Capital Account or portion thereof of the Partner to which such
transferee succeeds, at the time such transferee is admitted to the Partnership. The Capital
Account of any Partner whose Percentage Interest shall be increased by means of the Transfer to it
of all or part of the Partnership Interest of another Partner shall be appropriately adjusted to
reflect such Transfer. Any reference in this Agreement to a Capital Contribution of, or
distribution to, a then-Partner shall include a Capital Contribution or distribution previously
made by or to any prior Partner on account of the Partnership Interest of such then-Partner.

     (f) Additional Restrictions. In addition to any other restrictions on transfer contained in
this Agreement, in no event may any Transfer of a Partnership Interest by any Partner or any
redemption pursuant to Section 8.6 be made without the express consent of the General Partner, in
its sole and absolute discretion, (i) to any person or entity who lacks the legal right, power or
capacity to own a Partnership Interest; (ii) in violation of applicable law; (iii) of any component
portion of a Partnership Interest, such as the Capital Account, or rights to distributions,
separate

55

 

and apart from all other components of a Partnership Interest; (iv) if in the opinion of the
General Partner based on the advice of legal counsel, if appropriate, such Transfer would cause a
termination of the Partnership for Federal or state income tax purposes (except as a result of a
redemption of all Partnership Units held by all Limited Partners); (v) if in the opinion of the
General Partner based on the advice of legal counsel, if appropriate, such Transfer would cause the
Partnership to cease to be classified as a partnership for Federal income tax purposes (except as a
result of a redemption of all Partnership Units held by all Limited Partners); (vi) if such
Transfer requires the registration of such Partnership Interest pursuant to any applicable federal
or state securities laws; (vii) if such Transfer would cause the Partnership to become a “publicly
traded partnership,” as such term is defined in Section 7704(b) of the Code (provided that this
clause (vii) shall not be the basis for limiting or restricting in any manner the exercise of the
Redemption Right under Section 8.6 unless, and only to the extent that, outside tax counsel advises
the General Partner that, in the absence of such limitation or restriction, there is a significant
risk that the Partnership will be treated as a “publicly traded partnership” and, by reason
thereof, taxable as a corporation); (viii) if such Transfer would cause Landwin REIT to actually or
constructively own 10% or more of the ownership interests of any tenant of a property held by the
Partnership within the meaning of Section 856(d)(2)(B) of the Code; (ix) if such Transfer would
result in Landwin REIT being “closely held” within the meaning of Section 856(h) of the Code; (x)
if in the opinion the General Partner based on the advice of legal counsel, if appropriate, such
Transfer would adversely affect the ability of Landwin REIT to continue to qualify as a REIT or
subject Landwin REIT to any additional taxes under Section 857 or Section 4981 of the Code or (xi)
if such Transfer would cause Landwin REIT to be owned by less than 100 persons.

ARTICLE XII

ADMISSION OF PARTNERS

     12.1 Admission of Successor General Partner

     A successor to all of the General Partner Interest pursuant to Article 11 hereof who is
proposed to be admitted as a successor General Partner shall be admitted to the Partnership as the
General Partner, effective immediately following the successor General Partner’s execution and
delivery to the Partnership of an acceptance of all of the terms and conditions of this Agreement
and such other documents or instruments as may be required or appropriate to effect such Person’s
admission as General Partner. In the case of such admission on any day other than the first day of
a Fiscal Year, all items attributable to the General Partner Interest for such Fiscal Year shall be
allocated between the transferring General Partner and such successor as provided in Section
11.6(c) hereof. Any such successor General Partner shall carry on the business of the Partnership
without dissolution.

     12.2 Admission of Additional Limited Partners

56

 

     (a) General. A Person other than the General Partner, the Advisor and the Initial Limited
Partner who makes a Capital Contribution to the Partnership in accordance with this Agreement shall
be admitted to the Partnership as an Additional Limited Partner only upon executing and delivering
to the General Partner:

     (i) evidence of acceptance in form satisfactory to the General Partner of all of the
terms and conditions of this Agreement, including, without limitation, the power of attorney
granted in Section 2.6 hereof; and

     (ii) such other documents or instruments as may be required in the discretion of the
General Partner in order to effect such Person’s admission as an Additional Limited Partner.

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

     (c) Allocations to Additional Limited Partners. If any Additional Limited Partner is admitted
to the Partnership on any day other than the first day of a Fiscal Year, then Profit, Losses, each
item thereof and all other items allocable among Partners and Assignees for such Fiscal Year shall
be allocated among such Additional Limited Partner and all other Partners and Assignees by taking
into account their varying interests during the Fiscal Year in accordance with Section 706(d) of
the Code, using the interim closing of the books method. Solely for purposes of making such
allocations, each of such items for the calendar month in which an admission of any Additional
Limited Partner occurs shall be allocated among all of the Partners and Assignees, including such
Additional Limited Partner.

     12.3 Amendment of Agreement and Certificate of Limited Partnership

     For the admission to the Partnership of any Partner, the General Partner shall take all steps
necessary and appropriate under the Act to amend the records of the Partnership and, if necessary,
to prepare as soon as practical an amendment of this Agreement (including an amendment of Exhibit
A) and, if required by law, shall prepare and file an amendment to the Certificate and may for this
purpose exercise the power of attorney granted pursuant to Section 2.6 hereof.

ARTICLE XIII

DISSOLUTION, LIQUIDATION AND TERMINATION

57

 

     13.1 Dissolution

     The Partnership shall not be dissolved by the admission of Substituted Limited Partners or
Additional Limited Partners or by the admission of a successor General Partner in accordance with
the terms of this Agreement. Subject to Section 13.1(b), upon the withdrawal of the General
Partner, any successor General Partner shall continue the business of the Partnership. The
Partnership shall dissolve, and its affairs shall be wound up, only upon the first to occur of any
of the following (“Liquidating Events”):

     (a) the expiration of its term as provided in Section 2.5 hereof;

     (b) an event of withdrawal of the General Partner, as defined in the Act (other than an event
of bankruptcy), unless, within ninety (90) days after such event of withdrawal, a “majority in
interest” (as defined below) of the remaining Partners Consent in writing to continue the business
of the Partnership and to the appointment, effective as of the date of withdrawal, of a successor
General Partner;

     (c) an election to dissolve the Partnership made by the General Partner, in its sole and
absolute discretion;

     (d) entry of a decree of judicial dissolution of the Partnership pursuant to the provisions of
the Act;

     (e) the occurrence of a Terminating Capital Transaction; or

     (f) a final and non-appealable judgment is entered by a court of competent jurisdiction ruling
that the General Partner or the Partnership is bankrupt or insolvent, or a final and non-appealable
order for relief is entered by a court with appropriate jurisdiction against the General Partner or
the Partnership, in each case under any federal or state bankruptcy or insolvency laws as now or
hereafter in effect, unless prior to the entry of such order or judgment a “majority in interest”
(as defined below) of the remaining Partners Consent in writing to continue the business of the
Partnership and to the appointment, effective as of a date prior to the date of such order or
judgment, of a substitute General Partner, if applicable.

     As used in this Article 13, a “majority in interest” shall refer to Partners (excluding the
General Partner) who hold Partnership Units that constitute more than fifty percent (50%) of the
aggregate number of outstanding Partnership Units not held by the General Partner.

     13.2 Winding Up; Liquidation

     (a) Upon dissolution of the Partnership, the business and affairs of the Partnership shall be
wound up as provided in this Section 13.2. The General Partner shall act as the “Liquidator” (or,
in the event there is no remaining General Partner, any Person elected by Limited Partners holding
more than 50% of the total number of Partnership Units then issued and

58

 

outstanding). The Liquidator shall wind up the affairs of the Partnership, shall dispose of
such Partnership Assets as it deems necessary or appropriate and shall pay and distribute the
assets of the Partnership, including the proceeds of any such disposition, as follows:

     (i) first, to creditors, including Partners who are creditors, to the extent otherwise
permitted by law, in satisfaction of liabilities of the Partnership (whether by payment or
by establishment or reserves as determined by the Liquidator in its sole discretion), other
than distributions to Partners pursuant to Article 5, and

     (ii) second, to the Partners in accordance with their positive Capital Account
balances.

     It is intended that such distributions will result in the Partners receiving aggregate
distributions in the order of and equal to the amount of distributions that would have been
received if the liquidating distributions were made in accordance with Section 5.1.
However, if the balances in the Capital Accounts do not result in such intention being
satisfied, items of Profits and Losses will be reallocated among the Partners for the Fiscal
Year of the liquidation (and, at the election of the General Partner, if necessary and
permissible, prior Fiscal Years) so as to cause the balances in the Capital Accounts to be
in the amounts necessary to assure that such result is achieved. Notwithstanding anything
herein to the contrary, in the event the Partnership is liquidated within the meaning of
Treasury Regulation §§ 1.704-1(b)(2)(ii)(g), liquidation distributions shall be made by the
end of the taxable year in which the Partnership liquidates or, if later, within ninety (90)
days of the date of such liquidation.

     (b) In the discretion of the Liquidator, a pro rata portion of the distributions that would
otherwise be made to the Partners pursuant to this Article 13 may be:

     (i) distributed to a trust established for the benefit of the General Partner and
Limited Partners for the purposes of liquidating Partnership assets, collecting amounts owed
to the Partnership, and paying any contingent or unforeseen liabilities or obligations of
the Partnership or the General Partner arising out of or in connection with the Partnership;
the assets of any such trust shall be distributed to the General Partner and Limited
Partners from time to time, in the reasonable discretion of the Liquidator, in the same
proportions as the amount distributed to such trust by the Partnership would otherwise have
been distributed to the General Partner and Limited Partners pursuant to this Agreement; or

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

59

 

     (c) The Liquidator shall, in its sole discretion, determine whether to sell any Partnership
Assets, including, without limitation, Real Estate Assets, and if so, whether at a public or
private sale, for what price and on what terms. If the Liquidator determines to sell or otherwise
dispose of any Partnership Asset or any interest therein, the Liquidator shall do so expeditiously
and for its fair market value under the circumstances, giving due regard to the activity and
condition of the relevant market and general financial and economic conditions. If the Liquidator
determines not to sell or otherwise dispose of any Partnership Asset or any interest therein, the
Liquidator shall not be required to distribute the same to the Partners promptly but shall have
full right and discretion to determine the time and manner of such distribution and distributions
giving due regard to the interests of the Partners.

     13.3 No Obligation to Contribute Deficit

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

     13.4 Notice of Dissolution

     In the event a Liquidating Event occurs or an event occurs that would, but for the provisions
of an election or objection by one or more Partners pursuant to Section 13.1, result in a
dissolution of the Partnership, the General Partner shall, within thirty (30) days thereafter,
provide written notice thereof to each of the Partners.

     13.5 Termination of Partnership and Cancellation of Certificate of Limited Partnership

     Upon the completion of the liquidation of the Partnership’s assets, as provided in Section
13.2 hereof, the Partnership shall be terminated, a certificate of cancellation shall be filed, and
all qualifications of the Partnership as a foreign limited partnership in jurisdictions other than
the state of Delaware shall be canceled and such other actions as may be necessary to terminate the
Partnership shall be taken.

     13.6 Reasonable Time for Winding-Up

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

     13.7 Waiver of Partition

60

 

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

ARTICLE XIV

AMENDMENT OF PARTNERSHIP AGREEMENT; MEETINGS

     14.1 Amendments

     (a) By the General Partner. The General Partner shall have the power, without the consent of
the Limited Partners, to amend this Agreement except as set forth in Section 14.1(b) hereof. The
General Partner shall provide notice to the Limited Partners when any action under this Section
14.1(a) is taken in the next regular communication to the Limited Partners. The Limited Partners
shall not have the power to amend this Agreement.

     (b) Restrictions on General Partner’s Ability to Amend this Agreement. Notwithstanding
Section 14.1(a) hereof, this Agreement shall not be amended with respect to any Partner adversely
affected without the Consent of such Partner adversely affected if such amendment would:

     (i) convert a Limited Partner’s interest in the Partnership into a General Partner
Interest;

     (ii) impose on the Limited Partners any obligation to make additional Capital
Contributions to the Partnership;

     (iii) modify the limited liability of a Limited Partner in a manner adverse to such
Limited Partner; or

     (iv) amend this Section 14.1(b).

     14.2 Meetings of the Partners

     (a) General. Meetings of the Partners may be called by the General Partner and shall be
called upon the receipt by the General Partner of a written request by Limited Partners holding 25
percent or more of the Partnership Interests. The request shall state the nature of the business
to be transacted. Notice of any such meeting shall be given to all Partners not less than seven
(7) days nor more than thirty (30) days prior to the date of such meeting. Partners may vote in
person or by proxy at such meeting.

     (b) Vote Required. Whenever the vote or Consent of the Partners is permitted or required
under this Agreement, such vote or Consent may be given at a meeting of the Partners or may be
given in accordance with the procedure prescribed in Section 14.2(c) hereof. Except as otherwise
expressly provided in this Agreement, the Consent of holders of Partnership Units that constitute
more than fifty percent (50%) of the aggregate number of outstanding Partnership

61

 

Units held by the Partners (including the General Partner) shall constitute the consent of the
Partners.

     (c) Action Without a Meeting. Any action required or permitted to be taken at a meeting of
the Partners may be taken without a meeting if a written consent setting forth the action so taken
is signed by holders of Partnership Units that constitute more than fifty percent (50%) (or such
other percentage as is expressly required by this Agreement) of the aggregate number of outstanding
Partnership Units held by the Partners (including the General Partner). Such consent may be in one
instrument or in several instruments, and shall have the same force and effect as a vote the
holders of Partnership Units that constitute more than fifty percent (50%) (or such other
percentage as is expressly required by this Agreement) of the aggregate number of outstanding
Partnership Units held by the Partners (including the General Partner). Such consent shall be
filed with the General Partner. An action so taken shall be deemed to have been taken at a meeting
held on the effective date of the consent as certified by the General Partner.

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

     (e) Conduct of Meeting. Each meeting of the Partners shall be conducted by the General
Partner or such other Person as the General Partner may appoint pursuant to such rules for the
conduct of the meeting as the General Partner or such other Person deems appropriate. Meetings of
Partners may be conducted in the same manner as meetings of the stockholders of Landwin REIT and
may be held at the same time, and as part of, meetings of the stockholders of Landwin REIT.

ARTICLE XV

GENERAL PROVISIONS

     15.1 Addresses and Notice

     Any notice, demand, request or report required or permitted to be given or made to a Partner
or Assignee under this Agreement shall be in writing and shall be deemed given or made when
delivered if delivered in person, sent by first class United States mail, by overnight delivery or
via facsimile to the Partner or Assignee at the address set forth in Exhibit A or such other
address of which the Partner shall notify the General Partner in writing. Notwithstanding the
foregoing, the General Partner may elect to deliver any such notice, demand, request or

62

 

report by E-mail or by any other electronic means, in which case such communication shall be
deemed given or made one day after being sent.

     15.2 Titles and Captions

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

     15.3 Pronouns and Plurals

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

     15.4 Further Action

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

     15.5 Binding Effect

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

     15.6 Creditors

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

     15.7 Waiver

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

     15.8 Counterparts

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

63

 

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

     15.9 Applicable Law

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

     15.10 Invalidity of Provisions

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

     15.11 Merger

     Subject to Section 11.2, the Partnership may merge with, or consolidate into, any Person or
Entity in accordance with Section 17-211 of the Act.

     15.12 No Rights as Stockholders

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

     15.13 Entire Agreement

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

[SIGNATURE PAGE FOLLOWS]

64

 

     IN WITNESS WHEREOF, the parties hereto have executed and delivered this Amended and Restated
Agreement of Limited Partnership as of the day and year first-above written.

	 	 	 	 	 	 	 	 	 
	 	 	GENERAL PARTNER:
	 
	 	 	 	 	 	 	 	 
	 	 	LANDWIN, LLC	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	By:	 	 	 	 	 	 
	 

	 	 	 	 	 	 	 	 
	 

	 	Name:	 	 	 	 	 	 
	 

	 	 	 	 	 	 	 	 
	 

	 	Title:	 	 	 	 	 	 
	 

	 	 	 	 	 	 	 	 

	 	 	 	 	 	 	 
	 	 	LIMITED PARTNER:
	 
	 	 	 	 	 	 
	 	 	LANDWIN REIT, INC.
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	Name:	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	Title:	 	 	 	 
	 

	 	 	 	 	 	 

	 	 	 	 	 	 	 
	 	 	LANDWIN ADVISORS, LLC
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	Name:	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	Title:	 	 	 	 
	 

	 	 	 	 	 	 

65

 

Corporate/Limited Liability Company Additional Limited Partner

Signature Page to Amended and Restated Agreement of Limited Partnership

of Landwin, L.P., by and among the undersigned and the other parties thereto.

	 	 	 	 	 
	Dated  _______________, 200 __        	LIMITED PARTNER: 

[Name of Corporation/LLC]

 	 
	 	By:  	 	 
	 
	 	Name:  	 	 
	 
	 	Title:  	 	 
	 

66

 

Partnership Additional Limited Partner Signature Page to Amended and Restated

Agreement of Limited Partnership of Landwin, L.P., by and among

the undersigned and the other parties thereto.

	 	 	 	 	 
	Dated  _______________, 200__             	LIMITED PARTNER: 

[Name of Partnership]

 

 	 
	 	By:  	 	 
	 
	 	Name:  	 	 
	 
	 	Title:  	 	 
	 

67

 

Individual Additional Limited Partner Signature Page to Amended and Restated

Agreement of Limited Partnership of Landwin, L.P., by and among

the undersigned and the other parties thereto.

	 	 	 	 	 
	Dated  _______________, 200__             	LIMITED PARTNER: 
 
[Name
of Individual]

	 
	 	 	 
	 	 	 
	 	 	 

68

 

Exhibit A

Partners’ Contributions and Partnership Interests

	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	Number of	 	 	 	 
	 	 	 	 	 	 	Capital	 	 	Partnership	 	 	Percentage	 
	Name and Address of Partner	 	Type of Interest	 	 	Contribution	 	 	Units	 	 	Interest	 
	Landwin, LLC
	 	General Partnership	 	$	2,000	 	 	 	200	 	 	 	0.99	%
	 
	 	Interest	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Landwin REIT, Inc.
	 	Limited Partnership	 	$	198,000	 	 	 	19,800	 	 	 	98.02	%
	 
	 	Interest	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Landwin Advisors, LLC
	 	Limited Partnership	 	$	2,000	 	 	 	200	 	 	 	0.99	%
	 
	 	Interest	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	TOTAL
	 	 	 	 	 	$	202,000	 	 	 	20,200	 	 	 	100.0	%

69

 

Exhibit B

NOTICE OF REDEMPTION REQUEST

     The undersigned Limited Partner hereby irrevocably (i) requests that Landwin, L.P. (the
“Partnership”) redeem Partnership Units in the Partnership held by such Limited Partner in
accordance with the terms of the Amended and Restated Agreement of Limited Partnership of the
Partnership (the “Partnership Agreement”) and the Redemption Right referred to therein; (ii) agrees
to surrender such Partnership Units and all right, title, and interest therein promptly upon
payment of the Redemption Amount; (iii) directs that the Redemption Amount deliverable upon
exercise of the Redemption Right be delivered to such Limited Partner at the address as specified
in the Partnership Agreement; and (iv) directs that, if it is determined that the Redemption Amount
shall be the REIT Stock Amount, the REIT Stock be registered or placed in the name of such Limited
Partner and at such address specified in the Partnership Agreement. The undersigned hereby
represents, warrants, and certifies that the undersigned (a) has not transferred or encumbered
title to such Partnership Units; (b) has the full right, power and authority to redeem and
surrender such Partnership Units as provided herein; and (c) has obtained the consent or approval
of all Persons, if any, having the right to consent or approve such redemption and surrender.

     Dated: _________

	 	 	 	 	 	 	 
	 	 	[Name of Limited Partner]
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	Name:	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	Title:	 	 	 	 
	 

	 	 	 	 	 	 

70exv4w4xby

 

REGISTRATION RIGHTS AGREEMENT

Dated as of November 7, 2005

by and among

Rural Cellular Corporation

as Issuer

and

Lehman Brothers Inc.

and

Morgan Stanley & Co. Incorporated

as the Initial Purchasers

 

 

          This Registration Rights Agreement (this “Agreement”) is dated as of November 7, 2005, by and
among Rural Cellular Corporation, a Minnesota corporation (the “Company”) and Lehman Brothers Inc.
and Morgan Stanley & Co. Incorporated (each, an “Initial Purchaser” and, collectively, the “Initial
Purchasers”), each of whom has agreed to purchase the $175,000,000 in aggregate principal amount of
the Company’s floating rate senior subordinated floating rate notes due 2012 (the “Securities”)
pursuant to the Purchase Agreement (as defined below).

          This Agreement is made pursuant to the Purchase Agreement, dated as of November 1, 2005 (the
"Purchase Agreement”), by and among the Company and the Initial Purchasers. In order to induce the
Initial Purchasers to purchase the Securities, the Company has agreed to provide the registration
rights set forth in this Agreement. The execution and delivery of this Agreement is a condition to
the obligations of the Initial Purchasers set forth in Section 5 of the Purchase Agreement.
Capitalized terms used herein and not otherwise defined shall have the meanings assigned to them in
the Indenture, dated the date hereof (the “Indenture”), among the Company and Wells Fargo Bank,
National Association, as Trustee (the “Trustee”), relating to the Securities and the Exchange
Securities (as defined below).

          The parties hereby agree as follows:

SECTION 1. DEFINITIONS

          As used in this Agreement, the following capitalized terms shall have the following meanings:

          Act: The U.S. Securities Act of 1933.

          Affiliate: As defined in Rule 144 of the Act.

          Broker-Dealer: Any broker or dealer registered under the Exchange Act.

          Closing Date: The date of this Agreement.

          Commission: The U.S. Securities and Exchange Commission.

          Consummate: An Exchange Offer shall be deemed “Consummated” for purposes of this Agreement
upon the occurrence of (a) the filing and effectiveness under the Act of the Exchange Offer
Registration Statement relating to the Exchange Securities to be issued in the Exchange Offer, (b)
the maintenance of such Exchange Offer Registration Statement continuously effective and the
keeping of the Exchange Offer open for a period not less than the minimum period required pursuant
to Section 3(b) hereof and (c) the delivery by the Company to the Registrar under the Indenture of
Exchange Securities in the same aggregate principal amount as the aggregate principal amount of
Securities of like class tendered by Holders thereof pursuant to the Exchange Offer.

          Consummation Deadline: As defined in Section 3(b) hereof.

 

 

2

          Effectiveness Deadline: As defined in Section 3(a) and 4(a) hereof.

          Exchange Act: The U.S. Securities Exchange Act of 1934.

          Exchange Offer: The offer to exchange Exchange Securities (whose issuance shall be registered
pursuant to the Exchange Offer Registration Statement) for a like outstanding principal amount of
Securities that are tendered by the Holders thereof.

          Exchange Offer Registration Statement: The Registration Statement relating to the Exchange
Offer, including the related Prospectus.

          Exempt Resales: The transactions in which the Initial Purchasers propose to sell the
Securities to certain “qualified institutional buyers,” as such term is defined in Rule 144A under
the Act, and pursuant to Regulation S under the Act.

          Exchange Securities: The Company’s senior subordinated floating rate notes due 2012, whose
issuance is registered under the Act, to be issued pursuant to the Indenture (a) in the Exchange
Offer or (b) as contemplated by Section 4 hereof.

          Filing Deadline: As defined in Sections 3(a) and 4(a) hereof.

          Holders: As defined in Section 2 hereof.

          Interest Payment Date: Each February 1, May 1, August 1 and November 1, commencing February
1, 2006.

          Person: As defined in the Indenture.

          Prospectus: The prospectus included in a Registration Statement at the time such Registration
Statement is declared effective, as amended or supplemented by any prospectus supplement and by all
other amendments thereto, including post-effective amendments, and all material incorporated by
reference into such Prospectus.

          Recommencement Date: As defined in Section 6(e) hereof.

          Registration Default: As defined in Section 5 hereof.

          Registration Statement: Any registration statement of the Company relating to (a) an offering
of Exchange Securities pursuant to an Exchange Offer or (b) the registration for resale of Transfer
Restricted Securities pursuant to the Shelf Registration Statement, in each case (i) that is filed
pursuant to the provisions of this Agreement and (ii) including the Prospectus included therein,
all amendments and supplements thereto (including post-effective amendments) and all exhibits and
material incorporated by reference therein.

          Regulation S: Regulation S promulgated under the Act.

          Rule 144: Rule 144 promulgated under the Act.

 

 

3

          Shelf Registration Statement: As defined in Section 4(a) hereof.

          Suspension Notice: As defined in Section 6(e) hereof.

          TIA: The U.S. Trust Indenture Act of 1939 (15 U.S.C. Section 77aaa-77bbbb) as in effect on
the date of the Indenture.

          Transfer Restricted Securities: Each Security, until the earliest to occur of (a) the date on
which such Security has been exchanged by a Person other than a Broker-Dealer for an Exchange
Security in the Exchange Offer, (b) following the exchange by a Broker-Dealer in the Exchange Offer
of a Security for an Exchange Security, the date on which such Exchange Security is sold to a
purchaser who receives from such Broker-Dealer on or prior to the date of such sale a copy of the
Prospectus contained in the Exchange Offer Registration Statement, (c) the date on which such
Security has been effectively registered under the Act and disposed of in accordance with the Shelf
Registration Statement, (d) the date on which such Security is distributed to the public pursuant
to Rule 144 under the Act, or is saleable pursuant to Rule 144(k) under the Act (or similar
provision then in effect), or (e) the date on which such Security ceases to be outstanding;
provided, however, that for purposes of this Agreement (other than Section 9 hereof), Securities
with respect to which the Company has caused to be filed and declared effective an Exchange Offer
Registration Statement and has Consummated an Exchange Offer, in each case pursuant to and in
accordance with Section 3 hereof, and which have not been tendered by the date such Exchange Offer
is Consummated by the holder thereof shall not be deemed to be Transfer Restricted Securities,
except to the extent the holder thereof provides the notice contemplated by Section 4(a)(ii).

          Underwritten Registration or Underwritten Offering: A registration in which securities of the
Company are sold to an underwriter for reoffering to the public.

SECTION 2. HOLDERS

          A Person is deemed to be a holder of Transfer Restricted Securities (each, a “Holder”)
whenever such Person owns Transfer Restricted Securities.

SECTION 3. REGISTERED EXCHANGE OFFER

          (a) Unless the Exchange Offer shall not be permitted by applicable law or Commission policy
(after the procedures set forth in Section 6(a)(iii)(A) below have been complied with), the Company
shall (i) cause the Exchange Offer Registration Statement to be filed with the Commission on or
prior to 180 days after the Closing Date (the “Filing Deadline”), (ii) use its commercially
reasonable efforts to cause such Exchange Offer Registration Statement to become effective on or
prior to 60 days after the Exchange Offer Registration Statement is filed (the “Effectiveness
Deadline”), (iii) in connection with the foregoing, (A) file all pre-effective amendments to such
Exchange Offer Registration Statement as may be reasonably necessary in order to cause it to become
effective, (B) file, if applicable, a post-effective amendment to such Exchange Offer Registration
Statement pursuant to Rule 430A under the Act and (C) cause all necessary filings, if any, in
connection with the registration and qualification of the

 

 

4

Exchange Securities to be made under the Blue Sky laws of such jurisdictions as are necessary
to permit Consummation of the Exchange Offer, and (iv) upon the effectiveness of such Exchange
Offer Registration Statement, commence, and use its commercially reasonable efforts to Consummate,
the Exchange Offer. The Exchange Offer shall be on the appropriate form permitting (I)
registration of the Exchange Securities to be offered in exchange for the Securities that are
Transfer Restricted Securities and (II) resales of Exchange Securities by Broker-Dealers that
tendered into the Exchange Offer Securities that such Broker-Dealer acquired for its own account as
a result of market making activities or other trading activities (other than Securities acquired
directly from the Company or any Affiliate of the Company) as contemplated by Section 3(c) below.

          (b) The Company shall use its commercially reasonable efforts to cause the Exchange Offer
Registration Statement to be effective continuously and shall keep the Exchange Offer open for a
period of not less than the minimum period required under applicable federal and state securities
laws to Consummate the Exchange Offer; provided, however, that in no event shall such period be
less than 20 Business Days. The Company shall cause the Exchange Offer to comply with all
applicable federal and state securities laws. No securities other than the Exchange Securities
shall be included in the Exchange Offer Registration Statement. The Company shall use its
commercially reasonable efforts to cause the Exchange Offer to be Consummated no later than 30
Business Days thereafter (the “Consummation Deadline”).

          (c) The Company shall include a “Plan of Distribution” section in the Prospectus contained in
the Exchange Offer Registration Statement and indicate therein that any Broker-Dealer who holds
Transfer Restricted Securities that were acquired for the account of such Broker-Dealer as a result
of market-making activities or other trading activities (other than Transfer Restricted Securities
acquired directly from the Company or any Affiliate of the Company), may exchange such Transfer
Restricted Securities pursuant to the Exchange Offer. Such “Plan of Distribution” section shall
also contain all other information with respect to such sales by such Broker-Dealers that the
Commission may require in order to permit such sales pursuant thereto, but such “Plan of
Distribution” shall not name any such Broker-Dealer or disclose the amount of Transfer Restricted
Securities held by any such Broker-Dealer, except to the extent required by the Commission as a
result of a change in policy, rules or regulations after the date of this Agreement.

          Because such a Broker-Dealer may be deemed to be an “underwriter” within the meaning of the
Act and must, therefore, deliver a prospectus meeting the requirements of the Act in connection
with its initial sale of any Exchange Securities received by such Broker-Dealer in the Exchange
Offer, the Company shall permit the use of the Prospectus contained in the Exchange Offer
Registration Statement by such Broker-Dealer to satisfy such prospectus delivery requirement. To
the extent necessary to ensure that the prospectus contained in the Exchange Offer Registration
Statement is available for sales of Exchange Securities by Broker-Dealers, the Company agrees to
use its commercially reasonable efforts to keep the Exchange Offer Registration Statement
continuously effective, supplemented, amended and current as required by and subject to

 

 

5

the provisions of Section 6(a) and (c) hereof and in conformity with the requirements of this
Agreement, the Act and the policies, rules and regulations of the Commission as announced from time
to time, for a period of one year from the date on which the Exchange Offer is Consummated or such
shorter period as will terminate when all Transfer Restricted Securities covered by such
Registration Statement have been sold pursuant thereto. The Company shall provide sufficient
copies of the latest version of such Prospectus to such Broker-Dealers, promptly upon request, at
any time during such period.

SECTION 4. SHELF REGISTRATION

          (a) Shelf Registration. If (i) the Exchange Offer Registration Statement is not
required to be filed or the Exchange Offer is not permitted by applicable law or Commission policy
(after the Company has complied with the procedures set forth in Section 6(a)(iii)(A) hereof) or
(ii) any Holder of Transfer Restricted Securities shall notify the Company within 20 Business Days
following the Consummation of the Exchange Offer that (A) such Holder was prohibited by applicable
law or Commission policy from participating in the Exchange Offer, (B) such Holder may not resell
the Exchange Securities acquired by it in the Exchange Offer to the public without delivering a
prospectus and the Prospectus contained in the Exchange Offer Registration Statement is not
appropriate or available for such resales by such Holder or (C) such Holder is a Broker-Dealer and
holds Securities acquired directly from the Company or any Affiliate of the Company, then the
Company shall:

               (I) cause to be filed, on or prior to 180 days after the earlier of (x) the date on which the
Company determines that the Exchange Offer Registration Statement cannot be filed as a result of
clause (a)(i) of this Section and (y) the date on which the Company receives the notice specified
in clause (a)(ii) of this Section (such earlier date, the “Filing Deadline”), a shelf registration
statement pursuant to Rule 415 under the Act (which may be an amendment to the Exchange Offer
Registration Statement (in either event, the “Shelf Registration Statement”)), relating to all
Transfer Restricted Securities; and

               (II) use its commercially reasonable efforts to cause such Shelf Registration Statement to be
declared effective on or prior to 60 days after the Filing Deadline for the Shelf Registration
Statement (the “Effectiveness Deadline”).

          If, after the Company has filed an Exchange Offer Registration Statement that satisfies the
requirements of Section 3(a) above, the Company is required to file and make effective a Shelf
Registration Statement solely because the Exchange Offer is not permitted under applicable law or
Commission policy, then the filing of the Exchange Offer Registration Statement shall be deemed to
satisfy the requirements of clause (I) above; provided that, in such event, the Company shall
remain obligated to meet the Effectiveness Deadline in the manner set forth in clause (II) above.

          To the extent necessary to ensure that the Shelf Registration Statement is available for sales
of Transfer Restricted Securities by the Holders thereof entitled to the

 

 

6

benefit of this Section 4(a) and the other securities required to be registered therein
pursuant to Section 6(b)(ii) hereof, the Company shall use its commercially reasonable efforts to
keep any Shelf Registration Statement required by this Section 4(a) continuously effective,
supplemented, amended and current as required by and subject to the provisions of Sections 6(b) and
(c) hereof and in conformity with the requirements of this Agreement, the Act and the policies,
rules and regulations of the Commission as announced from time to time, for a period of at least
two years (as extended pursuant to Section 6(c)(i) hereof) following the Closing Date, or such
shorter period as will terminate when all Transfer Restricted Securities covered by such Shelf
Registration Statement have been sold pursuant thereto.

          (b) Provision by Holders of Certain Information in Connection with the Shelf Registration
Statement. No Holder of Transfer Restricted Securities may include any of its Transfer
Restricted Securities in any Shelf Registration Statement pursuant to this Agreement unless and
until such Holder furnishes to the Company in writing, within 20 days after receipt of a request
therefor, the information specified in Item 507 or 508 of Regulation S-K, as applicable, of the Act
for use in connection with any Shelf Registration Statement or Prospectus or preliminary Prospectus
included therein. No Holder of Transfer Restricted Securities shall be entitled to liquidated
damages pursuant to Section 5 hereof unless and until such Holder shall have provided all such
information. By its acceptance of Transfer Restricted Securities, each Holder agrees to promptly
furnish additional information required to be disclosed in order to make the information previously
furnished to the Company by such Holder not materially misleading.

SECTION 5. LIQUIDATED DAMAGES

          If (a) any Registration Statement required by this Agreement is not filed with the Commission
on or prior to the applicable Filing Deadline, (b) any such Registration Statement has not been
declared effective by the Commission on or prior to the applicable Effectiveness Deadline, (c) the
Exchange Offer has not been Consummated on or prior to the Consummation Deadline or (d) any
Registration Statement required by this Agreement is filed and declared effective but shall
thereafter cease to be effective or fail to be usable for its intended purpose during the periods
in which it is required to be effective pursuant to Section 3 or 4 without being succeeded within
two Business Days by a post-effective amendment to such Registration Statement that cures such
failure and that is itself declared effective within five Business Days after filing such
post-effective amendment to such Registration Statement (each such event referred to in clauses (a)
through (d), a “Registration Default”), then the Company hereby agrees to pay to each Holder of
Transfer Restricted Securities affected thereby liquidated damages in an amount equal to $0.05 per
week per $1,000 in principal amount of Transfer Restricted Securities held by such Holder for the
first 90-day period immediately following the occurrence of such Registration Default. The amount
of the liquidated damages shall increase by an additional $0.05 per week per $1,000 in principal
amount of Transfer Restricted Securities with respect to each subsequent 90-day period until all
Registration Defaults have been cured, up to a maximum amount of liquidated damages of $0.50 per
week per $1,000 in principal amount of Transfer Restricted

 

 

7

Securities; provided that the Company shall in no event be required to pay liquidated damages
for more than one Registration Default at any given time. Notwithstanding anything to the contrary
set forth herein, (i) upon filing of the Exchange Offer Registration Statement (and/or, if
applicable, the Shelf Registration Statement), in the case of (a) above, (ii) upon the
effectiveness of the Exchange Offer Registration Statement (and/or, if applicable, the Shelf
Registration Statement), in the case of (b) above, (iii) upon Consummation of the Exchange Offer,
in the case of (c) above, or (iv) upon the filing of a post-effective amendment to the Registration
Statement or an additional Registration Statement that causes the Exchange Offer Registration
Statement (and/or, if applicable, the Shelf Registration Statement) to again be declared effective
or made usable, in the case of (d) above, the liquidated damages payable with respect to the
Transfer Restricted Securities as a result of such clause (a), (b), (c) or (d), as applicable,
shall cease to accrue.

          All accrued liquidated damages shall be paid to the Holders of a class of Transfer Restricted
Securities entitled thereto, in the manner provided for the payment of interest in the Indenture,
on each Interest Payment Date for such class of Transfer Restricted Securities, as more fully set
forth in the Indenture and the Securities and the Exchange Securities. Notwithstanding the fact
that any securities for which liquidated damages are due cease to be Transfer Restricted
Securities, all obligations of the Company to pay liquidated damages with respect to securities
shall survive until such time as such obligations with respect to such securities shall have been
satisfied in full.

SECTION 6. REGISTRATION PROCEDURES

          (a) Exchange Offer Registration Statement. In connection with the Exchange Offer, the
Company shall (i) comply with all applicable provisions of Section 6(c) below, (ii) use its
commercially reasonable efforts to effect such exchange and to permit the resale of Exchange
Securities by any Broker-Dealer that tendered Securities in the Exchange Offer that such
Broker-Dealer acquired for its own account as a result of its market-making activities or other
trading activities (other than Securities acquired directly from the Company or any Affiliate of
the Company) being sold in accordance with the intended method or methods of distribution thereof,
and (iii) comply with all of the following provisions:

     (A) If, following the date hereof, there has been announced a change in Commission
policy with respect to exchange offers such as the Exchange Offer that in the reasonable
opinion of counsel to the Company raises a substantial question as to whether the Exchange
Offer is permitted by applicable federal law or Commission policy, the Company hereby
agrees to seek a no-action letter or other favorable decision from the Commission allowing
the Company to Consummate an Exchange Offer for such Transfer Restricted Securities. The
Company hereby agrees to pursue the issuance of such a decision to the Commission staff
level. In connection with the foregoing, the Company hereby agrees to take all such other
actions as may be requested by the Commission or otherwise required in connection with the
issuance of such decision, including without limitation (I) participating in telephonic
conferences with the

 

 

8

Commission staff, (II) delivering to the Commission staff an analysis prepared by
counsel to the Company setting forth the legal bases, if any, upon which such counsel has
concluded that such an Exchange Offer should be permitted and (III) diligently pursuing a
resolution (which need not be favorable) by the Commission staff.

     (B) As a condition to its participation in the Exchange Offer, each Holder of Transfer
Restricted Securities (including, without limitation, any Holder who is a Broker-Dealer)
shall furnish, upon the request of the Company prior to the Consummation of the Exchange
Offer, a written representation to the Company (which may be contained in the letter of
transmittal contemplated by the Exchange Offer Registration Statement) to the effect that
(I) it is not an Affiliate of the Company, (II) it is not engaged in, and does not intend
to engage in, and has no arrangement or understanding with any person to participate in, a
distribution of the Exchange Securities to be issued in the Exchange Offer, (III) it is
acquiring the Exchange Securities in its ordinary course of business and (IV) such other
representations as may be necessary under applicable Commission rules, regulations or
interpretations. Each Holder using the Exchange Offer to participate in a distribution of
the Exchange Securities will be required to acknowledge and agree that, if the resales are
of Exchange Securities obtained by such Holder in exchange for Securities acquired directly
from the Company or an Affiliate thereof, it (1) could not, under Commission policy as in
effect on the date of this Agreement, rely on the position of the Commission enunciated in
Morgan Stanley and Co., Inc. (available June 5, 1991) and Exxon Capital
Holdings Corporation (available May 13, 1988), as interpreted in the Commission’s
letter to Shearman & Sterling dated July 2, 1993, and similar no-action letters
(including, if applicable, any no-action letter obtained pursuant to clause (A) above), and
(2) must comply with the registration and prospectus delivery requirements of the Act in
connection with a secondary resale transaction and that such a secondary resale transaction
must be covered by an effective registration statement containing the selling security
holder information required by Item 507 or 508, as applicable, of Regulation S-K.

     (C) Prior to effectiveness of the Exchange Offer Registration Statement, the Company
shall provide a supplemental letter to the Commission (I) stating that the Company is
registering the Exchange Offer in reliance on the position of the Commission enunciated in
Exxon Capital Holdings Corporation (available May 13, 1988), Morgan Stanley and
Co., Inc. (available June 5, 1991), as interpreted in the Commission’s letter to
Shearman & Sterling dated July 2, 1993, and, if applicable, any no-action letter
obtained pursuant to clause (A) above, (II) including a representation that the Company has
not entered into any arrangement or understanding with any Person to distribute the
Exchange Securities to be received in the Exchange Offer and that, to the best of the
Company’s information and belief, each Holder participating in the Exchange Offer is
acquiring the Exchange Securities in its ordinary course of business and has no arrangement
or understanding with any Person to participate in the distribution of the Exchange
Securities received in the Exchange Offer and

 

 

9

     (III) any other undertaking or representation required by the Commission as set forth
in any no-action letter obtained pursuant to clause (A) above, if applicable.

          (b) Shelf Registration Statement. In connection with the Shelf Registration
Statement, the Company shall:

               (i) comply with all the provisions of Section 6(c) and (d) below and use its commercially
reasonable efforts to effect such registration to permit the sale of the Transfer Restricted
Securities being sold in accordance with the intended method or methods of distribution thereof (as
indicated in the information furnished to the Company pursuant to Section 4(b) hereof), and
pursuant thereto the Company will prepare and file with the Commission a Registration Statement
relating to the registration on any appropriate form under the Act, which form shall be available
for the sale of the Transfer Restricted Securities in accordance with the intended method or
methods of distribution thereof within the time periods and otherwise in accordance with the
provisions hereof; and

               (ii) issue, upon the request of any Holder or purchaser of Securities covered by any Shelf
Registration Statement contemplated by this Agreement, Exchange Securities of the same class having
an aggregate principal amount equal to the aggregate principal amount of Securities sold pursuant
to the Shelf Registration Statement and surrendered to the Company for cancellation; the Company
shall register the Exchange Securities on the Shelf Registration Statement for this purpose and
issue the Exchange Securities to the purchaser(s) of securities subject to the Shelf Registration
Statement in such names as the purchaser(s) shall designate.

          (c) General Provisions. In connection with any Registration Statement and any related
Prospectus required by this Agreement, the Company shall:

               (i) use its commercially reasonable efforts to keep such Registration Statement continuously
effective and provide all requisite financial statements for the period specified in Section 3 or 4
hereof, as applicable. Upon the occurrence of any event that would cause any such Registration
Statement or the Prospectus contained therein (A) to contain an untrue statement of material fact
or omit to state any material fact necessary to make the statements therein not misleading or (B)
not to be effective and usable for resale of Transfer Restricted Securities during the periods
required by this Agreement, the Company shall file promptly an appropriate amendment to such
Registration Statement curing such defect, and, if Commission review is required, use its
commercially reasonable efforts to cause such amendment to be declared effective as soon as
practicable. If at any time the Commission shall issue any stop order suspending the effectiveness
of any Registration Statement, or any state securities commission or other regulatory authority
shall issue an order suspending the qualification or exemption from qualification of the Transfer
Restricted Securities under state securities or Blue Sky laws, the Company shall use its
commercially reasonable efforts to obtain the withdrawal or lifting of such order at the earliest
possible time;

 

 

10

               (ii) use its commercially reasonable efforts to prepare and file with the Commission such
amendments and post-effective amendments to the applicable Registration Statement as may be
necessary to keep such Registration Statement effective for the applicable period set forth in
Section 3 or 4 hereof, as the case may be; use its commercially reasonable efforts to cause the
Prospectus to be supplemented by any required Prospectus supplement, and as so supplemented to be
filed pursuant to Rule 424 under the Act, and to comply fully with Rules 424, 430A and 462, as
applicable, under the Act in a timely manner during the applicable period; and comply with the
provisions of the Act with respect to the disposition of all securities covered by such
Registration Statement during the applicable period in accordance with the intended method or
methods of distribution by the sellers thereof set forth in such Registration Statement or
supplement to the Prospectus;

               (iii) in connection with any sale of Transfer Restricted Securities that will result in such
securities no longer being Transfer Restricted Securities, cooperate with the Holders to facilitate
the timely preparation and delivery of certificates representing such Transfer Restricted
Securities to be sold and not bearing any restrictive legends; and to register such Transfer
Restricted Securities in such denominations and such names as the selling Holders may request at
least two Business Days prior to such sale of Transfer Restricted Securities;

               (iv) use its commercially reasonable efforts to cause the disposition of the Transfer
Restricted Securities covered by the Registration Statement to be registered with or approved by
such other governmental agencies or authorities as may be necessary to enable the seller or sellers
thereof to consummate the disposition of such Transfer Restricted Securities; provided, however,
that the Company shall not be required to register or qualify as a foreign corporation where it is
not now so qualified or to take any action that would subject it to the service of process in suits
or to taxation, other than as to matters and transactions relating to the Registration Statement,
in any jurisdiction where it is not now so subject;

               (v) provide a CUSIP number for all Transfer Restricted Securities not later than the effective
date of a Registration Statement covering such Transfer Restricted Securities and provide the
Trustee under the Indenture with certificates for the Transfer Restricted Securities which are in a
form eligible for deposit with the Depositary under the Indenture;

               (vi) otherwise (A) use its commercially reasonable efforts to comply with all applicable rules
and regulations of the Commission, and (B) make generally available to its security holders with
regard to any applicable Registration Statement, as soon as reasonably practicable, a consolidated
earnings statement meeting the requirements of Rule 158 (which need not be audited) covering a
twelve-month period beginning after the effective date of the Registration Statement (as such term
is defined in paragraph (c) of Rule 158 under the Act); and

               (vii) cause the Indenture to be deemed qualified under the TIA upon the effectiveness of the
applicable Registration Statement required by this

 

 

11

Agreement and, in connection therewith, cooperate with the Trustee and the Holders to
effect such changes to the Indenture as may be required for such Indenture to be so qualified in
accordance with the terms of the TIA; and execute, and use its commercially reasonable efforts to
cause the Trustee to execute, all documents that may be required to effect such changes and all
other forms and documents required to be filed with the Commission to enable such Indenture to be
so qualified in a timely manner.

          (d) Additional Provisions Applicable to Shelf Registration Statements and Certain Exchange
Offer Prospectuses. In connection with each Shelf Registration Statement, and each Exchange
Offer Registration Statement if and to the extent that an Initial Purchaser has notified the
Company that it is a holder of Exchange Securities that are Transfer Restricted Securities (for so
long as such Exchange Securities are Transfer Restricted Securities or for the period provided in
Section 3 hereof, whichever is shorter), the Company shall:

               (i) advise each selling Holder promptly and, if requested by such Holder, confirm such advice
in writing, (A) when the Prospectus or any Prospectus supplement or post-effective amendment has
been filed, and, with respect to any applicable Registration Statement or any post-effective
amendment thereto, when the same has become effective, (B) of any request by the Commission for
amendments to the Registration Statement or amendments or supplements to the Prospectus or for
additional information relating thereto, (C) of the issuance by the Commission of any stop order
suspending the effectiveness of the Registration Statement under the Act or of the suspension by
any state securities commission of the qualification of the Transfer Restricted Securities for
offering or sale in any jurisdiction, or the initiation of any proceeding for any of the preceding
purposes, (D) of the existence of any fact or the happening of any event that makes any statement
of a material fact made in the Registration Statement, the Prospectus, any amendment or supplement
thereto or any document incorporated by reference therein untrue, or that requires the making of
any additions to or changes in the Registration Statement in order to make the statements therein
not misleading, or that requires the making of any additions to or changes in the Prospectus in
order to make the statements therein, in the light of the circumstances under which they were made,
not misleading (it being understood that in the case of this clause 6(d)(i)(D), only the existence
of the fact or event must be disclosed and the nature of the facts or events may be kept
confidential for such period as reasonably required for bona fide business reasons);

               (ii) if any fact or event contemplated by Section 6(d)(i)(D) above shall exist or have
occurred, prepare a supplement or post-effective amendment to the Registration Statement or related
Prospectus or any document incorporated therein by reference or file any other required document so
that, as thereafter delivered to the purchasers of Transfer Restricted Securities, the Prospectus
will not contain an untrue statement of a material fact or omit to state any material fact
necessary to make the statements therein, in the light of the circumstances under which they were
made, not misleading;

 

12

               (iii) subject to Section 6(e), furnish to each selling Holder in connection with such exchange
or sale, if any, before filing with the Commission, copies of any Registration Statement or any
Prospectus included therein (except the Prospectus included in the Exchange Offer Registration
Statement at the time it was declared effective) or any amendments or supplements to any such
Registration Statement or Prospectus (including all documents incorporated by reference after the
initial filing of such Registration Statement), which documents will be subject to the review and
comment of such Holders in connection with such sale, if any, for a period of at least five
Business Days, and the Company will not file any such Registration Statement or Prospectus or any
amendment or supplement to any such Registration Statement or Prospectus (including all such
documents incorporated by reference) to which a Holder of Transfer Restricted Securities covered by
such Registration Statement shall reasonably object in writing within five Business Days after the
receipt thereof. A Holder shall be deemed to have reasonably objected to such filing if such
Registration Statement, amendment, Prospectus or supplement, as applicable, as proposed to be
filed, contains an untrue statement of a material fact or omits to state any material fact
necessary to make the statements therein not misleading or fails to comply with the applicable
requirements of the Act;

               (iv) promptly prior to the filing of any document that is to be incorporated by reference into
a Registration Statement or Prospectus, provide copies of such document to each selling Holder
named in the Registration Statement in connection with such exchange or sale, if any, make the
Company’s representatives available as may be reasonably necessary for discussion of such document
and other customary due diligence matters, and include such information in such document prior to
the filing thereof as such Holders may reasonably request;

               (v) make available, subject to appropriate confidentiality agreements, during reasonable
business hours, for inspection in the offices where such records are normally maintained by each
selling Holder and any attorney or accountant retained by such selling Holders, all relevant
financial and other records, pertinent corporate documents of the Company as may be reasonably
necessary to enable them to exercise the appropriate due diligence responsibility, and cause the
Company’s officers, directors and employees to supply all information that is (a) reasonably
requested by any such selling Holder, attorney or accountant in connection with such Registration
Statement or any post-effective amendment thereto subsequent to the filing thereof and prior to its
effectiveness and (b) customarily furnished in transactions of the type contemplated by such
Registration Statement;

               (vi) if requested by any selling Holders in connection with such exchange or sale, promptly
include in any Registration Statement or Prospectus, pursuant to a supplement or post-effective
amendment if necessary, such information as such selling Holders may reasonably request to have
included therein, including, without limitation, information relating to the “Plan of Distribution”
of the Transfer Restricted Securities; and make all required filings of such Prospectus supplement
or post-effective amendment as soon as practicable after the Company is notified of the matters to
be included in such Prospectus supplement or post-effective amendment;

 

13

               (vii) furnish to each selling Holder in connection with such exchange or sale without charge,
at least one copy of the Registration Statement, as first filed with the Commission, and of each
amendment thereto, including all documents incorporated by reference therein and all exhibits
(including exhibits incorporated therein by reference);

               (viii) deliver to each selling Holder without charge, as many copies of the Prospectus
(including each preliminary prospectus) and any amendment or supplement thereto as such Holders
reasonably may request; the Company hereby consents to the use (in accordance with law) of the
Prospectus and any amendment or supplement thereto by each selling Holder in connection with the
offering and the sale of the Transfer Restricted Securities covered by the Prospectus or any
amendment or supplement thereto;

               (ix) upon the request of any selling Holder, enter into such agreements (including
underwriting agreements) and make such reasonable representations and warranties and take all such
other reasonable actions in connection therewith in order to expedite or facilitate the disposition
of the Transfer Restricted Securities pursuant to any applicable Registration Statement
contemplated by this Agreement as may be reasonably requested by any Holder in connection with any
sale or resale pursuant to any applicable Registration Statement contemplated by this Agreement,
which agreements must be in customary form. In such connection, the Company shall:

     (A) upon request of any selling Holder, furnish (or in the case of paragraphs (2) and
(3), use its commercially reasonable efforts to cause to be furnished) to each selling
Holder, upon Consummation of the Exchange Offer or upon the effectiveness of the Shelf
Registration Statement, as the case may be:

          (1) a certificate, dated such date, signed on behalf of the Company by an appropriate
officer of the Company confirming, as of the date thereof, the accuracy of the
representations and warranties made by the Company in the Purchase Agreement as if made on
such date, the matters set forth in Sections 5(p), 5(q) and 5(s) of the Purchase Agreement,
and such other similar matters as such Holders may reasonably request;

          (2) an opinion, dated the date of Consummation of the Exchange Offer or the date of
effectiveness of the Shelf Registration Statement, as the case may be, of counsel for the
Company (which may include in-house counsel of the Company) covering matters customarily
covered in such opinions as such parties may reasonably request, and in any event including
a statement to the effect that such counsel has participated in conferences with officers
and other representatives of the Company and representatives of the independent public
accountants for the Company, and has considered the matters required to be stated therein
and the statements contained therein, although such counsel has not independently verified
the accuracy, completeness or fairness of such statements; and that such counsel advises
that, on the basis of the foregoing, no facts came to

 

14

such counsel’s attention that caused such counsel to believe that the applicable
Registration Statement, at the time such Registration Statement or any post-effective
amendment thereto became effective and, in the case of the Exchange Offer Registration
Statement, as of the date of Consummation of the Exchange Offer, contained an untrue
statement of a material fact or omitted to state a material fact required to be stated
therein or necessary to make the statements therein not misleading, or that the Prospectus
contained in such Registration Statement as of its date and, in the case of the opinion
dated the date of Consummation of the Exchange Offer, as of the date of Consummation,
contained an untrue statement of a material fact or omitted to state a material fact
necessary in order to make the statements therein, in the light of the circumstances under
which they were made, not misleading. Without limiting the foregoing, such counsel may
state further that such counsel assumes no responsibility for, and has not independently
verified, the accuracy, completeness or fairness of the financial statements, notes and
schedules and other financial data included in any Registration Statement contemplated by
this Agreement or the related Prospectus; and

          (3) a customary comfort letter, dated the date of Consummation of the Exchange Offer,
or as of the date of effectiveness of the Shelf Registration Statement, as the case may be,
from the independent accountants for the Company, in the customary form and covering
matters of the type customarily covered in comfort letters to underwriters in connection
with underwritten offerings;

     (B) deliver such other documents and certificates as may be reasonably requested by
the selling Holders to evidence compliance with the matters covered in clause (A) above and
with any customary conditions contained in any agreement entered into by the Company
pursuant to this clause (ix);

               (x) prior to any public offering of Transfer Restricted Securities, cooperate with the selling
Holders and their counsel in connection with the registration and qualification of the Transfer
Restricted Securities under the securities or Blue Sky laws of such jurisdictions as the selling
Holders may reasonably request and do any and all other acts or things reasonably necessary or
advisable to enable the disposition in such jurisdictions of the Transfer Restricted Securities
covered by the applicable Registration Statement; provided, however, that the Company shall not be
required to register or qualify as a foreign corporation where it is not now so qualified or to
take any action that would subject it to the service of process in suits or to taxation, other than
as to matters and transactions relating to the Registration Statement, in any jurisdiction where it
is not now so subject; and

               (xi) provide promptly to each Holder, upon request, each document filed with the Commission
pursuant to the requirements of Section 13 or Section 15(d) of the Exchange Act.

 

15

          (e) Restrictions on Holders. Each Holder’s acquisition of a Transfer Restricted
Security constitutes such Holder’s agreement that, upon receipt of the notice referred to in
Section 6(d)(i)(C) or any notice from the Company of the existence of any fact of the kind
described in Section 6(d)(i)(D) hereof (a “Suspension Notice”), such Holder will forthwith
discontinue disposition of Transfer Restricted Securities pursuant to the applicable Registration
Statement until (i) such Holder has received copies of the supplemented or amended Prospectus
contemplated by Section 6(d)(ii) hereof or (ii) such Holder is advised in writing by the Company
that the use of the Prospectus may be resumed and has received copies of any additional or
supplemental filings that are incorporated by reference in the Prospectus (in each case, the
"Recommencement Date”). Each Holder receiving a Suspension Notice shall be required to either (I)
destroy any Prospectuses, other than permanent file copies, then in such Holder’s possession which
have been replaced by the Company with more recently dated Prospectus or (II) deliver to the
Company (at the Company’s expense) all copies, other than permanent file copies, then in such
Holder’s possession of the Prospectuses covering such Transfer Restricted Securities that were
current at the time of receipt of the Suspension Notice. The time period regarding the
effectiveness of such Registration Statement set forth in Section 3 or 4 hereof, as applicable,
shall be extended by a number of days equal to the number of days in the period from and including
the date of delivery of the Suspension Notice to the Recommencement Date.

SECTION 7. REGISTRATION EXPENSES

          (a) All expenses incident to the performance of or compliance with this Agreement by the
Company will be borne by the Company, regardless of whether a Registration Statement becomes
effective, including without limitation: (i) all registration and filing fees and expenses; (ii)
all fees and expenses of compliance with federal securities and state Blue Sky or securities laws;
(iii) all expenses of printing (including certificates for the Exchange Securities to be issued in
the Exchange Offer and printing of Prospectuses), messenger and delivery services and telephone;
(iv) all fees and disbursements of counsel for the Company and one counsel for the Holders of
Transfer Restricted Securities (which shall be Paul, Weiss, Rifkind, Wharton & Garrison LLP or such
other counsel as may be selected by the Holders of a majority in principal amount of the Transfer
Restricted Securities for whose benefit such Registration Statement is being prepared); (v) all
application and filing fees in connection with listing the Exchange Securities on a national
securities exchange or automated quotation system pursuant to the requirements hereof; and (vi) all
fees and disbursements of independent certified public accountants of the Company (including the
expenses of any special audit and comfort letters required by or incident to such performance).

          The Company will, in any event, bear its internal expenses (including, without limitation, all
salaries and expenses of its officers and employees performing legal or accounting duties), the
expenses of any annual audit and the fees and expenses of any Person, including special experts,
retained by the Company.

          (b) In connection with any Registration Statement required by this Agreement (including,
without limitation, the Exchange Offer Registration Statement and

 

16

the Shelf Registration Statement), the Company will reimburse the Initial Purchasers and the
Holders of Transfer Restricted Securities who are tendering Securities into the Exchange Offer
and/or selling or reselling Securities or Exchange Securities pursuant to the “Plan of
Distribution” contained in the Exchange Offer Registration Statement or the Shelf Registration
Statement, as applicable, for the reasonable fees and disbursements of not more than one counsel
(who shall be Paul, Weiss, Rifkind, Wharton & Garrison LLP unless another firm shall be chosen by
the Initial Purchasers or the Holders of a majority in principal amount of the Transfer Restricted
Securities for whose benefit such Registration Statement is being prepared). Each Holder shall pay
all expenses of its counsel except as set forth in this Section, all underwriting discounts and
commissions and transfer taxes, if any, relating to the sale or disposition of such Holder’s
Transfer Restricted Securities pursuant to a Shelf Registration Statement.

SECTION 8. INDEMNIFICATION

          (a) The Company agrees to indemnify and hold harmless each Holder, its directors, officers and
each Person, if any, who controls such Holder (within the meaning of Section 15 of the Act or
Section 20 of the Exchange Act), from and against any and all losses, claims, damages, liabilities
or judgments (including without limitation, any legal or other expenses incurred in connection with
investigating or defending any matter, including any action that could give rise to any such
losses, claims, damages, liabilities or judgments) caused by any untrue statement or alleged untrue
statement of a material fact contained in any Registration Statement, preliminary prospectus or
Prospectus (or any amendment or supplement thereto) provided by the Company to any Holder or any
prospective purchaser of Exchange Securities or registered Securities, or caused by any omission or
alleged omission to state therein a material fact required to be stated therein or necessary to
make the statements therein not misleading, except insofar as such losses, claims, damages,
liabilities or judgments are caused by an untrue statement or omission or alleged untrue statement
or omission that is based upon information relating to any of the Holders furnished in writing to
the Company by any of the Holders expressly for use in any Registration Statement; provided,
however, that the Company shall not be liable to any indemnified party (as defined below) under
this Section 8 to the extent, but only to the extent, that (i) such loss, claim, damage or
liability of such indemnified party results in connection with an initial resale by such
indemnified party, (ii) such loss, claim, damage or liability of such indemnified party results
from an untrue statement of a material fact or an omission of a material fact contained in the
preliminary prospectus, which untrue statement or omission was completely corrected in the
Prospectus, (iii) the Company had previously furnished sufficient quantities of the Prospectus to
such indemnified party within a reasonable amount of time prior to such sale, (iv) such indemnified
party failed to deliver the Prospectus in connection with such initial resale and (v) the Company
sustains the burden of proving that such indemnified party sold the Securities or Exchange
Securities to the person alleging such loss, claim, damage or liability without sending or giving,
at or prior to written confirmation of such sale, a copy of the Prospectus.

          (b) By its acquisition of Transfer Restricted Securities, each Holder of Transfer Restricted
Securities agrees, severally and not jointly, to indemnify and hold

 

17

harmless the Company, and its directors and officers, and each person, if any, who controls
(within the meaning of Section 15 of the Act or Section 20 of the Exchange Act) the Company to the
same extent as the foregoing indemnity from the Company set forth in Section 8(a) hereof, but only
with reference to information relating to such Holder furnished in writing to the Company by such
Holder expressly for use in any Registration Statement. In no event shall any Holder, its
directors, officers or any Person who controls such Holder be liable or responsible for any amount
in excess of the amount by which the total amount received by such Holder with respect to its sale
of Transfer Restricted Securities pursuant to a Registration Statement exceeds (i) the amount paid
by such Holder for such Transfer Restricted Securities and (ii) the amount of any damages that such
Holder, its directors, officers or any Person who controls such Holder has otherwise been required
to pay by reason of such untrue or alleged untrue statement or omission or alleged omission.

          (c) In case any action shall be commenced involving any Person in respect of which indemnity
may be sought pursuant to Section 8(a) or (b) hereof (the “indemnified party”), the indemnified
party shall promptly notify the Person against whom such indemnity may be sought (the “indemnifying
party”) in writing and the indemnifying party shall assume the defense of such action, including
the employment of counsel reasonably satisfactory to the indemnified party and the payment of all
fees and expenses of such counsel, as incurred (except that in the case of any action in respect of
which indemnity may be sought pursuant to both Sections 8(a) and (b) hereof, a Holder shall not be
required to assume the defense of such action pursuant to this Section 8(c), but may employ
separate counsel and participate in the defense thereof, but the fees and expenses of such counsel,
except as provided below, shall be at the expense of the Holder). Any indemnified party shall have
the right to employ separate counsel in any such action and participate in the defense thereof, but
the fees and expenses of such counsel shall be at the expense of the indemnified party unless (i)
the employment of such counsel shall have been specifically authorized in writing by the
indemnifying party, (ii) the indemnifying party shall have failed to assume the defense of such
action or (iii) the named parties to any such action (including any impleaded parties) include both
the indemnified party and the indemnifying party, and the indemnified party shall have been advised
by its counsel that there may be one or more legal defenses available to it which are different
from or additional to those available to the indemnifying party (in which case the indemnifying
party shall not have the right to assume the defense of such action on behalf of the indemnified
party). In any such case, the indemnifying party shall not, in connection any one action or
separate but substantially similar or related actions in the same jurisdiction arising out of the
same general allegations or circumstances, be liable for the fees and expenses of more than one
separate firm of attorneys (in addition to any local counsel) for all indemnified parties and all
such reasonable fees and expenses shall be reimbursed as they are incurred. Such firm shall be
designated in writing by a majority of the Holders, in the case of the parties indemnified pursuant
to Section 8(a) hereof, and by the Company, in the case of parties indemnified pursuant to Section
8(b) hereof. The indemnifying party shall indemnify and hold harmless the indemnified party from
and against any and all losses, claims, damages, liabilities and judgments by reason of any
settlement of any action (A) effected with its written consent or (B) effected without its written
consent if the settlement is entered into more than 20 Business Days

 

18

after the indemnifying party shall have received a request from the indemnified party for
reimbursement for the fees and expenses of counsel (in any case where such fees and expenses are at
the expense of the indemnifying party) and, prior to the date of such settlement, the indemnifying
party shall have failed to comply with such reimbursement request. No indemnifying party shall,
without the prior written consent of the indemnified party, effect any settlement or compromise of,
or consent to the entry of judgment with respect to, any pending or threatened action in respect of
which the indemnified party is or could have been a party and indemnity or contribution may be or
could have been sought hereunder by the indemnified party, unless such settlement, compromise or
judgment (I) includes an unconditional release of the indemnified party from all liability on
claims that are or could have been the subject matter of such action and (II) does not include a
statement as to or an admission of fault, culpability or a failure to act, by or on behalf of the
indemnified party.

          (d) To the extent that the indemnification provided for in this Section 8 is unavailable to an
indemnified party in respect of any losses, claims, damages, liabilities or judgments referred to
herein, then each indemnifying party, in lieu of indemnifying such indemnified party shall
contribute to the amount paid or payable by such indemnified party as a result of such losses,
claims, damages, liabilities or judgments (i) in such proportion as is appropriate to reflect the
relative benefits received by the Company, on the one hand, and the Holders, on the other hand,
from their initial sale of Transfer Restricted Securities (or in the case of Exchange Securities
that are Transfer Restricted Securities, the sale of the Securities for which such Exchange
Securities were exchanged) or (ii) if the allocation provided by clause 8(d)(i) above is not
permitted by applicable law, in such proportion as is appropriate to reflect not only the relative
benefits referred to in such clause 8(d)(i) but also the relative fault of the Company, on the one
hand, and of the Holder, on the other hand, in connection with the statements or omissions which
resulted in such losses, claims, damages, liabilities or judgments, as well as any other relevant
equitable considerations. The relative fault of the Company, on the one hand, and of the Holder,
on the other hand, shall be determined by reference to, among other things, whether the untrue or
alleged untrue statement of a material fact or the omission or alleged omission to state a material
fact relates to information supplied by the Company, on the one hand, or by the Holder, on the
other hand, and the parties’ relative intent, knowledge, access to information and opportunity to
correct or prevent such statement or omission. The amount paid or payable by a party as a result
of the losses, claims, damages, liabilities and judgments referred to above shall be deemed to
include, subject to the limitations set forth in Section 8(c) hereof, any legal or other fees or
expenses reasonably incurred by such party in connection with investigating or defending any action
or claim.

          The Company, on the one hand, and each Holder (by its acquisition of Transfer Restricted
Securities), on the other hand, agree that it would not be just and equitable if contribution
pursuant to this Section 8(d) were determined by pro rata allocation (even if the Holders were
treated as one entity for such purpose) or by any other method of allocation which does not take
account of the equitable considerations referred to in the immediately preceding paragraph. The
amount paid or payable by an indemnified party as a result of the losses, claims, damages,
liabilities or judgments

 

19

referred to in the immediately preceding paragraph shall be deemed to include, subject to the
limitations set forth above, any legal or other expenses reasonably incurred by such indemnified
party in connection with investigating or defending any matter, including any action that could
have given rise to such losses, claims, damages, liabilities or judgments. Notwithstanding the
provisions of this Section 8, no Holder, its directors, its officers or any Person, if any, who
controls such Holder shall be required to contribute, in the aggregate, any amount in excess of the
amount by which the total received by such Holder with respect to the sale of Transfer Restricted
Securities pursuant to a Registration Statement exceeds (i) the amount paid by such Holder for such
Transfer Restricted Securities and (ii) the amount of any damages which such Holder has otherwise
been required to pay by reason of such untrue or alleged untrue statement or omission or alleged
omission. No Person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of
the Act) shall be entitled to contribution from any Person who was not guilty of such fraudulent
misrepresentation. The Holders’ obligations to contribute pursuant to this Section 8(d) are
several in proportion to the respective principal amount of Transfer Restricted Securities held by
each Holder hereunder and not joint.

SECTION 9. RULE 144A AND RULE 144

          The Company agrees with each Holder, for so long as any Transfer Restricted Securities remain
outstanding and during any period in which the Company (a) is not subject to Section 13 or 15(d) of
the Exchange Act, to make available, upon request of any Holder of Transfer Restricted Securities,
to such Holder or beneficial owner of Transfer Restricted Securities in connection with any sale
thereof and any prospective purchaser of such Transfer Restricted Securities designated by such
Holder or beneficial owner, the information required by Rule 144A(d)(4) under the Act in order to
permit resales of such Transfer Restricted Securities pursuant to Rule 144A, and (b) is subject to
Section 13 or 15(d) of the Exchange Act, to make all filings required thereby in a timely manner in
order to permit resales of such Transfer Restricted Securities pursuant to Rule 144.

SECTION 10. UNDERWRITTEN REGISTRATIONS

          No Holder may participate in any Underwritten Registration unless such Holder (a) agrees to
sell such Holder’s Transfer Restricted Securities proposed to be included in such Underwritten
Registration on the basis provided in customary underwriting arrangements entered into in
connection therewith and (b) completes and executes all reasonable questionnaires, powers of
attorney, and other documents required under the terms of such underwriting arrangements.

SECTION 11. SELECTION OF UNDERWRITERS

          For any Underwritten Offering, the investment banker or investment bankers and manager or
managers for any Underwritten Offering that will administer such offering will be selected by the
Holders of a majority in aggregate principal amount of the Transfer Restricted Securities included
in such offering and consented to by the

 

20

Company, which consent shall not be unreasonably withheld. Such investment bankers and
managers are referred to herein as the “underwriters.”

SECTION 12. MISCELLANEOUS

          (a) Remedies. The Company acknowledges and agrees that any failure by the Company to
comply with its obligations under Sections 3 and 4 hereof may result in material irreparable injury
to the Initial Purchasers or the Holders for which there is no adequate remedy at law, that it will
not be possible to measure damages for such injuries precisely and that, in the event of any such
failure, the Initial Purchasers or any Holder may obtain such relief as may be required to
specifically enforce the Company’s obligations under Sections 3 and 4 hereof. The Company further
agrees to waive the defense in any action for specific performance that a remedy at law would be
adequate.

          (b) No Inconsistent Agreements. The Company will not, on or after the date of this
Agreement, enter into any agreement with respect to its securities that is inconsistent with the
rights granted to the Holders in this Agreement or otherwise conflicts with the provisions hereof.
The Company has not previously entered into any agreement granting any registration rights with
respect to its securities to any Person that would require such securities to be included in any
Registration Statement filed hereunder. The rights granted to the Holders hereunder do not in any
way conflict with and are not inconsistent with the rights granted to the holders of the Company’s
securities under any agreement in effect on the date hereof.

          (c) Amendments and Waivers. The provisions of this Agreement may not be amended,
modified or supplemented, and waivers or consents to or departures from the provisions hereof may
not be given unless (i) in the case of Section 5 hereof and this Section 10(c)(i), the Company has
obtained the written consent of Holders of all outstanding Transfer Restricted Securities and (ii)
in the case of all other provisions hereof, the Company has obtained the written consent of Holders
of a majority of the outstanding principal amount of Transfer Restricted Securities (excluding
Transfer Restricted Securities held by the Company or any of its Affiliates). Notwithstanding the
foregoing, a waiver or consent to departure from the provisions hereof that relates exclusively to
the rights of Holders whose Transfer Restricted Securities are being tendered pursuant to the
Exchange Offer, and that does not affect directly or indirectly the rights of other Holders whose
Transfer Restricted Securities are not being tendered pursuant to such Exchange Offer, may be given
by the Holders of a majority of the outstanding principal amount of Transfer Restricted Securities
subject to such Exchange Offer.

          (d) Third Party Beneficiary. The Holders shall be third party beneficiaries to the
agreements made hereunder between the Company, on the one hand, and the Initial Purchasers, on the
other hand, and shall have the right to enforce such agreements directly to the extent they may
deem such enforcement necessary or advisable to protect their rights hereunder.

 

21

          (e) Notices. All notices and other communications provided for or permitted hereunder
shall be made in writing by hand-delivery, first-class mail (registered or certified, return
receipt requested), telecopier, or air courier guaranteeing overnight delivery:

               (i) if to a Holder, at the address set forth on the records of the Registrar under the
Indenture, with a copy to the Registrar under the Indenture; and

               (ii) if to the Company:

	 	 	 
	 

	 	Rural Cellular Corporation
	 

	 	P.O. Box 2000
	 

	 	3905 Dakota Street, S.W.
	 

	 	Alexandria, Minnesota 56308
	 

	 	Telecopier No.: 320-808-2102
	 

	 	Attention: President
	 
	 	 
	 

	 	With a copy to:
	 
	 	 
	 

	 	Moss & Barnett, P.A.
	 

	 	4800 Wells Fargo Center
	 

	 	90 South Seventh Street
	 

	 	Minneapolis, Minnesota 55402
	 

	 	Telecopier No.: 612-339-6686
	 

	 	Attention: Richard J. Kelber

          All such notices and communications shall be deemed to have been duly given at the time
delivered by hand, when receipt acknowledged, if telecopied; and on the next Business Day, if
timely delivered to an air courier guaranteeing overnight delivery.

          Copies of all such notices, demands or other communications shall be concurrently delivered by
the Person giving the same to the Trustee at the address specified in the Indenture.

          (f) Successors and Assigns. This Agreement shall inure to the benefit of and be
binding upon the successors and assigns of each of the parties, including without limitation and
without the need for an express assignment, subsequent Holders; provided, however, that this
Agreement shall not inure to the benefit of or be binding upon a successor or assign of a Holder
unless and to the extent such successor or assign acquired Transfer Restricted Securities;
provided, that nothing herein shall be deemed to permit any assignment, transfer or other
disposition of Transfer Restricted Securities in violation of the terms hereof or of the Purchase
Agreement or the Indenture. If any transferee of any Holder shall acquire Transfer Restricted
Securities in any manner, whether by operation of law or otherwise, such Transfer Restricted
Securities shall be held subject to all of the terms of this Agreement, and by taking and holding
such Transfer Restricted Securities such Person shall be conclusively deemed to have agreed to be
bound by and to perform all of the terms and provisions of this Agreement,

 

22

including the restrictions on resale set forth in this Agreement and, if applicable, the
Purchase Agreement, and such Person shall be entitled to receive the benefits hereof.

          (g) Counterparts. This Agreement may be executed in any number of counterparts and by
the parties hereto in separate counterparts, each of which when so executed shall be deemed to be
an original and all of which taken together shall constitute one and the same agreement.

          (h) Headings. The headings in this Agreement are for convenience of reference only
and shall not limit or otherwise affect the meaning hereof.

          (i) Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE
WITH, THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO THE RULES OF CONFLICT OF LAWS OF THE
STATE OF NEW YORK OR ANY OTHER STATE THAT WOULD INDICATE THE APPLICABILITY OF THE LAWS OF ANY OTHER
JURISDICTION.

          (i) Severability. In the event that any one or more of the provisions contained
herein, or the application thereof in any circumstance, is held invalid, illegal or unenforceable,
the validity, legality and enforceability of any such provision in every other respect and of the
remaining provisions contained herein shall not be affected or impaired thereby.

          (j) Entire Agreement. This Agreement is intended by the parties as a final expression of
their agreement and intended to be a complete and exclusive statement of the agreement and
understanding of the parties hereto in respect of the subject matter contained herein. There are
no restrictions, promises, warranties or undertakings, other than those set forth or referred to
herein with respect to the registration rights granted with respect to the Transfer Restricted
Securities. This Agreement supersedes all prior agreements and understandings between the parties
with respect to such subject matter.

 

23

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

	 	 	 	 	 	 	 
	 	 	RURAL CELLULAR CORPORATION
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 	 	 	 	 
	 

	 	 	 	Name:
	 	Wesley E. Schultz
	 

	 	 	 	Title:
	 	Executive Vice President and Chief Financial Officer

LEHMAN BROTHERS INC.

MORGAN STANLEY & CO. INCORPORATED

Acting severally on behalf of themselves and the several Initial Purchasers

     By: LEHMAN BROTHERS INC., as representative

	 	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	 	 	 

Name:
	 	 
	 

	 	 	 	Title:	 	 

[Signature Pate to Registered Rights Agreement]

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00100-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00100-of-00352.parquet"}]]