Document:

Exhibit 10.2

 

FORM OF

 

AGREEMENT OF LIMITED
PARTNERSHIP

OF

LNR CAPITAL LIMITED PARTNERSHIP

 

[                         ], 200[ ]

 

 

TABLE OF CONTENTS

 

	
  ARTICLE I
  DEFINED TERMS

  	
   

  
	
   

  	
   

  
	
  ARTICLE II ORGANIZATIONAL MATTERS

  	
   

  
	
  Section 2.01

  	
  Formation

  	
   

  
	
  Section 2.02

  	
  Name

  	
   

  
	
  Section 2.03

  	
  Registered
  Office and Agent; Principal Office

  	
   

  
	
  Section 2.04

  	
  Power of
  Attorney

  	
   

  
	
  Section 2.05

  	
  Term

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE III
  PURPOSE

  	
   

  
	
  Section 3.01

  	
  Purpose
  and Business

  	
   

  
	
  Section 3.02

  	
  Powers

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE IV CAPITAL CONTRIBUTIONS

  	
   

  
	
  Section 4.01

  	
  Capital
  Contributions of the Partners

  	
   

  
	
  Section 4.02

  	
  Issuances
  of Additional Partnership Interests

  	
   

  
	
  Section 4.03

  	
  Contribution
  of Proceeds of Issuance of Common Shares

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE V
  DISTRIBUTIONS

  	
   

  
	
  Section 5.01

  	
  Requirement
  and Characterization of Distributions

  	
   

  
	
  Section 5.02

  	
  Amounts
  Withheld

  	
   

  
	
  Section 5.03

  	
  Distributions
  Upon Liquidation

  	
   

  
	
  Section 5.04

  	
  Revisions
  to Reflect Issuance of Additional Partnership Interests

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE VI
  ALLOCATIONS

  	
   

  
	
  Section 6.01

  	
  Allocations
  For Capital Account Purposes

  	
   

  
	
  Section 6.02

  	
  Incentive
  Allocation

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE VII
  MANAGEMENT AND OPERATIONS OF BUSINESS

  	
   

  
	
  Section 7.01

  	
  Management

  	
   

  
	
  Section 7.02

  	
  Certificate
  of Limited Partnership

  	
   

  
	
  Section 7.03

  	
  Restrictions
  on General Partner Authority

  	
   

  
	
  Section 7.04

  	
  Reimbursement
  of the General Partner and the Company

  	
   

  
	
  Section 7.05

  	
  Outside
  Activities of the General Partner

  	
   

  
	
  Section 7.06

  	
  Contracts
  with Affiliates

  	
   

  
	
  Section 7.07

  	
  Indemnification

  	
   

  
	
  Section 7.08

  	
  Liability
  of the General Partner

  	
   

  
	
  Section 7.09

  	
  Other
  Matters Concerning the General Partner

  	
   

  
	
  Section 7.10

  	
  Title
  to Partnership Assets

  	
   

  
	
  Section 7.11

  	
  Reliance
  by Third Parties

  	
   

  
	
  Section 7.12

  	
  Special
  Servicing

  	
   

  
	
  Section 7.13

  	
  Collateral
  Administration Services

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE VIII RIGHTS AND OBLIGATIONS OF
  LIMITED PARTNERS

  	
   

  
	
  Section 8.01

  	
  Limitation
  of Liability

  	
   

  

 

i

 

	
  Section 8.02

  	
  Management
  of Business

  	
   

  
	
  Section 8.03

  	
  Outside
  Activities of Limited Partners

  	
   

  
	
  Section 8.04

  	
  Return
  of Capital

  	
   

  
	
  Section 8.05

  	
  Rights
  of Limited Partners Relating to the Partnership

  	
   

  
	
  Section 8.06

  	
  Redemption
  Right

  	
   

  
	
  Section 8.07

  	
  Buy-out
  of Special Units

  	
   

  
	
  Section 8.08

  	
  Adjustments
  to Conversion Factor

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE IX BOOKS, RECORDS, ACCOUNTING
  AND REPORTS

  	
   

  
	
  Section 9.01

  	
  Records
  and Accounting

  	
   

  
	
  Section 9.02

  	
  Fiscal
  Year

  	
   

  
	
  Section 9.03

  	
  Reports

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE X TAX MATTERS

  	
   

  
	
  Section 10.01

  	
  Preparation of Tax Returns

  	
   

  
	
  Section 10.02

  	
  Tax Elections

  	
   

  
	
  Section 10.03

  	
  Tax Matters Partner

  	
   

  
	
  Section 10.04

  	
  Organizational Expenses

  	
   

  
	
  Section 10.05

  	
  Withholding

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE XI TRANSFERS AND WITHDRAWALS

  	
   

  
	
  Section 11.01

  	
  Transfer

  	
   

  
	
  Section 11.02

  	
  Transfer of the Company’s General Partner Interest and Limited
  Partner Interest; Extraordinary Transactions

  	
   

  
	
  Section 11.03

  	
  Limited Partners’ Rights to Transfer

  	
   

  
	
  Section 11.04

  	
  Substituted Limited Partners

  	
   

  
	
  Section 11.05

  	
  Assignees

  	
   

  
	
  Section 11.06

  	
  General Provisions

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE XII ADMISSION OF PARTNERS

  	
   

  
	
  Section 12.01

  	
  Admission of Successor General Partner

  	
   

  
	
  Section 12.02

  	
  Admission of Additional Limited Partners

  	
   

  
	
  Section 12.03

  	
  Amendment of Agreement and Certificate of Limited Partnership

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE XIII DISSOLUTION, LIQUIDATION
  AND TERMINATION

  	
   

  
	
  Section 13.01

  	
  Dissolution

  	
   

  
	
  Section 13.02

  	
  Winding Up

  	
   

  
	
  Section 13.03

  	
  Compliance with Timing Requirements of Regulations

  	
   

  
	
  Section 13.04

  	
  Deemed Termination

  	
   

  
	
  Section 13.05

  	
  Rights of Limited Partners

  	
   

  
	
  Section 13.06

  	
  Notice of Dissolution

  	
   

  
	
  Section 13.07

  	
  Termination of Partnership and Cancellation of Certificate of Limited
  Partnership

  	
   

  
	
  Section 13.08

  	
  Reasonable Time for Winding-Up

  	
   

  
	
  Section 13.09

  	
  Waiver of Partition

  	
   

  

 

ii

 

	
  ARTICLE XIV AMENDMENT OF PARTNERSHIP
  AGREEMENT; MEETINGS

  	
   

  
	
  Section 14.01

  	
  Amendments

  	
   

  
	
  Section 14.02

  	
  Meetings of the Partners

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE XV GENERAL PROVISIONS

  	
   

  
	
  Section 15.01

  	
  Addresses and Notice

  	
   

  
	
  Section 15.02

  	
  Titles and Captions

  	
   

  
	
  Section 15.03

  	
  Pronouns and Plurals

  	
   

  
	
  Section 15.04

  	
  Further Action

  	
   

  
	
  Section 15.05

  	
  Binding Effect

  	
   

  
	
  Section 15.06

  	
  Creditors

  	
   

  
	
  Section 15.07

  	
  Waiver

  	
   

  
	
  Section 15.08

  	
  Counterparts

  	
   

  
	
  Section 15.09

  	
  Applicable Law

  	
   

  
	
  Section 15.10

  	
  Invalidity of Provisions

  	
   

  
	
  Section 15.11

  	
  Entire Agreement

  	
   

  

 

iii

 

FORM OF

AGREEMENT OF LIMITED
PARTNERSHIP

OF

LNR CAPITAL LIMITED PARTNERSHIP

 

THIS AGREEMENT OF LIMITED PARTNERSHIP OF LNR
CAPITAL LIMITED PARTNERSHIP (the “Partnership”), dated as of [            ], 200[ ] (this “Agreement”), is
entered into by and among LNR Capital Corporation, a Maryland corporation (the “Company”
and the “General Partner”), and those Persons who have executed this Agreement
or a counterpart hereof and whose names are set forth on Exhibit A
attached hereto (as it may be amended from time to time).

 

WHEREAS, the Company intends to effect an
initial public offering (the “IPO”) of its common stock, and upon consummation
of such offering intends to cause the Partnership to acquire directly or
indirectly interests in a portfolio (the “Initial Portfolio”) of real estate
finance assets from subsidiaries of LNR Property Holdings Ltd. (“LNR”) and
cause the Partnership to enter into certain financing arrangements; and

 

WHEREAS, in connection with the IPO and the
transactions contemplated in connection therewith, the Partnership will issue
Partnership Interests to the Persons identified on Exhibit A as of the
date hereof;

 

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

 

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

 

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

 

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

 

“Adjusted Capital Account” means the Capital
Account maintained for each Partner as of the end of each Partnership taxable
year (i) increased by any amounts which such Partner is obligated to
restore pursuant to any provision of this Agreement or is deemed to be
obligated to restore pursuant to the penultimate sentences of Regulations
Sections 1.704-2(g)(1) and 1.704-2(i)(5); and (ii) decreased by the
items described in Regulations Sections 1.704-1(b)(2)(ii)(d)(4), 1.704-1(b)(2)(ii)(d)(5),
and 1.704-1(b)(2)(ii)(d)(6).  The
foregoing definition of

 

 

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

 

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

 

“Adjusted Property” means any property, the
Carrying Value of which has been adjusted pursuant to Exhibit B
hereof.  Once an Adjusted Property is
deemed distributed by, and recontributed to, the Partnership for federal income
tax purposes upon a termination thereof pursuant to Section 708 of the
Code, such property shall thereafter constitute a Contributed Property until
the Carrying Value of such property is further adjusted pursuant to Exhibit B
hereof.

 

“Affiliate” means, with respect to any
Person, any Person directly or indirectly controlling, controlled by or under common
control with such Person.  For purposes
of this definition, “control,” when used with respect to any Person, means the
power to direct the management and policies of such Person, directly or
indirectly, whether through the ownership of voting securities, by contract or
otherwise, and the terms “controlling” and “controlled” have meanings
correlative to the foregoing.

 

“Agreed Value” means (i) in the case of
any Contributed Property as of the time of its contribution to the Partnership,
the 704(c) Value of such property, reduced by any liabilities either
assumed by the Partnership upon such contribution or to which such property is
subject when contributed, and (ii) in the case of any property distributed
to a Partner by the Partnership, the Partnership’s Carrying Value of such
property at the time such property is distributed, reduced by any liabilities
either assumed by such Partner upon such distribution or to which such property
is subject at the time of distribution as determined under Section 752 of
the Code and the Regulations thereunder. 
The aggregate Agreed Value of the Contributed Property contributed or
deemed contributed by each Partner as of the date hereof is as set forth in Exhibit A.

 

“Agreement” means this Agreement of Limited
Partnership, as it may be amended, supplemented or restated from time to time,
including by way of adoption of a Certificate of Designations.

 

“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 11.05.

 

“Available Cash” means, with respect to any
period for which such calculation is being made, (i) the sum of:

 

A.            the
Partnership’s Net Income or Net Loss (as the case may be) for such period
(without regard to adjustments resulting from allocations described in Sections
1.A through 1.G of Exhibit C);

 

2

 

B.            Depreciation
and all other noncash charges deducted in determining Net Income or Net Loss
for such period;

 

C.            the
amount of any reduction in the reserves of the Partnership referred to in
clause (ii)(F) below (including, without limitation, reductions resulting
because the General Partner determines such amounts are no longer necessary);

 

D.            the
excess of proceeds from the sale, exchange, disposition, or refinancing of
Partnership property for such period over the gain recognized from such sale,
exchange, disposition, or refinancing during such period (excluding Terminating
Capital Transactions); and

 

E.             Any
amount included in determining Net Income or Net Loss for such period that was
not disbursed by the Partnership during such period.

 

F.             all
other cash received by the Partnership for such period that was not included in
determining Net Income or Net Loss for such period;

 

(ii) less the sum of:

 

A.            all
principal debt payments made by the Partnership during such period;

 

B.            capital
expenditures made by the Partnership during such period;

 

C.            investments
made by the Partnership during such period in any entity (including loans made
thereto) to the extent that such investments are not otherwise described in
clause (ii)(A) or (ii)(B);

 

D.            all
other expenditures and payments not deducted in determining Net Income or Net
Loss for such period;

 

E.             any
amount included in determining Net Income or Net Loss for such period that was
not received by the Partnership during such period;

 

F.             the
amount of any increase in reserves during such period which the General Partner
determines to be necessary or appropriate in its sole and absolute discretion;
and

 

G.            the
amount of any working capital accounts and other cash or similar balances which
the General Partner determines to be necessary or appropriate, in its sole and
absolute discretion.

 

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

 

“Beneficial Owner” has the meaning assigned
to such term in Rule 13d-3 and Rule 13d-5 under the Securities
Exchange Act of 1934, as amended, except that in calculating the beneficial
ownership of any particular “person” (as that term is used in Section 13(d)(3) of
the Securities Exchange Act of 1934, as amended), such “person” will be deemed
to have

 

3

 

beneficial ownership of all securities that such “person” has the right
to acquire by conversion or exercise of other securities, whether such right is
currently exercisable or is exercisable only after the passage of time.

 

“Board of Directors” means the Board of
Directors of the Company.

 

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

 

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

 

“Capital Account” means the Capital Account
maintained for a Partner pursuant to Exhibit B hereof.

 

“Capital Contribution” means, with respect to
any Partner, any cash, cash equivalents or the Agreed Value of Contributed
Property which such Partner contributes or is deemed to contribute to the
Partnership pursuant to Section 4.01, 4.02, or 4.03 hereof.

 

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

 

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

 

“Certificate of Designations” means an
amendment to this Agreement that sets forth the designations, rights, powers,
duties and preferences of holders of any Additional Common Units or other
Partnership Interests issued pursuant to Section 4.02.A., which amendment
is in the form of a certificate signed by the General Partner and appended to
this agreement.  A Certificate of
Designations is not the exclusive manner in which such an amendment may be
effected.  The General Partner may adopt
a Certificate of Designations without the consent of the Limited Partners to
the extent permitted pursuant to Section 14.01.B hereof.

 

4

 

“Certificate of Incorporation” means the
Certificate of Incorporation or other organizational document governing the
General Partner, as amended or restated from time to time.

 

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

 

“Change of Control” means any transaction or
series of related transactions (whether by purchase of existing Common Shares
or Partnership Units, merger, consolidation or otherwise, but not including the
issuance of newly issued Common Shares by the Company or of Partnership Units
by the Operating Partnership following a capital contribution by the Company in
response to such issuance by the Company), to which the Company is a party or
the Company’s consent or approval is required, the result of which is that
either (1) any Person other than the Related Parties becomes the
Beneficial Owner, directly or indirectly, of more than 50% of the total voting
power in the aggregate of all classes of capital stock of the Company then
outstanding normally entitled to vote in the election of directors of the
Company (or any surviving entity) (including in such calculation the shares of
capital stock such Person would receive if any Partnership Units owned by such
Person were presented for redemption and acquired by the Company for shares of
capital stock), (2) the Beneficial Owners of the capital stock of the
Company normally entitled to vote in the election of directors immediately
prior to the transaction or series of related transactions beneficially own 50%
or less of the total voting power in the aggregate of all classes of capital
stock of the Company then outstanding normally entitled to vote in the election
of directors of the Company (or any surviving entity) immediately after such
transaction or transactions (including in such calculation the shares of
capital stock such Beneficial Owners would receive if any Partnership Units
owned by such Beneficial Owners were presented for redemption and acquired by
the Company for shares of capital stock) or (3) the following persons
cease for any reason to constitute a majority of the Board of Directors of the
Company: (a) individuals who on [            ], 200[ ] constituted the Board of
Directors and (b) any new directors whose election to the Board of
Directors or whose nomination for election by the Company’s stockholders was
approved by at least a majority of Board of Directors of the Company then still
in office either who were directors on [             ], 200[ ] or whose election or
nomination for election was previously so approved.

 

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

 

“Common Share” shall mean a share of common
stock, par value $.001 of the Company.

 

“Common Shares Amount” shall mean a number of
Common Shares equal to the product of the number of Common Units offered for
redemption by a Redeeming Partner, multiplied by the Conversion Factor in
effect on the date of receipt by the General Partner of a Notice of Redemption,
provided that in the event the Company issues to all holders of Common Shares
rights, options, warrants or convertible or exchangeable securities entitling
the

 

5

 

shareholders to subscribe for or purchase Common Shares, or any other
securities or property (collectively, “Rights”), and the Rights have not
expired at the Specified Redemption Date, then the Common Shares Amount shall
also include the Rights that were issuable to a holder of the Common Shares
into which such Common Units are redeemable on the applicable record date
relating to the issuance of such Rights.

 

“Common Unit” means a Partnership Unit which
is designated as a Common Unit and which has the rights, preferences and other
privileges designated herein in respect of Common Unitholders.  The allocation of Common Units among the
Partners shall be set forth on Exhibit A, as may be amended from time to
time.

 

“Common Unitholder” means a Partner that
holds Common Units.

 

“Company Net Income” shall be determined by
calculating the net income available to owners of Common Shares before non-cash
equity compensation expense, in accordance with GAAP.

 

“Consent” means the consent or approval of a
proposed action by a Partner given in accordance with Section 14.02
hereof.

 

“Contributed Property” means each property or
other asset, in such form as may be permitted by the Act (but excluding cash),
contributed or deemed contributed to the Partnership (including deemed
contributions to the Partnership on termination and reconstitution thereof
pursuant to Section 708 of the Code). 
Once the Carrying Value of a Contributed Property is adjusted pursuant
to Exhibit B hereof, such property shall no longer constitute a
Contributed Property for purposes of Exhibit B hereof, but shall be deemed
an Adjusted Property for such purposes.

 

“Conversion Factor” means 1.0, as may be
adjusted pursuant to Section 8.08.

 

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

 

“Effective Date” means [         ], 200[ ], the date of closing of the
initial public offering of Common Shares by the Company.

 

“Employee” has the meaning set forth in Section 4.02.

 

“Extraordinary Transaction” shall mean, with
respect to the Company or the Partnership, as applicable, the occurrence of one
or more of the following events: (i) a merger

 

6

 

(including a triangular merger), consolidation or other combination
with or into another Person; (ii) the direct or indirect sale, lease,
exchange or other transfer of all or substantially all of its assets in one
transaction or a series of transactions; (iii) any reclassification, recapitalization
or change of its outstanding equity interests (other than a change in par
value, or from par value to no par value, or as a result of a split, dividend
or similar subdivision); (iv) any issuance of equity securities of the
Company or issuance of Partnership Units in exchange for assets (other than an
issuance of securities for cash or an issuance of securities pursuant to an
employee benefit plan); (v) any Change of Control or (vi) the
adoption of any plan of liquidation or dissolution of the Company or the
Partnership (whether or not in compliance with the provisions of this
Agreement).

 

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

 

“General Partner” means the Company, in its
capacity as the general partner of the Partnership, or any of its successors in
their respective capacity as general partner of the Partnership.

 

“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.

 

“General Partner Unit” means a Partnership
Unit which is designated as a General Partner Unit and which has the rights,
preferences and other privileges designated herein in respect of the General
Partner.

 

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

 

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

 

7

 

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

 

“Incentive Allocation” means an incentive
allocation calculated and payable each fiscal quarter in an amount, not less
than zero, equal to twenty five percent (25%) of the dollar amount by which:

 

(i) (A) the Company Net Income for
such quarter before the Incentive Allocation and non-cash compensation expense
for such quarter, without giving effect to the amount thereof that was reduced
because it represents the Limited Partners’ minority interest in the
Partnership for such quarter, divided by (B) by the sum of (1) the
weighted average number of Common Shares outstanding during such quarter and (2) the
weighted average number of Common Units outstanding during such quarter not
held by the Company or any of its Subsidiaries, exceeds

 

(ii) the product of

 

(A) an amount equal to (1) the
weighted average of the price per share of the Common Shares in the initial
public offering by the Company and the prices per share of the Common Shares in
any subsequent offerings of Common Shares by the Company, in each case at the
time of issuance thereof, multiplied by (2) the greater of 2.00% or 0.50%
plus one-fourth of the Ten Year Treasury Rate for such quarter, multiplied by

 

(B) the sum of (1) the weighted
average number of Common Shares outstanding during such quarter and (2) the
weighted average number of Common Units outstanding during such quarter not
held by the Company or any of its Subsidiaries;

 

provided, that the foregoing calculations shall be adjusted to exclude
cumulative adjustments pursuant to changes in GAAP, as well as non-cash
expenses approved by a majority of the Independent Directors in each case after
discussion between the Special Limited Partner and the Independent Directors.

 

“Indemnitee” means (i) any Person made a
party to a proceeding or subject to any claim, demand or liability by reason of
(A) his, her or its status as the General Partner, or as a director,
officer, affiliate, employee, partner, shareholder, member or agent of the
Partnership or the General Partner, (B) his, her or its status as a
Limited Partner, or as a director, officer, affiliate, employee, partner,
shareholder, member or agent of a Limited Partner, (C) his, her or its
status as the Special Limited Partner, or as a director, officer, affiliate,
employee, partner, shareholder, member or agent of the Partnership or the
Special Limited Partner, (D) his, her or its liabilities, pursuant to a
loan guarantee 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
assets subject to); and

 

8

 

(ii) such other Persons (including Affiliates of the General
Partner or the Partnership or the Special Limited 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.

 

“Independent Directors” has such meaning
ascribed to such term in the Management Agreement.

 

“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.

 

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

 

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

 

“Liquidating Event” has the meaning set forth
in Section 13.01.

 

“Liquidator” has the meaning set forth in Section 13.02.

 

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

 

“Management Agreement” means the Management
Agreement, dated [            ], 200[ ],
between the Company and the Manager.

 

“Manager” means LNR Capital Management LLC or
any Person appointed as a substitute Manager of the Partnership.

 

“Modified Adjusted Capital Account Balance”
means, with respect to any Partner, the Capital Account maintained for each
Partner as of the end of each Partnership taxable year (i) increased by
any amounts which such Partner is deemed to be obligated to restore pursuant to
the penultimate sentences of Regulations Sections 1.704-2(g)(1) and
1.704-2(i)(5); and (ii) decreased by the items described in Regulations
Sections 1.704-1(b)(2)(ii)(d)(4), 1.704-1(b)(2)(ii)(d)(5), and 1.704-1(b)(2)(ii)(d)(6).

 

“Net Income” means, for any taxable period,
the excess, if any, of the Partnership’s items of income and gain for such
taxable period over the Partnership’s items of loss and deduction for such
taxable period.  The items included in
the calculation of Net Income shall be determined in accordance with federal
income tax accounting principles, subject to the specific adjustments provided
for in Exhibit B.

 

9

 

“Net Loss” means, for any taxable period, the
excess, if any, of the Partnership’s items of loss and deduction for such
taxable period over the Partnership’s items of income and gain for such taxable
period.  The items included in the
calculation of Net Loss shall be determined in accordance with federal income
tax accounting principles, subject to the specific adjustments provided for in Exhibit B.

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

“Partner Nonrecourse Deductions” has the
meaning set forth in Regulations Section 1.704-2(i)(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
Regulations Section 1.704-2(i)(2).

 

“Partnership” means the limited partnership
formed under the Act and pursuant to this Agreement, as it may be amended
and/or restated, and any successor thereto.

 

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

 

10

 

“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 Regulations Section 1.704-2(d).

 

“Partnership Record Date” means the record
date established by the General Partner for the distribution of Available Cash
pursuant to Section 5.01 hereof, which record date shall be the same as
the record date established by the Company for a distribution to its
shareholders of some or of all of its portion of such distribution.

 

“Partnership Unit” or “Unit” means a
fractional, undivided share of the Partnership Interests of all Partners issued
pursuant to Sections 4.01, 4.02 and 4.03 (and includes any series or class of
Preferred Units).  The number of
Partnership Units outstanding and (in the case of Common Units and General
Partner Units) the Percentage Interest in the Partnership represented by such
Units are set forth in Exhibit A attached hereto, as such Exhibit may
be amended from time to time.  The
ownership of Partnership Units shall be evidenced by such form of certificate
for units as the General Partner adopts from time to time unless the General
Partner determines that the Partnership Units shall be uncertificated
securities.

 

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

 

“Percentage Interest” means, as to a Partner,
its percentage interest as a Common Unitholder or a General Partner determined
by dividing the Common Units or General Partner Units owned by such Partner by
the total number of (i) Common Units and (ii) General Partner Units
then outstanding and as specified in Exhibit A attached hereto, as such Exhibit may
be amended from time to time.

 

“Permitted Holder” means LNR Property
Holdings Ltd. or any Affiliate thereof.

 

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

 

“Preferred Unit” means a limited partnership
interest (of any series), other than a Common Unit, represented by a
fractional, undivided share of the Partnership Interests of all Partners issued
hereunder and which is designated as a “Preferred Unit” (or as a particular
class or series of Preferred Units) herein and which has the rights,
preferences and other privileges designated herein (including by way of a
Certificate of Designations) in respect of a Preferred Unitholder.  The allocation of Preferred Units among the
Partners shall be set forth on Exhibit A, as may be amended from time to
time.

 

“Preferred Unitholder” means a limited
partner that holds Preferred Units (of any class or series).

 

“Recapture Income” means any gain recognized
by the Partnership upon the disposition of any property or asset of the
Partnership, which gain is characterized as ordinary income because it
represents the recapture of deductions previously taken with respect to such
property or asset.

 

11

 

“Recourse Debt Amount” has the meaning set
forth in Section 6.01C(iv) hereof.

 

“Redeeming Partner” has the meaning set forth
in Section 8.06 hereof.

 

“Redemption Right” shall have the meaning set
forth in Section 8.06 hereof.

 

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

 

“Related Party” means (a) any
controlling stockholder, partner, member, 80% (or more) owned Subsidiary, or
immediate family member (in the case of an individual) of a Permitted Holder;
or (b) any trust, corporation, partnership, limited liability company or
other entity, the beneficiaries, stockholders, partners, members, owners or
Persons beneficially holding an 80% or more controlling interest of which
consist of any one or more Permitted Holders and/or such other Persons referred
to in the immediately preceding clause (a).

 

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

 

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

 

“Rights” shall have the meaning set forth in
the definition of “Common Shares Amount.”

 

“704(c) Value” of any Contributed
Property means the fair market value of such property or other consideration at
the time of contribution, as determined by the General Partner using such
reasonable method of valuation as it may adopt; provided, however, that the 704(c) Value
of any property deemed contributed to the Partnership for federal income tax
purposes upon termination and reconstitution thereof pursuant to Section 708
of the Code shall be determined in accordance with Exhibit B hereof.  Subject to Exhibit B hereof, the General
Partner shall, in its sole and absolute discretion, use such method as it deems
reasonable and appropriate to allocate the aggregate of the 704(c) Values
of Contributed Properties in a single or integrated transaction among the
separate properties on a basis proportional to their respective fair market
values.

 

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

 

“Special Unit” means a limited partnership
interest represented by a fractional, undivided share of the Partnership
Interests of all Partners issued hereunder which is designated as a Special
Unit and which has the rights, preferences and other privileges
designated.  The ownership of Special
Units shall be set forth on Exhibit A, as may be amended from time to time

 

12

 

“Special Unit Holder” means the Manager, or
such other affiliate of LNR as designated by the Manager.

 

“Specified Redemption Date” means the tenth
(10th) Business Day after receipt by the Company of a Notice of Redemption;
provided further that if the Company combines its outstanding Common Shares, no
Specified Redemption Date shall occur after the record date of such combination
of Common Shares and prior to the effective date of such combination.

 

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

 

“Substituted Limited Partner” means a Person
who is admitted as a Limited Partner to the Partnership pursuant to Section 11.04.

 

“Ten Year Treasury Rate” means the average of
weekly average yield to maturity for U.S. Treasury securities (adjusted to a
constant maturity of ten (10) years) as published weekly by the Federal
Reserve Board in publication H.15, or any successor publication, during a
fiscal quarter, or if such rate is not published by the Federal Reserve Board,
any Federal Reserve Bank or agency or department of the federal government
selected by the Company.  If the Company
determines in good faith that the Ten-Year U.S. Treasury Rate cannot be
calculated as provided above, then the rate shall be the arithmetic average of
the per annum average yields to maturities, based upon closing asked prices on
each business day during a quarter, for each actively traded marketable U.S.
Treasury fixed interest rate security with a final maturity date not less than
eight no more than twelve years from the date of the closing asked prices as
chosen and quoted for each business day in each such quarter in New York City
by at least three recognized dealers in U.S. government securities selected by
the Company.

 

“Terminating Capital Transaction” means any
sale or other disposition of all or substantially all of the assets of the
Partnership or a related series of transactions that, taken together, result in
the sale or other disposition of all or substantially all of the assets of the
Partnership.

 

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

 

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

 

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

 

“Value” means, with respect to a Common
Share, the average of the daily market price as determined in accordance with
the next sentence for the ten (10) consecutive trading

 

13

 

days immediately preceding the Valuation Date.  The market price for each such trading day
shall be: (i) if the Common Shares are listed or admitted to trading on
any securities exchange or the Nasdaq National Market System, the closing price
on such day, or if no such sale takes place on such day, the average of the
closing bid and asked prices on such day; (ii) if the Common Shares are
not listed or admitted to trading on any securities exchange or the Nasdaq
National Market System, the last reported sale price on such day or, if no sale
takes place on such day, the average of the closing bid and asked prices on
such day, as reported by a reliable quotation source designated by the Board of
Directors of the General Partner; or (iii) if the Common Shares are not
listed or admitted to trading on any securities exchange or the Nasdaq National
Market System and no such last reported sale price or closing bid and asked
prices are available, the average of the reported high bid and low asked prices
on such day, as reported by a reliable quotation source designated by the Board
of Directors of the General Partner, or if there shall be no bid and asked
prices on such day, the average of the high bid and low asked prices, as so
reported, on the most recent day (not more than ten (10) days prior to the
date in question) for which prices have been so reported; provided that if
there are no bid and asked prices reported during the ten (10) days prior
to the date in question, the Value of the Common Shares shall be determined by
the Board of Directors of the General Partner acting in good faith on the basis
of such quotations and other information as it considers, in its reasonable
judgment, appropriate.  In the event the
Common Shares Amount includes Rights, then the Value of such Rights shall be
determined by the Board of Directors of the General Partner acting in good
faith on the basis of such quotations and other information as it considers, in
its reasonable judgment, appropriate, provided that the Value of any rights
issued pursuant to a “Shareholder Rights Plan” shall be deemed to have no value
unless a “triggering event” shall have occurred (i.e., if the Rights issued
pursuant thereto are no longer “attached” to the Common Shares and are able to
trade independently).

 

“Yearly Incentive Allocation Trigger” means
an incentive allocation calculated and payable for a yearly period in an
amount, not less than zero, equal to twenty five percent (25%) of the dollar
amount by which:

 

(i) (A) the Company Net Income for
such one-year period before Incentive Allocation and non-cash compensation
expense for such one-year period, without giving effect to the amount thereof
that was reduced because it represents the Limited Partners’ minority interest
in the Partnership for such one-year period, divided by (B) by the sum of (1) the
weighted average number of Common Shares outstanding during such one-year
period;  and (2) the weighted
average number of Common Units outstanding during such one-year period not held
by the Company or any of its Subsidiaries; exceeds

 

(ii) the product of

 

(A) an amount equal to (1) the
weighted average of the price per share of the Common Shares in the initial
public offering by the Company and the prices per share of the Common Shares in
any subsequent offerings by the Company, in each case at the time of issuance
thereof, multiplied by (2) the greater of (a) 8.00% and (b) 2.00%
plus the Ten Year Treasury Rate for such one year period, and

 

14

 

(B) the sum of (A) the weighted
average number of Common Shares outstanding during such one-year period and (B) the
weighted average number of Common Units outstanding during such year not held
by the Company or any of its Subsidiaries;

 

provided, that the foregoing calculations shall be adjusted to exclude
cumulative adjustments pursuant to changes in GAAP, as well as non-cash
expenses approved by a majority of the Independent Directors in each case after
discussion between the Special Limited Partner and the Independent Directors.

 

ARTICLE II

ORGANIZATIONAL MATTERS

 

Section 2.01           Formation.

 

The Partnership is a limited partnership
organized pursuant to the provisions of the Act.  The Partners hereby agree to continue the
Partnership 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.  The Partnership Interest of each Partner
shall be personal property for all purposes.

 

Section 2.02           Name.

 

The name of the Partnership is LNR Capital
Limited Partnership.  The Partnership’s
business may be conducted under any other name or names deemed advisable by the
General Partner, including the name of the General Partner or any Affiliate thereof,
but in no event shall the name “LNR” be eliminated from such name.  The words “Limited Partnership,” “L.P.,” “Ltd.”
or similar words or letters shall be included in the Partnership’s name where
necessary for the purposes of complying with the laws of any jurisdiction that
so requires.  The General Partner in its
sole and absolute discretion may change the name of the Partnership at any time
and from time to time and shall notify the Limited Partners of such change in
the next regular communication to the Limited Partners, but in no event shall
the name “LNR” be eliminated from such name.

 

Section 2.03           Registered
Office and Agent; Principal Office.

 

The address of the registered office of the
Partnership in the State of Delaware and the name and address of the registered
agent for service of process on the Partnership in the State of Delaware is The
Corporation Trust Company, Corporation Trust Center, 1209 Orange Street,
Wilmington, Delaware 19801.  The
principal office of the Partnership shall be 1601 Washington Avenue, Suite 800,
Miami Beach, FL 33139, or such other place as the General Partner may from time
to time designate by notice to the Limited Partners.  The Partnership may maintain offices at such
other place or places within or outside the State of Delaware as the General
Partner deems advisable.

 

15

 

Section 2.04           Power
of Attorney.

 

A.            Each
Limited Partner and each Assignee hereby constitutes and appoints the General
Partner, any other Person acting as Liquidator, and their duly authorized
officers and attorneys-in-fact, and each of those acting singly, in each case
with full power of substitution, as its true and lawful agent and
attorney-in-fact, with full power and authority in its name, place and stead
to:

 

(1)           execute,
acknowledge, deliver, file and record in the appropriate public offices (a) all
certificates, documents and other instruments (including, without limitation,
this Agreement and the Certificate of Limited Partnership and all amendments or
restatements thereof) that the General Partner or such 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; (b) all instruments that the General Partner
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 such
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 the Capital Contribution of any Partner; and (e) all
certificates, documents and other instruments relating to the determination of
the rights, preferences and privileges of Partnership Interests; and

 

(2)           execute,
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.

 

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

 

16

 

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

 

Section 2.05           Term.

 

The term of the Partnership commenced on August 16,
2005, the date on which the Certificate of Limited Partnership was filed in the
office of the Secretary of State of the State of Delaware, and shall continue
in perpetuity, unless the Partnership is dissolved sooner pursuant to the
provisions of Article 13 or as otherwise provided by law.

 

ARTICLE III

PURPOSE

 

Section 3.01           Purpose
and Business.

 

The purpose and nature of the business to be
conducted by the Partnership is (i) to conduct any business that may be
lawfully conducted by a limited partnership organized pursuant to the Act;
provided, however, that such business shall be limited to and conducted in such
a manner (A) as to permit the Company at all times to be classified as a
REIT for U.S. federal income tax purposes, unless the Company ceases to qualify
as a REIT for reasons other than the conduct of the business of the Partnership
including as provided in the next sentence and (B) as to not be required
to be registered as an investment company under the Investment Company Act of
1940, as amended; (ii) to enter into any partnership, joint venture,
limited liability company or other similar arrangement to engage in any of the
foregoing or to own interests in any entity engaged, directly or indirectly, in
any of the foregoing; and (iii) to do anything necessary or incidental to
the foregoing.  In connection with the
foregoing, and without limiting the Company’s right, in its sole discretion, to
cease qualifying as a REIT, the Partners acknowledge the Company’s current
status as a REIT inures to the benefit of all of the Partners and not solely
the General Partner.  The General Partner
shall also be empowered to do any and all acts and things necessary or prudent
to ensure that the Partnership will not be classified as a “publicly traded
partnership” for purposes of Section 7704 of the Code, including but not
limited to imposing restrictions on transfers and restrictions on redemptions.

 

17

 

Section 3.02           Powers.

 

The Partnership is empowered to do any and
all acts and things necessary, appropriate, proper, advisable, incidental to or
convenient for the furtherance and accomplishment of the purposes and business
described herein and for the protection and benefit of the Partnership,
including, without limitation, full power and authority, directly or through
its ownership interest in other entities, to enter into, perform and carry out
contracts of any kind, borrow money and issue evidences of indebtedness whether
or not secured by mortgage, deed of trust, pledge or other lien, acquire, own,
manage, sell, transfer and dispose of real-estate related securities, real
estate-related loans and other real estate-related assets, acquire, own,
manage, improve and develop real property, and lease, sell, transfer and
dispose of real property; provided, however, that the Partnership shall not
take, or refrain from taking, any action which, in the judgment of the General Partner,
in its sole and absolute discretion, (i) could adversely affect the
ability of the Company to continue to qualify as a REIT; (ii) could
subject the Company to any additional taxes under Section 857 or Section 4981
of the Code; or (iii) could violate any law or regulation of any
governmental body or agency having jurisdiction over the Company or its
securities, unless such action (or inaction) shall have been specifically
consented to by the General Partner in writing.

 

ARTICLE IV

CAPITAL CONTRIBUTIONS

 

Section 4.01           Capital
Contributions of the Partners.

 

A.            Initial
Capital Contributions on the Effective Date.  On the Effective Date, the Company, as
General Partner, and the Persons listed on Schedule A will make Capital
Contributions to the Partnership as set forth therein in cash or in kind.  On the Effective Date, the General Partner
will complete Exhibit A to reflect the Capital Contributions made by each
Partner, the Partnership Units assigned to each Partner and (in the case of
Common Units and General Partner Units) the Percentage Interest in the
Partnership represented by such Common Units and General Partner Units.  The Capital Accounts of the Partners and the
Carrying Values of the Partnership’s Assets will be determined as of the
Effective Date pursuant to Section I.D of Exhibit B hereto to reflect
the Capital Contributions made prior to and on the Effective Date.

 

B.            Partnership
Interest.  Each Partner shall own the
number of Common Units and other Partnership Units 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 Common Units or other Partnership Units (pursuant to any
Extraordinary Transaction or otherwise), or similar events having an effect on
any Partner’s Percentage Interest.  A
number of Partnership Units held by the Company equal to [    ] percent ([  ]%) of all outstanding Partnership Units
shall be deemed to be the General Partner Units and shall be the General
Partnership Interest.  All other
Partnership Units held by the Company, if any, shall be deemed to be Limited
Partnership Interests and shall be held by the Company in its capacity as a
Limited Partner in the Partnership.

 

18

 

C.            Capital
Contributions By Merger.  To the
extent the Partnership acquires any property by the merger or acquisition of
any other Person into the Partnership, Persons who receive Partnership
Interests in exchange for their interests in the Person merging into, or being
acquired by, the Partnership shall become Partners and shall be deemed, subject
to the provisions of Sections 4.02 and 12.02 hereof, to have made Capital
Contributions as provided in the applicable merger agreement and as set forth
in Exhibit A, as amended to reflect such deemed Capital Contributions.

 

D.            No
Obligation to Make Additional Capital Contributions.  Except as provided in Sections 4.02, 10.05 or
elsewhere in this Agreement, the Partners shall have no obligation to make any
additional Capital Contributions or loans to the Partnership.

 

Section 4.02           Issuances
of Additional Partnership Interests.

 

A.            The
General Partner is hereby authorized to cause the Partnership from time to time
to issue to the Partners (including the General Partner and its Affiliates) or
other Persons (including, without limitation, in connection with the
contribution of property to the Partnership) additional Common Units or other
Partnership Interests in one or more classes, or one or more series of any of
such classes, with such designations, preferences and relative, participating,
optional or other special rights, powers and duties, including rights, powers
and duties senior to the Limited Partner Interests issued on the Effective Date
and any other Common Units and other Partnership Interests thereafter issued,
all as shall be determined by the General Partner 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 such class or series of Partnership Interests; (ii) the right of each
such class or series of Partnership Interests to share in Partnership
distributions; and (iii) the rights of each such class or series of
Partnership Interests upon dissolution and liquidation of the Partnership;
provided that no such additional Partnership Units or other Partnership
Interests shall be issued to the General Partner, unless either (a)(1) the
additional Partnership Interests are issued in connection with the grant, award
or issuance of Common Shares or other equity interests by the Company, which
Common Shares or other equity interests have designations, preferences and
other rights such that the economic interests attributable to such Common
Shares or other equity interests are substantially similar to the designations,
preferences and other rights of the additional Partnership Interests issued to
the General Partner in accordance with this Section 4.02.A, and (2) the
Company shall make a Capital Contribution to the Partnership in an amount equal
to the proceeds raised in connection with such issuance, or (b) the
additional Partnership Interests are issued to all Partners in proportion to
their respective Percentage Interests. 
In addition, the Company may acquire Units from other Partners pursuant
to this Agreement.  In the event that the
Partnership issues Partnership Interests pursuant to this Section 4.02.A,
the General Partner shall make such revisions to this Agreement (without any
requirement of receiving approval of the Limited Partners) including but not
limited to the revisions described in Section 5.04, Section 6.01 and Section 8.06
hereof, as it deems necessary to reflect the issuance of such additional
Partnership Interests and the special rights, powers and duties associated
therewith.  Unless specifically
determined otherwise by the General Partner, any Partnership Interest issued
after the Effective Date shall represent Common Units.

 

19

 

B.            From
and after the date hereof, the Company shall not issue any additional Common
Shares (other than Common Shares issued pursuant to Section 8.06), or
rights, options, warrants or convertible or exchangeable securities containing
the right to subscribe for or purchase Common Shares (collectively “New
Securities”) other than to all holders of Common Shares unless (i) the
General Partner shall cause the Partnership to issue to the Company,
Partnership Interests or rights, options, warrants or convertible or
exchangeable securities of the Partnership having designations, preferences and
other rights, all such that the economic interests are substantially similar to
those of the New Securities; and (ii) the Company contributes to the
Partnership the proceeds from the issuance of such New Securities and from the
exercise of rights contained in such New Securities in accordance with Section 4.03.  Without limiting the foregoing, the Company
is expressly authorized to issue New Securities for no tangible value or for
less than fair market value, and the General Partner is expressly authorized to
cause the Partnership to issue to the Company corresponding Partnership
Interests, so long as (x) the General Partner concludes in good faith that such
issuance is in the interests of the Company and the Partnership (for example, and
not by way of limitation, the issuance of Common Shares and corresponding Units
pursuant to an employee stock purchase plan providing for employee grants to
employees of the Manager of any of its Affiliates or any director of the
General Partner (collectively, the “Employees”) or purchases of Common Shares
or employee stock options that have an exercise price that is less than the
fair market value of the Common Shares, either at the time of issuance or at
the time of exercise); and (y) the Company contributes all proceeds, if any,
from such issuance and exercise to the Partnership.

 

Section 4.03           Contribution
of Proceeds of Issuance of Common Shares. 
In connection with any issuance of New Securities pursuant to Section 4.02
other than the IPO, the Company shall contribute to the Partnership all
proceeds raised in connection with such issuance; provided that if the proceeds
actually received by the Company are less than the gross proceeds of such
issuance as a result of any underwriter’s discount or other expenses paid or
incurred in connection with such issuance, then the Company shall be deemed to
have made a Capital Contribution to the Partnership in the amount equal to the
sum of the net proceeds of such issuance plus the amount of such underwriter’s
discount and other expenses paid by the Company (which discount and expense
shall be treated as an expense for the benefit of the Partnership for purposes
of Section 7.04).  In the case of
Employee acquisitions of New Securities at a discount from fair market value or
for no value in connection with a grant of New Securities, the amount of such
discount representing compensation to such Employee, as determined by the
General Partner, shall be treated as an expense of the issuance of such New
Securities.

 

ARTICLE V

DISTRIBUTIONS

 

Section 5.01           Requirement
and Characterization of Distributions.

 

A.            Subject
to the rights and preferences of any outstanding class or series of Preferred
Units as set forth in the Certificate of Designations attached hereto, or as
otherwise provided herein with respect to Partnership Interests other than
Common Units, and except as provided in Section 5.01.B the General Partner
shall distribute an amount of Available Cash in

 

20

 

the sole and absolute discretion of the General Partner to the General
Partner and to Common Unitholders who are Partners on the Partnership Record
Date in accordance with their respective Percentage Interests on such
Partnership Record Date; provided that in no event may a Partner receive a
distribution of Available Cash with respect to a Common Unit if such Partner is
entitled to receive a distribution out of such Available Cash with respect to a
Common Share for which such Common Unit has been exchanged and such distribution
shall instead be made to the Company; provided further that each Common
Unitholder shall, generally be entitled to distributions of an annual amount of
Available Cash that is equal to the annual amount of dividends that a holder of
the number of Common Shares into which such Common Unitholder’s Common Units
could be redeemed at the then current Conversion Rate would be entitled.  The General Partner shall take such
reasonable efforts, as determined by it in its sole and absolute discretion and
consistent with the Company’s qualification as a REIT, to distribute Available
Cash (a) to the Partners so as to preclude any such distribution or
portion thereof from being treated as part of a sale of property to the
Partnership by a Partner under Section 707 of the Code or the Regulations
thereunder; provided that the General Partner and the Partnership shall not
have liability to any Partner under any circumstances as a result of any
distribution to such Partner being so treated and (b) to satisfy the requirements
for the Company to qualify as a REIT under the Code.  Unless otherwise expressly provided for
herein or in an agreement at the time a new class of Partnership Interests is
created in accordance with Article 4 hereof, no Partnership Interest shall
be entitled to a distribution in preference to any other Partnership Interest.

 

B.            Notwithstanding
the provisions of Section 5.01.A above or any other provision of this
Agreement, if for any period with respect to which a distribution is to be made
(a “Distribution Period”), a “Newly Issued Unit” (as such term is defined
below) is outstanding on the Partnership Record Date for such Distribution
Period, there shall not be distributed in respect of such Newly Issued Unit the
amount (the “Full Distribution Amount”) that would otherwise be distributed in
respect of such Unit in accordance with Section 5.01.A. Rather, the
General Partner shall cause to be distributed with respect to each such Newly
Issued Unit an amount equal to the Full Distribution Amount multiplied by a
fraction, the numerator of which equals the number of days such Newly Issued
Unit has been outstanding during the Distribution Period and the denominator of
which equals the total number of days in such Distribution Period.  Any Available Cash not distributed to the
holders of Units by operation of this Section 5.01.B shall be retained by
the Partnership and applied toward future distributions or payment of
Partnership expenses.  The General
Partner may, in its sole discretion, with respect to any distribution, waive
the application of this Section 5.01.B such that a Newly Issued Unit shall
receive the Full Distribution Amount (or any greater amount than would
otherwise be received under this Section 5.01.B but not in excess of the
Full Distribution Amount).  For purposes
of this Section 5.01.B, the term “Newly Issued Unit” shall mean, with
respect to any Distribution Period, a Common Unit issued during such
Distribution Period, except that the term “Newly Issued Unit” shall not include
(i) a Common Unit issued to the Company as a result of the contribution by
it of proceeds from the issuance of New Securities (as contemplated by Sections
4.02 and 4.03) or (ii) (unless otherwise provided by the General Partner)
any Common Units issued in connection with a split on or unit dividend of the
Common Units.

 

21

 

Section 5.02           Amounts
Withheld.

 

All amounts withheld pursuant to the Code or
any provisions of any state or local tax law and Section 10.05 hereof with
respect to any allocation, payment or distribution to the Partners or Assignees
shall be treated as amounts distributed to the Partners or Assignees pursuant
to Section 5.01 for all purposes under this Agreement.

 

Section 5.03           Distributions
Upon Liquidation.

 

Proceeds from a Terminating Capital
Transaction and any other cash received or reductions in reserves made after
commencement of the liquidation of the Partnership shall be distributed to the
Partners in accordance with Section 13.02.

 

Section 5.04           Revisions
to Reflect Issuance of Additional Partnership Interests.

 

In the event that the Partnership issues
additional Partnership Interests to the General Partner or any Additional
Limited Partner pursuant to Article 4 hereof, the General Partner shall
make such revisions to this Article 5 as it deems necessary to reflect the
issuance of such additional Partnership Interests and any special rights,
duties or powers with respect thereto.

 

ARTICLE VI

ALLOCATIONS

 

Section 6.01           Allocations
For Capital Account Purposes.  For
purposes of maintaining the Capital Accounts and in determining the rights of
the Partners among themselves, the Partnership’s items of income, gain, loss
and deduction (computed in accordance with Exhibit B hereof) shall be
allocated among the Partners in each taxable year (or portion thereof) as
provided herein below.

 

A.            After
taking into account the provisions of Section 6.01.B below, Net Income
shall be allocated

 

(i)            First,
to the Partners in the same ratio and reverse order as Net Loss was allocated
to such Partners pursuant to Section 6.01.C(ii), (iii), (iv), (v) and
(vi) for all fiscal years until the aggregate amount allocated to such
Partners pursuant to such provisions of Section 6.01.C equals the
aggregate amount allocated pursuant to this Section 6.01.A(i);

 

(ii)           Thereafter,
to the Partners in accordance with their respective Percentage Interests.

 

B.            (i)            Notwithstanding
the provisions of Section 6.01.A above, items of gross income shall first
be allocated to the holders of each class of Preferred Units, (a) on a
class by class basis (1) in the order of priority in which each such class
is entitled to receive distributions pursuant to the provisions of Section 5.01
and/or the Certificate of Designations attached hereto and (2) in an
amount equal to the aggregate distributions made to each such class of
Preferred Units

 

22

 

pursuant to the provisions of Section 5.01
and/or the Certificates of Designations attached hereto (other than
distributions properly treated as return of capital), and (b) within each
such class of Preferred Units in proportion to the distributions with respect
to such class referred to in clause (2) above received by each holder of
Preferred Units (other than distributions properly treated as return of
capital).

 

(ii)           In
the event of the redemption of any Common Units that have been converted from
Preferred Units (“Converted Units”) pursuant to Section 8.06.A or in the
event of a liquidation of the Partnership (or a Partner’s interest therein, who
is a holder of any such Converted Units), there shall be a special allocation
of Net Income (or items of gross income if there is insufficient Net Income) to
the Partner who holds such Converted Units being redeemed or liquidated and
with respect to such Converted Units in an amount such that the Adjusted
Capital Account balance allocable to each such Converted Unit is equal to the
Adjusted Capital Account balance allocable to each other Common Unit (other
than any Converted Unit not being redeemed at such time).  This Section 6.01.B(ii) shall not
apply if the Company exercises its right to purchase such Converted Units
pursuant to Section 8.06.B. However, this Section 6.01.B(ii) shall
apply if the Company or any other transferee of a Converted Unit subsequently
has such Converted Unit redeemed or liquidated by the Partnership.

 

C.            After
giving effect to the special allocations set forth in Section 1 of Exhibit C
attached hereto, Net Losses shall be allocated to the Partners in the following
order:

 

(i)            First,
in the same ratio as Net Income was allocated to the Partners pursuant to Section 6.01.A(ii) for
all Taxable Periods until the aggregate amount allocated to such Partners
pursuant to this Section 6.01.C(i) equals the aggregate amount
allocated to such Partners pursuant to Section 6.01.A(ii);

 

(ii)           Second,
in proportion to their Percentage Interests until each Partner’s Modified
Adjusted Capital Account balance has been reduced to zero, excluding, for this
purpose, the portion of any such Capital Account attributable to Capital
Contributions made with respect to Preferred Units;

 

(iii)          Third,
to the holders of each class of Preferred Units, on a class by class basis, in
the reverse priority in which each such class is entitled to distributions
pursuant to the provisions of Section 5.01.A and/or the Certificate of
Designations attached hereto, and within such class to each holder of such
class of Preferred Units, pro rata, in proportion to the portion of their
Modified Adjusted

 

23

 

Capital Account balance attributable to
Capital Contributions made with respect to such class of Preferred Units until
such portion of their Modified Adjusted Capital Account balance has been reduced
to zero; and

 

(iv)          Fourth,
100% to the General Partner.

 

D.            The
Partners agree that Nonrecourse Liabilities of the Partnership shall be
allocated among the Partners in accordance with the provisions of Regulations Section 1.752-3,
as modified by any guidance published by the Internal Revenue Service, or
otherwise reasonably interpreted.

 

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

 

In the event that the Partnership issues
additional Partnership Interests to the General Partner, or any Limited Partner
pursuant to Article 4 hereof, the General Partner shall make such
revisions to this Section 6.01 as it determines are necessary to reflect
the terms of the issuance of such additional Partnership Interests, including
making preferential allocations to certain classes of Partnership
Interests.  Such revisions shall not
require the consent or approval of any other Partner.

 

Section 6.02           Incentive
Allocation.

 

An amount equal to the Incentive Allocation
shall be reallocated pro rata from each Partner’s Capital Account to the
Capital Account of the Special Unit Holder, quarterly, in arrears.  The Special Unit Holder shall be allocated an
Incentive Allocation in the current quarter which will be limited to the amount
by which the Yearly Incentive Allocation Trigger is greater than the amount the
Special Unit Holder received as an Incentive Allocation in the prior three
quarters cumulatively.  The Special Unit
Holder shall compute each installment of the Incentive Allocation within
fifteen (15) days after the end of each fiscal quarter with respect to which
such installment is to be allocated.  A
copy of the computations made by the Special Unit Holder to calculate such
installment shall thereafter, promptly be delivered to the Board of Directors
and, upon such delivery the installment of the Incentive Allocation shown in
such computations shall be allocated and paid to the Special Unit Holder no
later than the date which is five (5) Business Days after the date of
delivery to the Board of Directors of such computation.

 

ARTICLE VII

MANAGEMENT AND OPERATIONS OF BUSINESS

 

Section 7.01           Management.

 

A.            Except
as otherwise expressly provided in this Agreement, all management powers over
the business and affairs of the Partnership are and shall be exclusively

 

24

 

vested in the General Partner, and no Limited Partner shall have any
right to participate in or exercise control or management power over the
business and affairs of the Partnership. 
The General Partner may not be removed by the Limited Partners with or
without cause.  In addition to the powers
now or hereafter granted a general partner of a limited partnership under
applicable law or which are granted to the General Partner under any other
provision of this Agreement, the General Partner, subject to Section 7.03
hereof, 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 3.02 hereof and to effectuate the purposes set
forth in Section 3.01 hereof, including, without limitation:

 

(1)           the
making of any expenditures, the lending or borrowing of money (including,
without limitation, making prepayments on loans and borrowing money to permit
the Partnership to make distributions to its Partners in such amounts as will
permit the Company (so long as the Company qualifies as a REIT) to avoid the
payment of any federal income tax (including, for this purpose, any excise tax
pursuant to Section 4981 of the Code) and to make distributions to its
shareholders in amounts sufficient to permit the Company to maintain REIT status),
the assumption or guarantee of, or other contracting for, indebtedness and
other liabilities, the issuance of evidence of indebtedness (including the
securing of the same by deed, mortgage, deed of trust or other lien or
encumbrance on the Partnership’s and the Partnership’s Subsidiaries’ assets)
and the incurring of any obligations it deems necessary for the conduct of the
activities of the Partnership or its Subsidiaries;

 

(2)           the
making of tax, regulatory and other filings, or rendering of periodic or other
reports to governmental or other agencies having jurisdiction over the business
or assets of the Partnership, the registration of any class of securities of
the Partnership under the Securities Exchange Act of 1934, as amended, and the
listing of any debt securities of the Partnership on any exchange;

 

(3)           the
acquisition, disposition, mortgage, pledge, encumbrance, hypothecation or
exchange of any assets of the Partnership or the Partnership’s Subsidiaries,
including, without limitation, in connection with a resecuritization
transaction and 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 its Subsidiaries or the
merger or other combination of the Partnership with or into another entity (all
of the foregoing subject to any prior approval only to the extent required by Section 7.03
hereof);

 

(4)           the
use of the assets of the Partnership or of its Subsidiaries (including, without
limitation, cash on hand) for any purpose

 

25

 

consistent with the terms of this Agreement
and the Act and on any terms it sees fit, including, without limitation, the
financing of the conduct of the operations of the Company, the Partnership or
any of the Partnership’s Subsidiaries, the lending of funds to other Persons
(including, without limitation, the Subsidiaries of the Partnership and/or the
Company) and the repayment of obligations of the Partnership and its
Subsidiaries and any other Person in which it has an equity investment, and the
making of capital contributions to its Subsidiaries;

 

(5)           the
establishment of reserves;

 

(6)           the
purchase, sale, management, operation, leasing, landscaping, repair,
alteration, demolition or improvement of any real property or improvements
owned by the Partnership or any Subsidiary of the Partnership;

 

(7)           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 or any of its Subsidiaries’ assets;

 

(8)           the
opening and maintenance of bank accounts for the Partnership and the drawing of
checks and orders for the payment of money;

 

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

 

(10)         holding,
managing, investing and reinvesting cash and other assets of the Partnership
and its Subsidiaries;

 

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

 

(12)         the
establishment of one or more divisions of the Partnership;

 

(13)         the
determination of the hiring and compensation of employees and the determination
of any of the actions that the General Partner may take pursuant to Section 7.04.B.

 

(14)         the
maintenance of such insurance for the benefit of the Partnership, its
Subsidiaries, their respective partners, members or

 

26

 

stockholders and directors and officers of
the General Partner as it deems necessary or appropriate;

 

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

 

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

 

(17)         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);

 

(18)         the
determination of the fair market value of any Partnership property distributed
in kind using such reasonable method of valuation as the General Partner may
adopt;

 

(19)         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;

 

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

 

(21)         the
exercise of any of the powers of the General Partner enumerated in this
Agreement on behalf of any Person in which

 

27

 

the Partnership does not have an interest
pursuant to contractual or other arrangements with such Person;

 

(22)         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 necessary or appropriate, in the judgment of the General Partner,
for the accomplishment of any of the powers of the General Partner enumerated
in this Agreement; and

 

(23)         the
issuance of additional Partnership Units, as appropriate, in connection with
Capital Contributions by Additional Limited Partners and additional Capital
Contributions by Partners pursuant to Article 4 hereof.

 

B.            Each
of the Limited Partners agrees that the General Partner is authorized to
execute, deliver and perform the above-mentioned agreements and transactions on
behalf of the Partnership without any further act, approval or vote of the
Partners, notwithstanding any other provision of this Agreement (except as
provided in Section 7.03), the Act or any applicable law, rule or
regulation, to the fullest extent permitted under the Act or other applicable
law, rule or regulation.  The
execution, delivery or performance by the General Partner or the Partnership of
any agreement authorized or permitted under this Agreement shall not constitute
a breach by the General Partner of any duty that the General Partner may owe
the Partnership or the Limited Partners or any other Persons under this
Agreement or of any duty stated or implied by law or equity.

 

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

 

D.            To
the extent permitted by law, each Limited Partner hereby waives any fiduciary
or similar duty that the General Partner may owe to it under applicable law.

 

E.             In
exercising its authority under this Agreement, the General Partner may, but
shall be under no obligation to, take into account the tax consequences to any
Partner of any action taken by it.  The
General Partner and the Partnership shall not have liability to a Limited
Partner under any circumstances, as a result of an income tax liability
incurred by such Limited Partner as a result of an action (or inaction) by the
General Partner taken pursuant to its authority under this Agreement and in
accordance with the terms of Section 7.03. The Limited Partners expressly
acknowledge that the General Partner is acting on behalf of the Partnership,
the Company and the Company’s stockholders collectively.

 

Section 7.02           Certificate
of Limited Partnership.

 

The General Partner has previously filed the
Certificate of Limited Partnership with the Secretary of State of the State of
Delaware as required by the Act.  The
General Partner

 

28

 

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 of Limited Partnership 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 8.05.A(4) hereof, the General
Partner shall not be required, before or after filing, to deliver or mail a
copy of the Certificate of Limited Partnership or any amendment thereto to any
Limited Partner.

 

Section 7.03           Restrictions
on General Partner Authority.

 

The General Partner may not take any action
in contravention of an express prohibition or limitation of this Agreement
without the written Consent of Limited Partners holding eighty-five percent
(85%) of the outstanding Common Units of the Limited Partners (excluding
Limited Partner Common Units held by the Company), or such other percentage of
the Partners as may be specifically provided for under a provision of this
Agreement.

 

Section 7.04           Reimbursement
of the General Partner and the Company.

 

A.            Except
as provided in this Section 7.04 and elsewhere in this Agreement
(including the provisions of Articles 5 and 6 regarding distributions,
payments, and allocations to which it may be entitled), the General Partner
shall not be compensated for its services as general partner of the
Partnership.

 

B.            The
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 relating to the ownership and operation of, or for the benefit of, the
Partnership (including, without limitation, (i) expenses relating to the
ownership of interests in and operation of the Partnership, (ii) compensation
of the Company’s officers and, if applicable, employees including, without
limitation, payments under the General Partner’s stock incentive plans that
provide for stock units, or other phantom stock, pursuant to which Employees
will receive payments based upon dividends on or the value of Common Shares, (iii) director
fees and expenses, (iv) fees, expenses and other amounts paid or
reimbursed pursuant to the Management Agreement, including, without limitation,
expenses incurred and amounts paid by the General Partner pursuant to the
indemnification obligations of the General Partner contained in Section 11(a) of
the Management Agreement, (v) insurance premiums and other costs
associated with obtaining and maintaining insurance for the Partnership and its
Subsidiaries and the Company and its Subsidiaries, (vi) costs associated
with establishment and maintenance of any credit facilities and other
indebtedness related expenses, (vii) all other expenses incurred in
connection with the fulfillment of its duties under Section 7.01
hereunder, and (viii) all costs and expenses of being a public company,
including costs of filings with the SEC, reports, costs associated with
corporate administration and corporate governance, and other distributions to
its stockholders); provided

 

29

 

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.

 

C.            The
Partners acknowledge that all such expenses and all operating and
administrative expenses of the General Partner are deemed to be for the benefit
of the Partnership.  Such reimbursement
shall be in addition to any reimbursement made as a result of indemnification
pursuant to Section 7.07 hereof.

 

D.            In
the event that the Company shall elect to purchase from its shareholders Common
Shares for the purpose of delivering such Common Shares to satisfy an obligation
under any dividend reinvestment program adopted by the Company, any Employee
incentive plan adopted by the Company, or any similar obligation or arrangement
undertaken by the Company in the future or for the purpose of retiring such
Common Shares, the purchase price paid by the Company for such Common Shares
and any other expenses incurred by the Company in connection with such purchase
shall be considered expenses of the Partnership and shall be advanced to the
Company or reimbursed to the Company, subject to the condition that: (i) if
such Common Shares subsequently are sold by the Company, the Company shall pay
to the Partnership any proceeds received by the Company for such Common Shares
(which sales proceeds shall include the amount of dividends reinvested under
any dividend reinvestment or similar program provided that a transfer of Common
Shares for Units pursuant to Section 8.06 would not be considered a sale
for such purposes); and (ii) if such Common Shares are not retransferred
by the Company within thirty (30) days after the purchase thereof, or the
Company otherwise determines not to retransfer such Common Shares, the Company,
as General Partner, shall cause the Partnership to redeem a number of General
Partner Units held by the Company equal to the product obtained by dividing the
number of such Common Shares by the Conversion Factor (in which case such
advancement or reimbursement of expenses shall be treated as having been made
as a distribution in redemption of such number of Units held by the Company).

 

Section 7.05           Outside
Activities of the General Partner.

 

The General Partner shall not directly or
indirectly enter into or conduct any business other than in connection with the
ownership, acquisition and disposition of Partnership Interests and the
management of the business of the Partnership, and such activities as are
incidental thereto.  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.

 

Section 7.06           Contracts
with Affiliates.

 

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

 

30

 

B.            Except
as provided in Section 7.05, the Partnership may transfer assets to joint
ventures, other partnerships, corporations or other business entities in which
it is or thereby becomes a participant upon such terms and subject to such
conditions consistent with this Agreement and applicable law as the General
Partner, in its sole and absolute discretion, believes are advisable.

 

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

 

D.            The
General Partner, in its sole and absolute discretion and without the approval
of the Limited Partners, may propose and adopt, on behalf of the Partnership,
employee benefit plans, stock option plans, and similar plans funded by the
Partnership for the benefit of Employees in respect of services performed,
directly or indirectly, for the benefit of the Partnership, the General
Partner, or any Subsidiaries of the Partnership.

 

E.             The
General Partner is expressly authorized to enter into, in the name and on
behalf of the Partnership, agreements with various Affiliates of the
Partnership and the General Partner, on such terms as the General Partner, in
its sole and absolute discretion, believes are advisable, including, without
limitation, such agreements as contained in the Management Agreement.

 

Section 7.07           Indemnification.

 

A.            To
the fullest extent permitted by Delaware law, the Partnership shall indemnify
each Indemnitee from and against any and all losses, claims, damages,
liabilities, joint or several, expenses (including, without limitation,
attorneys fees and other legal fees and expenses), judgments, fines,
settlements, and other amounts arising from any and all claims, demands,
actions, suits or proceedings (actual or threatened), civil, criminal,
administrative or investigative, that relate to the operations of the
Partnership or the Company as set forth in this Agreement, in which such
Indemnitee may be involved, or is threatened to be involved, as a party or
otherwise by reason of such Person’s service to or on behalf of or management
of affairs of the Partnership, its properties, business or affairs, unless it
is established that: (i) the act or omission giving rise to the claim,
demand, suit or proceeding constituted bad faith, willful misconduct, gross
negligence or reckless disregard. 
Without limitation, the foregoing indemnity 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) or otherwise for any indebtedness
of the Partnership or any Subsidiary of the Partnership (including without
limitation, any indebtedness which the Partnership or any Subsidiary of the
Partnership has assumed or taken subject to), and the General Partner is hereby
authorized and empowered, on behalf of the Partnership, to enter into one or
more indemnity agreements consistent with the provisions of this Section 7.07
in favor of any Indemnitee having or potentially having liability for any such
indebtedness.  The termination of any
proceeding by conviction of an Indemnitee or upon a plea of nolo contendere or its equivalent by an
Indemnitee, or an entry of an order of probation against an Indemnitee prior to
judgment, creates a rebuttable presumption that such Indemnitee acted in a
manner contrary to that specified in this

 

31

 

Section 7.07.A.  Any
indemnification pursuant to this Section 7.07 shall be made only out of
the assets of the Partnership, and neither the General Partner nor any Limited
Partner shall have any obligation to contribute to the capital of the
Partnership, or otherwise provide funds, to enable the Partnership to fund its
obligations under this Section 7.07.

 

B.            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 the
proceeding upon receipt by the Partnership of (i) a written affirmation by
the Indemnitee of the Indemnitee’s good faith belief that the standard of
conduct necessary for indemnification by the Partnership as authorized in Section 7.07.A.
has been met, and (ii) a written undertaking by or on behalf of the
Indemnitee to repay the amount if it shall ultimately be determined that the
standard of conduct has not been met.

 

C.            The
indemnification provided by this Section 7.07 shall be in addition to any
other rights to which an Indemnitee or any other Person may be entitled under
any agreement, pursuant to any vote of the Partners, as a matter of law or
otherwise, and shall continue as to an Indemnitee who has ceased to serve in
such capacity unless otherwise provided in a written agreement pursuant to
which such Indemnitee is indemnified.

 

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

 

E.             For
purposes of this Section 7.07, the Partnership shall be deemed to have
requested an Indemnitee to serve as fiduciary of an Employee benefit plan
whenever the performance by it of its duties to the Partnership also imposes
duties on, or otherwise involves services by, it to the plan or participants or
beneficiaries of the plan; excise taxes assessed on an Indemnitee with respect
to an employee benefit plan pursuant to applicable law shall constitute fines
within the meaning of Section 7.07; and actions taken or omitted by the
Indemnitee with respect to an employee benefit plan in the performance of its
duties for a purpose reasonably believed by it to be in the interest of the
participants and beneficiaries of the plan shall be deemed to be for a purpose
which is not opposed to the best interests of the Partnership.

 

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

 

G.            An
Indemnitee shall not be denied indemnification in whole or in part under this Section 7.07
because the Indemnitee had an interest in the transaction with respect to which
the indemnification applies if the transaction was otherwise permitted by the
terms of this Agreement.

 

H.            The
provisions of this Section 7.07 are for the benefit of the Indemnitees,
their heirs, successors, assigns and administrators and shall not be deemed to
create any rights for the benefit of any other Persons.  Any amendment, modification or repeal of this
Section 7.07

 

32

 

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 7.07,
as in effect immediately prior to such amendment, modification, or repeal with
respect to claims arising from or relating to matters occurring, in whole or in
part, prior to such amendment, modification or repeal, regardless of when such
claims may arise or be asserted.

 

Section 7.08           Liability
of the General Partner.

 

A.            Notwithstanding
anything to the contrary set forth in this Agreement, the General Partner and
its officers and directors shall not be liable for monetary damages to the
Partnership, any Partners or any Assignees for losses sustained or liabilities
incurred as a result of errors in judgment or of any act or omission if the
General Partner acted in good faith.

 

B.            The
Limited Partners expressly acknowledge that, as stated in Section 7.01.D,
the General Partner is acting on behalf of the Partnership and the shareholders
of the Company collectively, that the General Partner is under no obligation to
consider the separate interests of the Limited Partners in deciding whether to
cause the Partnership to take (or decline to take) any actions, and that the
General Partner shall not be liable for monetary damages for losses sustained,
liabilities incurred, or benefits not derived by Limited Partners in connection
with such decisions, provided that the General Partner has acted in good faith.

 

C.            Subject
to its obligations and duties as General Partner set forth in Section 7.01.A
hereof, the General Partner may exercise any of the powers granted to it by
this Agreement and perform any of the duties imposed upon it hereunder either
directly or by or through its agents. 
The General Partner shall not be responsible for any misconduct or
negligence on the part of any such agent appointed by the General Partner in
good faith.

 

D.            Any
amendment, modification or repeal of this Section 7.08 or any provision
hereof shall be prospective only and shall not in any way affect the
limitations on the General Partner’s and its officers’ and directors’ liability
to the Partnership and the Limited Partners under this Section 7.08 as in
effect immediately prior to such amendment, modification or repeal with respect
to claims arising from or relating to matters occurring, in whole or in part,
prior to such amendment, modification or repeal, regardless of when such claims
may arise or be asserted.

 

Section 7.09           Other
Matters Concerning the General Partner

 

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

 

B.            The
General Partner may consult with legal counsel, accountants, appraisers,
management consultants, investment bankers, 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

 

33

 

conclusively presumed to have been done or omitted in good faith and in
accordance with such opinion.

 

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

 

D.            Notwithstanding
any other provisions of this Agreement or the Act, any action of the General
Partner on behalf of the Partnership or any decision of the General Partner to
refrain from acting on behalf of the Partnership, undertaken in the good faith
belief that such action or omission is necessary or advisable in order to
protect the ability of the Company to continue to qualify as a REIT is
expressly authorized under this Agreement and is deemed approved by all of the
Limited Partners.

 

Section 7.10           Title
to Partnership Assets.

 

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

 

Section 7.11           Reliance
by Third Parties.

 

Notwithstanding anything to the contrary in
this Agreement, any Person dealing with the Partnership shall be entitled to
assume that the General Partner has full power and authority, without consent
or approval of any other Partner or Person, to encumber, sell or otherwise use
in any manner any and all assets of the Partnership 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. 
Each Limited Partner hereby waives any and all defenses or other
remedies which may be available against such Person to contest, negate or
disaffirm any action of the General Partner in connection with any such dealing.  In no event shall any Person dealing with the
General Partner or its representatives be obligated to ascertain that the terms
of this Agreement have been complied with or to inquire into the necessity or
expedience of any act or action of the General Partner or its representatives.

 

34

 

Each and every certificate, document or other instrument executed on
behalf of the Partnership by the General Partner or its representatives shall
be conclusive evidence in favor of any and every Person relying thereon or
claiming thereunder that (i) at the time of the execution and delivery of
such certificate, document or instrument, this Agreement was in full force and
effect; (ii) the Person executing and delivering such certificate,
document or instrument was duly authorized and empowered to do so for and on
behalf of the Partnership; and (iii) such certificate, document or
instrument was duly executed and delivered in accordance with the terms and
provisions of this Agreement and is binding upon the Partnership.

 

Section 7.12           Special
Servicing.

 

To the extent that the Partnership, any
Subsidiaries of the Partnership or the General Partner, with respect to any
investment has the right to appoint, terminate or replace the special servicer
in any such investment, the Company agrees to appoint or cause the appointment
of LNR Partners, Inc. (“LNR Partners”) as special servicer with
respect to such investment, or if LNR Partners is the special servicer, to
maintain LNR Partners in such role.

 

Section 7.13           Collateral
Administration Services.

 

To the extent
that the Partnership, any Subsidiaries of the Partnership or the General
Partner, with respect to any investment has the right to appoint the collateral
administrator in any such investment, the Company agrees to appoint or cause to
be appointed LNR Partners as collateral administrator with respect to such
investment, or if LNR Partners is the collateral administrator, to maintain LNR
Partners in such role.

ARTICLE VIII

RIGHTS AND OBLIGATIONS OF LIMITED PARTNERS

 

Section 8.01           Limitation
of Liability.

 

The Limited Partners shall have no liability
under this Agreement except as expressly provided in this Agreement, including Section 10.05
hereof, or under the Act.

 

Section 8.02           Management
of Business.

 

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

 

Section 8.03           Outside
Activities of Limited Partners.

 

Subject to any agreements entered into
pursuant to Section 7.06.E hereof and any other agreements entered into by
a Limited Partner or its Affiliates with the Partnership or any of its
Subsidiaries, any Limited Partner (other than the Company) and any officer,
director, employee, agent, trustee, Affiliate or shareholder of any Limited
Partner shall be entitled to and may have business interests and engage in
business activities in addition to those relating to the Partnership, including
business interests and activities that are in direct competition with the
Partnership or that are enhanced by the activities of the Partnership.  Neither the Partnership nor

 

35

 

any Partners shall have any rights by virtue of this Agreement in any
business ventures of any Limited Partner or Assignee.  None of the Limited Partners (other than the
Company) nor any other Person shall have any rights by virtue of this Agreement
or the Partnership relationship established hereby in any business ventures of
any other Person 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.

 

Section 8.04           Return
of Capital.

 

Except pursuant to the right of redemption
set forth in Section 8.06, no Limited Partner shall be entitled to the
withdrawal or return of its Capital Contribution, except to the extent of distributions
made pursuant to this Agreement or upon termination of the Partnership as
provided herein.  Except to the extent
provided by Exhibit C hereof or 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 profits, losses or distributions.

 

Section 8.05           Rights
of Limited Partners Relating to the Partnership.

 

A.            In
addition to the other rights provided by this Agreement or by the Act, and
except as limited by Section 8.05.C 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 copying and administrative charges as the General
Partner may establish from time to time):

 

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

 

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

 

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

 

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

 

(5)           to
obtain true and full information regarding the amount of cash and a description
and statement of any other property or services contributed by each Partner and
which each Partner has agreed to

 

36

 

contribute in the future, and the date on
which each became a Partner.

 

B.            The
Partnership shall notify each Limited Partner, upon request, of the then
current Conversion Factor and the Common Shares Amount per Common Unit and,
with reasonable detail, how the same was determined.

 

C.            Notwithstanding
any other provision of this Section 8.05, 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 confidential and/or proprietary information,
the disclosure of which the General Partner in good faith believes is not in
the best interests of the Partnership or the Company or could damage the
Partnership or the Company or their respective businesses; or (ii) the
Partnership is required by law or by agreements with an unaffiliated third
party to keep confidential.

 

Section 8.06           Redemption
Right.

 

A.            Subject
to Sections 8.06.B and 8.06.C hereof, on or after the Effective Date, each
Limited Partner (other than the Company) that is a Common Unitholder shall have
the right (the “Redemption Right”) to require the Partnership to redeem on a
Specified Redemption Date all or a portion of the Common Units held by such
Limited Partner at a redemption price per Common Unit equal to and in the form
of the Cash Amount to be paid by the Partnership.  The Redemption Right shall be exercised
pursuant to a Notice of Redemption delivered to the Partnership (with a copy to
the Company) by the Limited Partner who is exercising the redemption right (the
“Redeeming Partner”); provided, however, that the Partnership shall not be
obligated to satisfy such Redemption Right if the Company elects to purchase
the Common Units subject to the Notice of Redemption pursuant to Section 8.06.B.
A Limited Partner may not exercise the Redemption Right for less than one
thousand (1,000) Common Units or, if such Limited Partner holds less than one
thousand (1,000) Common Units, all of the Common Units held by such Partner.  The Redeeming Partner shall have no right,
with respect to any Common Units so redeemed, to receive any distributions paid
on or after the Specified Redemption Date. 
The Assignee of any Limited Partner may exercise the rights of such
Limited Partner pursuant to this Section 8.06, 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 an Assignee on behalf of a Limited Partner, the Cash Amount shall be
paid by the Partnership directly to such Assignee and not to such Limited
Partner.

 

B.            Notwithstanding
the provisions of Section 8.06.A, upon an election by a Limited Partner
(other than the Company) to exercise the Redemption Right, the Company may, in
its sole and absolute discretion (subject to the limitations on ownership and
transfer of Common Shares set forth in the articles of incorporation of the
Company), elect to assume directly and satisfy a Redemption Right by paying to
the Redeeming Partner either the Cash Amount or the Common Shares Amount, as
the Company determines in its sole and absolute discretion, whereupon the
Company shall acquire the Common Units offered for redemption by the Redeeming
Partner and shall be treated for all purposes of this Agreement as the owner of
such Common Units.  If the Company shall
elect to exercise its right to purchase Common Units

 

37

 

under this Section 8.06.B with respect to a Notice of Redemption, it
shall so notify the Redeeming Partner within five (5) Business Days after
the receipt by it of such Notice of Redemption. 
Unless the Company shall exercise its right to purchase Common Units
from the Redeeming Partner pursuant to this Section 8.06.B, the Company
shall not have any obligation to the Redeeming Partner or the Partnership with
respect to the Redeeming Partner’s exercise of the Redemption Right.  In the event the Company shall exercise its
right to purchase Common Units with respect to the exercise of a Redemption
Right in the manner described in the first sentence of this Section 8.06.B,
the Partnership shall have no obligation to pay any amount to the Redeeming
Partner with respect to such Redeeming Partner’s exercise of such Redemption
Right, and each of the Redeeming Partner, the Partnership, and the Company
shall treat the transaction between the Company and the Redeeming Partner, for
federal income tax purposes, as a sale of the Redeeming Partner’s Common Units
to the Company.  Each Redeeming Partner
agrees to execute such documents as the Company may reasonably require in
connection with the issuance of Common Shares upon exercise of the Redemption
Right.

 

C.            Notwithstanding
the provisions of Section 8.06.A and Section 8.06.B, a Partner shall
not be entitled to exercise the Redemption Right pursuant to Section 8.06.A
if the delivery of Common Shares to such Partner on the Specified Redemption
Date by the Company pursuant to Section 8.06.B (regardless of whether or
not the Company would in fact exercise its rights under Section 8.06.B)
would:

 

(1)           violate
any provision of the Certificate of Incorporation or the bylaws of the Company
as each is in effect on the Specified Redemption Date;

 

(2)           adversely
affect the Company’s ability to qualify as a real estate investment trust under
the Code or subject the Company to any additional taxes under Section 857
or Section 4981 of the Code;

 

(3)           constitute
or be likely to constitute a violation of any applicable federal or state
securities laws;

 

(4)           result
in the Company being “closely held” within the meaning of Section 856(h) of
the Code;

 

(5)           cause
the Partnership to become a “publicly traded partnership” under the Code; and

 

(6)           cause
the Partnership to cease to be classified as a partnership for federal income
tax purposes, except in the case of the exercise by all Common Unitholders
(other than the Company) of their Redemption Right with respect to 100% of the
Common Units held by them.

 

D.            In
the event that the Partnership issues additional Partnership Interests pursuant
to Section 4.02.A hereof, the General Partner shall make such revisions to
this Section 8.06 as it determines are necessary to reflect the issuance
of such additional Partnership Interests.

 

38

 

E.             Each
Partner covenants and agrees that all Common Units delivered for redemption
pursuant to this Section 8.06 shall be delivered to the Partnership or the
General Partner, as the case may be, free and clear of all Liens.  Notwithstanding anything contained herein to
the contrary, neither the General Partner nor the Partnership shall be under
any obligation to acquire Common Units which are or may be subject to any
Liens. Each Partner further agrees that, if any state or local property transfer
or documentary stamp tax is payable as a result of the transfer of its Common
Units to the Partnership or the General Partner pursuant to this Section 8.06,
such Partner shall assume and pay such transfer or documentary stamp tax.

 

F.             Upon
the redemption of Common Units pursuant to this Section 8.06, (i) all
such redeemed Partnership Units (other than Partnership Units redeemed pursuant
to Section 8.06.B.) 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 Common 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 the
General Partner assumes the obligation to satisfy a Redemption Right pursuant
to Section 8.06.B., adjust the number of Units and the Percentage Interest
of the General Partner to reflect the transfer of such Common Units to the
General Partner.

 

Section 8.07           Buy-out
of Special Units.

 

A.            If
the Company terminates its relationship with the Manager, pursuant to
Section 13(b) of the Management Agreement, or if the Manager terminates
its relationship with the Company pursuant to Section 15(c) of the
Management Agreement the Company shall repurchase, concurrently with such
termination, all of the Special Units outstanding at the date of such
termination for an amount equal to the product of (x) the sum of the Incentive
Allocations earned during the 12-month period immediately preceding the date of
such termination and (y) four.

 

B.            The
Company may repurchase all of the Special Units outstanding effective upon
sixty (60) days’ prior written notice from the Board of Directors to the
Manager, for payment of an amount equivalent to the Manager's Capital Account
with respect to its  Special Units, if the
Company terminates the Management Agreement pursuant to Section 15(a)
thereof.

 

39

 

 

Section 8.08           Adjustments
to Conversion Factor.

 

A.            The
Conversion Factor shall be adjusted in the event that the Company (i) declares
or pays a dividend on its outstanding Common Shares in Common Shares or makes a
distribution to all holders of its outstanding Common Shares in Common Shares; (ii) subdivides
its outstanding Common Shares; or (iii) combines its outstanding Common
Shares into a smaller number of Common Shares. 
The then-current Conversion Factor shall be adjusted by multiplying the
Conversion Factor by a fraction, the numerator of which shall be the number of
Common Shares issued and outstanding on the record date for such dividend,
distribution, subdivision or combination (assuming for such purpose that such
dividend, distribution, subdivision or combination has occurred as of such
time), and the denominator of which shall be the actual number of Common Shares
(determined without the above assumption) issued and outstanding on the record
date for such dividend, distribution, subdivision or combination.

 

B.            Any
adjustment to the Conversion Factor shall become effective immediately after
the effective date of such event retroactive to the record date, if any, for
such event (provided, however, if a Notice of Redemption is given prior to such
a record date and the Specified Redemption Date is after such a record date,
then the adjustment to the Conversion Factor shall, with respect to such
redeeming Partner, be retroactive to the date of such Notice of Redemption).

 

C.            It
is intended that adjustments to the Conversion Factor are to be made in order
to avoid unintended dilution or anti-dilution as a result of transactions in
which Common Shares are issued, redeemed or exchanged without a corresponding
issuance, redemption or exchange of Common Units or of Preferred Units that are
convertible into Common Units.

 

40

 

D.            If,
prior to a Specified Redemption Date, Rights (other than Rights issued pursuant
to an employee benefit plan or other compensation arrangement) were issued and
have expired, and such Rights were issued with an exercise price that, together
with the purchase price for such Rights, was below fair market value in
relation to the security or other property to be acquired upon the exercise of
such Rights, and such Rights were issued to all holders of outstanding Common
Shares or the General Partner cannot in good faith represent that the issuance
of such Rights benefited the Limited Partners, then the Conversion Factor
applicable upon a Notice of Redemption shall be equitably adjusted in a manner
consistent with antidilution provisions in warrants and other instruments in
the case of such a below market issuance or exercise price.  A similar equitable adjustment to protect the
value of Common Units shall be made in all events if any Rights issued under a “Shareholder
Rights Plan” became exercisable and expired prior to a Specified Redemption
Date.

 

ARTICLE IX

BOOKS, RECORDS, ACCOUNTING AND REPORTS

 

Section 9.01           Records
and Accounting.

 

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 to provide to
the Limited Partners any information, lists and copies of documents required to
be provided pursuant to Section 9.03 hereof.  Any records maintained by or on behalf of the
Partnership in the regular course of its business may be kept on, or be in the
form of, punch cards, magnetic tape, photographs, micrographics or any other
information storage device, provided that the records so maintained are
convertible into clearly legible written form within a reasonable period of
time.  The books of the Partnership shall
be maintained, for financial and tax reporting purposes, on an accrual basis in
accordance with generally accepted accounting principles, or such other basis
as the General Partner determines to be necessary or appropriate and in
compliance with applicable laws, rules and regulations.

 

Section 9.02           Fiscal
Year.

 

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

 

Section 9.03           Reports.

 

A.            As
soon as practicable, but in no event later than one hundred five (105) days
after the close of each Partnership Year, the General Partner shall cause to be
mailed to each Limited Partner as of the close of the Partnership Year, an
annual report containing financial statements of the Partnership, or of the
Company if such statements are prepared solely on a consolidated basis with the
Company, for such Partnership Year, presented in accordance with generally
accepted accounting principles.

 

41

 

B.            As
soon as practicable, but in no event later than one hundred five (105) days
after the close of each calendar quarter (except the last calendar quarter of
each year), the General Partner shall cause to be mailed to each Limited
Partner as of the last day of the calendar quarter, a report containing
unaudited financial statements of the Partnership, or of the Company, if such
statements are prepared solely on a consolidated basis with the Company, and
such other information as may be required by applicable law or regulation, or
as the General Partner determines to be appropriate.

 

ARTICLE X

TAX MATTERS

 

Section 10.01         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.

 

Section 10.02         Tax
Elections.

 

Except as otherwise provided
herein, the General Partner shall determine whether to make any available
election pursuant to the Code. 
Notwithstanding the above, in making any such tax election the General
Partner shall take into account the tax consequences to the Limited Partners
resulting from any such election.  The
General Partner shall make such tax elections on behalf of the Partnership as
the Limited Partners holding a majority of the Percentage Interests of the
Limited Partners (excluding any Limited Partner Interests held by the Company)
request, provided that the General Partner believes that such election is not
adverse to the interests of the General Partner, including its interest in
preserving its qualification as a REIT under the Code.  The General Partner intends that Section 704(c) allocations
with respect to contributed property shall be made by the election of the “traditional
method” as described in Regulations Section 1.704-3(b).  The General Partner intends that the
Partnership be classified as a partnership for federal income tax purposes and
will not elect to be treated as an association taxable as a corporation under
the Regulations.  The General Partner
shall have the right to seek to revoke any tax election it makes (including,
without limitation, the election under Section 754 of the Code) upon the
General Partner’s determination that such revocation is in the best interests
of the Partners.

 

Section 10.03         Tax
Matters Partner.

 

A.            The
General Partner shall be the “tax matters partner” of the Partnership for
federal income tax purposes.  Pursuant to
Section 6230(e) of the Code, upon receipt of notice from the IRS of
the beginning of an administrative proceeding with respect to the Partnership,
the tax matters partner shall furnish the IRS with the name, address, taxpayer
identification number, and profit interest of each of the Limited Partners and
the Assignees; provided,

 

42

 

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

 

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

 

(1)           to
enter into any settlement with the IRS with respect to any administrative or
judicial proceedings for the adjustment of Partnership items required to be
taken into account by a Partner for income tax purposes (such administrative
proceedings being referred to as a “tax audit” and such judicial proceedings
being referred to as “judicial review”), and in the settlement agreement the
tax matters partner may expressly state that such agreement shall bind all
Partners, except that such settlement agreement shall not bind any Partner (i) who
(within the time prescribed pursuant to the Code and Regulations) files a
statement with the IRS providing that the tax matters partner shall not have
the authority to enter into a settlement agreement on behalf of such Partner;
or (ii) who is a “notice partner” (as defined in Section 6231(a)(8) of
the Code) or a member of a “notice group” (as defined in Section 6223(b)(2) of
the Code);

 

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

 

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

 

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

 

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

 

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

 

43

 

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 7.07 of this
Agreement shall be fully applicable to the tax matters partner in its capacity
as such.

 

C.            The
tax matters partner shall receive no compensation for its services.  All third party costs and expenses incurred
by the tax matters partner in performing its duties as such (including legal
and accounting fees 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.

 

Section 10.04         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 or such other period as required by Section 709 of
the Code.

 

Section 10.05         Withholding.

 

Each Limited Partner hereby authorizes the
Partnership to withhold from, or pay on behalf of or with respect to, such
Limited Partner any amount of federal, state, local, or foreign taxes that the
General Partner determines that the Partnership is required to withhold or pay
with respect to any amount distributable or allocable to such Limited Partner
pursuant to this Agreement, including, without limitation, any taxes required
to be withheld or paid by the Partnership pursuant to Sections 1441, 1442,
1445, or 1446 of the Code.  Any amount
paid on behalf of or with respect to a Limited Partner shall constitute a loan
by the Partnership to such Limited Partner, which loan shall be repaid by such
Limited Partner within fifteen (15) days after notice from the General Partner
that such payment must be made unless (i) the Partnership withholds such
payment from a distribution which would otherwise be made to the Limited
Partner; or (ii) the General Partner determines, in its sole and absolute
discretion, that such payment may be satisfied out of the available funds of
the Partnership which would, but for such payment, be distributed to the Limited
Partner.  Any amounts withheld pursuant
to the foregoing clauses (i) or (ii) shall be treated as having been
distributed to such Limited Partner. 
Each Limited Partner hereby unconditionally and irrevocably grants to
the Partnership a security interest in such Limited Partner’s Partnership
Interest to secure such Limited Partner’s obligation to pay to the Partnership
any amounts required to be paid pursuant to this Section 10.05.  In the event that a Limited Partner fails to
pay any amounts owed to the Partnership pursuant to this Section 10.05
when due, 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

 

44

 

Limited Partner and immediately paid by the defaulting Limited Partner
to the General Partner in repayment of such loan.  Any amounts payable by a Limited Partner
hereunder shall bear interest at the lesser of (A) the base rate on
corporate loans at large United States money center commercial banks, as
published from time to time in The Wall Street Journal, plus four (4) percentage
points, or (B) 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.  Each Limited Partner shall take such actions
as the Partnership or the General Partner shall request in order to perfect or
enforce the security interest created hereunder.

 

ARTICLE XI

TRANSFERS AND WITHDRAWALS

 

Section 11.01         Transfer.

 

A.            The
term “transfer,” when used in this Article 11 with respect to 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 by which 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 operation of law or otherwise.  The term “transfer” when used in this Article 11
does not include any redemption of Partnership Interests by the Partnership
from a Limited Partner or any acquisition of Partnership Units from a Limited
Partner by the Company pursuant to Section 8.06.  No part of the interest of a Limited Partner
shall be subject to the claims of any creditor, any spouse for alimony or
support, or to legal process, and may not be voluntarily or involuntarily
alienated or encumbered except as may be specifically provided for in this
Agreement or consented to by the General Partner.

 

B.            No
Partnership Interest shall be transferred, in whole or in part, except in
accordance with the terms and conditions set forth in this Article 11.  Any transfer or purported transfer of a
Partnership Interest not made in accordance with this Article 11 shall be
null and void.

 

Section 11.02         Transfer
of the Company’s General Partner Interest; Extraordinary Transactions.

 

A.            The
Company may not transfer any of its General Partner Interest or withdraw as
General Partner, or engage in an Extraordinary Transaction, or cause the
Partnership to engage in an Extraordinary Transaction, except, in any such
case, (i) if such Extraordinary Transaction is, or such transfer or
withdrawal is pursuant to an Extraordinary Transaction that is, permitted under
Section 11.02(B) or (ii) if Limited Partners holding at least
85% of the Percentage Interests of the Limited Partners (other than Limited
Partner Interests held by the Company) consent to such transfer or withdrawal
or Extraordinary Transaction, or (iii) if such transfer is to an entity
that is wholly-owned by the Company and is a Qualified REIT Subsidiary under Section 856(i) of
the Code.

 

45

 

B.            The
General Partner is permitted to engage and may cause the Partnership to engage
in the following Extraordinary Transactions without the approval or vote of the
Limited Partners except as provided in Section 11.02(C):

 

(i)            an
Extraordinary Transaction in connection with which all the Limited Partners
(other than Special Limited Partner) either will receive, or will have the
right to elect to receive, for each Common Unit an amount of cash, securities,
or other property (on a pre-tax basis) equal to the product of the Common
Shares Amount (assuming for purposes of such calculation that all shares Common
Units then held by any Limited Partner were to be offered for redemption) and
the greatest amount of cash, securities or other property paid to a holder of
one Common Share in consideration of one Common Share pursuant to the terms of
the Extraordinary Transaction; provided that, if, in connection with the
Extraordinary Transaction, a purchase, tender or exchange offer shall have been
made to and accepted by [eighty-five] percent ([85]%) of the holders of the
outstanding Common Shares, each holder of Common Units shall receive, or shall
have the right to elect to receive, the greatest amount of cash, securities, or
other property which such holder would have received had it exercised its right
to Redemption (as set forth in Section 8.06) and received Common Shares in
exchange for its Common Units immediately prior to the expiration of such
purchase, tender or exchange offer and had thereupon accepted such purchase,
tender or exchange offer and then such Extraordinary Transaction shall have
been consummated; and

 

(ii)           a
merger, or other combination of assets, with another entity if:  (w) immediately after such Extraordinary
Transaction, substantially all of the assets directly or indirectly owned by
the surviving entity, other than Common Units held by the General Partner, are
owned directly or indirectly by the Partnership or another limited partnership
or limited liability company which is the survivor of a merger, consolidation
or combination of assets with the Partnership (in each case, the “Surviving
Partnership”); (x) the Common Unitholders own a percentage interest of the
Surviving Partnership based on the relative fair market value of the net assets
of the Partnership (as determined pursuant to Section 11.02.E) and the
other net assets of the Surviving Partnership (as determined pursuant to Section 11.02.E)
immediately prior to the consummation of such transaction; (y) the rights,
preferences and privileges of the Common Unitholders in the Surviving
Partnership are at least as favorable as those in effect immediately prior to
the consummation of such transaction and as those applicable to any other
limited partners or non-managing members of the Surviving Partnership (who
have, in either case, the rights of a “common”

 

46

 

equity holder); and (z) such rights of the
Common Unitholders include the right to exchange their Common Unit equivalent
interests in the Surviving Partnership for at least one of: (a) the
consideration available to such Common Unitholders pursuant to Section 11.02.B(i) or
(b) if the ultimate controlling person of the Surviving Partnership has
publicly traded common equity securities, such common equity securities, with
an exchange ratio based on the relative fair market value of such securities
(as determined pursuant to Section 11.02.E) and the Common Shares.

 

C.            The
General Partner shall not consummate any Extraordinary Transaction in
connection with which it conducted a vote of its common stockholders (a “Stockholder
Vote”) unless the General Partner also conducts a vote of the Common
Unitholders and the holder of the General Partner Units (the “Partnership Vote”)
in which (i) the General Partner provides the Common Unitholders with
advance notice equal in time to the advance notice given in the case of the
Stockholder Vote, (ii) in connection with such advance notice the General
Partner provides the Common Unitholders with written materials describing the
proposed Extraordinary Transaction as well as the tax effect of the
consummation thereof on the Limited Partners, (iii) in such vote of the
Partners, the General Partner votes all Common Units and General Partner Units
held by it in proportion to the manner in which all outstanding shares of
common stock of the General Partner were voted at the Stockholder Meeting (such
votes to be “For,” “Against,” “Abstain” and “Not Present”), and (iv) the
total votes of the General and Limited Partners in respect of their Common
Units voted “For,” “Against,” “Abstain” and “Not Present” would be sufficient
(measured in percentage terms), if such vote were a vote by the Company of its
stockholders, to approve the Extraordinary Transaction. For purposes of the
Partnership Vote, each holder of a Common Unit and a General Partner Unit shall
be entitled to a number of votes equal to product of the Conversion Factor and
the number of Common and General Partner Units held by such Partner.

 

D.            Without
in any way limiting the exculpation from liability set forth in Section 7.01.D
and 7.08.B, in connection with any transaction permitted by Section 11.02.B
or Section 11.02.C hereof, the General Partner shall use its commercially
reasonable efforts to structure such Extraordinary Transaction to avoid causing
the Limited Partners to recognize gain for federal income tax purposes by
virtue of the occurrence of or their participation in such Extraordinary
Transaction.

 

E.             In
connection with any transaction permitted by Section 11.02.B or 11.02.C,
the relative fair market values shall be reasonably determined by the General
Partner as of the time of such transaction and, to the extent applicable, shall
be no less favorable to the Limited Partners than the relative values reflected
in the terms of such transaction.

 

Section 11.03         Limited
Partners’ Rights to Transfer.

 

A.            Subject
to the provisions of Sections 11.03.C, 11.03.D, 11.03.E, and 11.04, a Limited
Partner (other than the Company) may transfer, with or without the consent of
the General Partner, all or any portion of its Partnership Interest, or any of
such Limited Partner’s economic rights as a Limited Partner.

 

47

 

B.            If
a Limited Partner is subject to Incapacity, the executor, administrator,
trustee, committee, guardian, conservator or receiver of such Limited Partner’s
estate shall have all 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.

 

C.            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 filing of a registration statement under the Securities
Act of 1933 or would otherwise violate any federal or state securities laws or
regulations applicable to the Partnership or the Partnership Units.

 

D.            No
transfer by a Limited Partner of its Partnership Units may be made to any
Person if (i) in the opinion of legal counsel for the Partnership, it
would result in the Partnership being treated as an association taxable as a
corporation; (ii) such transfer is effectuated through an “established
securities market” or a “secondary market (or the substantial equivalent
thereof)” with the meaning of Section 7704 of the Code; (iii) such
transfer would cause the Partnership to become, with respect to any employee benefit
plan subject to Title I of ERISA, a “party-in-interest” (as defined in Section 3(14)
of ERISA) or a “disqualified person” (as defined in Section 4975(c) of
the Code); (iv) such transfer would, in the opinion of legal counsel for
the Partnership, cause any portion of the assets of the Partnership to
constitute assets of any employee benefit plan pursuant to Department of Labor
Regulations Section 2510.02-101; or (v) such transfer would subject
the Partnership to be regulated under the Investment Company Act of 1940, the
Investment Advisors Act of 1940 or the Employee Retirement Income Security Act
of 1974, each as amended.

 

E.             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 Section 1.752-4(b) of
the Regulations) to any lender to the Partnership whose loan constitutes a
Nonrecourse Liability, without the consent of the General Partner, in its sole
and absolute discretion; provided that as a condition to such consent the lender
will be required to enter into an arrangement with the Partnership and the
General Partner to redeem for the Cash Amount any Partnership Units in which a
security interest is held simultaneously with the time at which such lender
would be deemed to be a partner in the Partnership for purposes of allocating
liabilities to such lender under Section 752 of the Code.

 

Section 11.04         Substituted
Limited Partners.

 

A.            No
Limited Partner shall have the right to substitute a transferee as a Limited
Partner in his place. The General Partner shall, however, have the right to
consent to the admission of a transferee of the interest of a Limited Partner
pursuant to this Section 11.04 as a Substituted Limited Partner, which
consent may be given or withheld by the General Partner in its sole and
absolute discretion.  The General Partner’s
failure or refusal to permit a transferee of any such interests to become a
Substituted Limited Partner shall not give rise to any cause of action against
the Partnership or any Partner.

 

48

 

B.            A
transferee who has been admitted as a Substituted Limited Partner in accordance
with this Article 11 shall have all the rights and powers and be subject
to all the restrictions and liabilities of a Limited Partner under this
Agreement.

 

C.            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.

 

Section 11.05         Assignees.

 

If the General Partner, in its sole and
absolute discretion, does not consent to the admission of any permitted
transferee as a Substituted Limited Partner, as described in Section 11.04,
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 Net Income, Net Losses, Recapture Income, and
any other items, gain, loss deduction and credit of the Partnership
attributable to the Partnership Units assigned to such transferee, but except
as otherwise provided in Section 8.06.A hereof shall not be deemed to be a
holder of Partnership Units for any other purpose under this Agreement, and
shall not be entitled to vote such Partnership Units in any matter presented to
the Limited Partners for a vote (such Partnership Units being deemed to have
been voted on such matter in the same proportion as all other Partnership Units
held by Limited Partners are voted).  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.

 

Section 11.06         General
Provisions.

 

A.            No
Limited Partner may withdraw from the Partnership other than as a result of a
permitted transfer of all of such Limited Partner’s Partnership Units in
accordance with this Article 11 or pursuant to redemption of all of its
Partnership Units under Section 8.06.

 

B.            Any
Limited Partner who shall transfer all of its Partnership Units in a transfer
permitted pursuant to this Article 11 shall cease to be a Limited Partner
upon the admission of all Assignees of such Partnership Units as Substitute
Limited Partners.  Similarly, any Limited
Partner who shall transfer all of its Partnership Units pursuant to a
redemption of all of its Partnership Units under Section 8.06 shall cease
to be a Limited Partner.

 

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

 

D.            If
any Partnership Interest is transferred or assigned during any quarterly
segment of the Partnership’s fiscal year in compliance with the provisions of
this Article 11 or redeemed or transferred pursuant to Section 8.06
on any day other than the first day of a Partnership Year, then Net Income, Net
Losses, each item thereof and all other items attributable to such interest for
such Partnership Year shall be divided and allocated between the transferor
Partner and the transferee Partner by taking into account their varying
interests during the Partnership Year in accordance with Section 706(d) of
the Code, using the interim closing of the

 

49

 

books method.  Solely for
purposes of making such allocations, each of such items for the calendar month
in which the transfer or assignment occurs shall be allocated to the transferee
Partner, and none of such items for the calendar month in which a redemption
occurs shall be allocated to the Redeeming Partner; provided, however, that the
General Partner may adopt such other conventions relating to allocations in
connection with transfers, assignments or redemptions as it determines are
necessary or appropriate.  All
distributions of Available Cash attributable to such Partnership Unit with
respect to which the Partnership Record Date is before the date of such
transfer, assignment, or redemption shall be made to the transferor Partner or
the Redeeming Partner, as the case may be, and in the case of a transfer or
assignment other than a redemption, all distributions of Available Cash
thereafter attributable to such Partnership Unit shall be made to the
transferee Partner.

 

ARTICLE XII

ADMISSION OF PARTNERS

 

Section 12.01         Admission
of Successor General Partner.

 

A successor to all of the General Partner
Interest pursuant to Section 11.02 hereof who is proposed to be admitted
as a successor General Partner shall be admitted to the Partnership as the
General Partner, effective upon such transfer. 
Any such transferee shall carry on the business of the Partnership
without dissolution.  In each case, the
admission shall be subject to the successor General Partner executing and
delivering to the Partnership an acceptance of all of the terms and conditions
of this Agreement and such other documents or instruments as may be required to
effect the admission.  In the case of
such admission on any day other than the first day of a Partnership Year, all
items attributable to the General Partner Interest for such Partnership Year
shall be allocated between the transferring General Partner and such successor
as provided in Section 11.06.D hereof.

 

Section 12.02         Admission
of Additional Limited Partners.

 

A.            After
the admission to the Partnership of the initial Limited Partners on the date
hereof, a Person who makes a Capital Contribution to the Partnership in
accordance with this Agreement and any transferee of a Limited Partner Interest
permitted to be transferred pursuant to Sections 11.01 or 11.03 shall be
admitted to the Partnership as an Additional Limited Partner only upon
furnishing to the General Partner (i) evidence of acceptance in form
satisfactory to the General Partner of all of the terms and conditions of this
Agreement, including, without limitation, the power of attorney granted in Section 2.04
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.            Notwithstanding
anything to the contrary in this Section 12.02, 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 or otherwise in accordance with the terms of this
Agreement.  The admission of any Person
as an Additional Limited Partner shall become effective on the date upon which
the name of such

 

50

 

Person is recorded on the books and records of the Partnership,
following the consent of the General Partner to such admission.

 

C.            If
any Additional Limited Partner is admitted to the Partnership on any day other
than the first day of a Partnership Year, then Net Income, Net Losses, each
item thereof and all other items allocable among Partners and Assignees for
such Partnership Year shall be allocated among such Additional Limited Partner
and all other Partners and Assignees by taking into account their varying
interests during the Partnership Year in accordance with Section 706(d) of
the Code, using any convention permitted by law and selected by the General
Partner.  Solely for purposes of making
such allocations, each such item 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; provided,
however, that the General Partner may adopt such other conventions relating to
allocations to Additional Limited Partners as it determines are necessary or
appropriate.  All distributions of
Available Cash with respect to which the Partnership Record Date is before the
date of such admission shall be made solely to Partners and Assignees, other
than the Additional Limited Partner, and all distributions of Available Cash
thereafter shall be made to all of the Partners and Assignees, including such
Additional Limited Partner.

 

Section 12.03         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 of Limited Partnership and may for this purpose
exercise the power of attorney granted pursuant to Section 2.04 hereof.

 

ARTICLE XIII

DISSOLUTION, LIQUIDATION AND TERMINATION

 

Section 13.01         Dissolution.

 

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

 

A.            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 of the remaining Partners agree 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;

 

51

 

B.            an
election to dissolve the Partnership made by the General Partner, in its sole
and absolute discretion;

 

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

 

D.            the
sale of all or substantially all of the assets and properties of the
Partnership; or

 

E.             a
final and non-appealable judgment is entered by a court of competent
jurisdiction ruling that the General Partner is bankrupt or insolvent, or a
final and non-appealable order for relief is entered by a court with
appropriate jurisdiction against the General Partner, in each case under any
federal or state bankruptcy or insolvency laws as now or hereafter in effect,
unless prior to the entry of such order or judgment all of the remaining
Partners agree in writing to continue the business of the Partnership and to
the appointment, effective as of a date prior to the date of such order or
judgment, of a substitute General Partner.

 

Section 13.02         Winding
Up.

 

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

 

(1)           First,
to the payment and discharge of all of the Partnership’s debts and liabilities
to creditors other than the Partners;

 

(2)           Second,
to the payment and discharge of all of the Partnership’s debts and liabilities
to the General Partner;

 

(3)           Third,
to the payment and discharge of all of the Partnership’s debts and liabilities
to the other Partners; and

 

(4)           The
balance, if any, to the General Partner and Limited Partners in accordance with
their positive Capital Account balances, after giving effect to all
contributions, distributions, and allocations for all periods.

 

The General Partner shall not receive any additional compensation for
any services performed pursuant to this Article 13.

 

52

 

B.            Notwithstanding
the provisions of Section 13.02.A hereof which require liquidation of the
assets of the Partnership, but subject to the order of priorities set forth
therein, if prior to or upon dissolution of the Partnership the Liquidator
determines that an immediate sale of part or all of the Partnership’s assets
would be impractical or would cause undue loss to the Partners, the Liquidator
may, in its sole and absolute discretion, defer for a reasonable time the
liquidation of any assets except those necessary to satisfy liabilities of the
Partnership (including to those Partners as creditors) and/or distribute to the
Partners, in lieu of cash, as tenants in common and in accordance with the
provisions of Section 13.02.A hereof, undivided interests in such
Partnership assets as the Liquidator deems not suitable for liquidation.  Any such distributions in kind shall be made
only if, in the good faith judgment of the Liquidator, such distributions in
kind are in the best interest of the Partners, and shall be subject to such
conditions relating to the disposition and management of such properties as the
Liquidator deems reasonable and equitable and to any agreements governing the
operation of such properties at such time. 
The Liquidator shall determine the fair market value of any property
distributed in kind using such reasonable method of valuation as it may adopt.

 

C.            In
the discretion of the Liquidator, a pro rata portion of the distributions that
would otherwise be made to the General Partner and Limited Partners pursuant to
this Article 13 may be:

 

(1)           distributed
to a trust established for the benefit of the General Partner and Limited
Partners for the purposes of liquidating Partnership assets, collecting amounts
owed to the Partnership, and paying any contingent or unforeseen liabilities or
obligations of the Partnership or 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

 

(2)           withheld
or escrowed to provide a reasonable reserve for Partnership liabilities
(contingent or otherwise) and to reflect the unrealized portion of any
installment obligations owed to the Partnership, 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 13.02.A
as soon as practicable.

 

Section 13.03         Compliance
with Timing Requirements of Regulations.

 

A.            In
the event the Partnership is “liquidated” within the meaning of Regulations Section 1.704-1(b)(2)(ii)(g),
distributions shall be made pursuant to this Article 13 to the General
Partner and Limited Partners who have positive Capital Accounts in compliance
with Regulations Section 1.704-1(b)(2)(ii)(b)(2).

 

53

 

If at such time as the Partnership (or the
General Partner’s interest therein) is “liquidated” within the meaning of
Treasury Regulations Section 1.704-1(b)(2)(ii)(g), the General Partner has
a deficit balance in its Capital Account (after giving effect to all
contributions, distributions and allocations for all Partnership Years or
portions thereof, including the year during which such liquidation occurs), the
General Partner shall contribute to the capital of the Partnership the amount
necessary to restore such deficit balance to zero in compliance with Treasury
Regulations Section 1.704-1(b)(2)(ii)(b)(3).  Any such contribution required of the General
Partner hereunder shall be made on or before the later of (i) the end of
the Partnership Year in which the Partnership (or the General Partner’s
interest therein) is liquidated or (ii) the ninetieth (90th) day following
the date of such liquidation.

 

Section 13.04         Deemed
Termination.

 

Notwithstanding any other provision of this Article 13,
in the event the Partnership is considered “liquidated” within the meaning of
Regulations Section 1.704-1(b)(2)(ii)(g), but no Liquidating Event has
occurred, the Partnership’s property shall not be liquidated, the Partnership’s
liabilities shall not be paid or discharged, and the Partnership’s affairs
shall not be wound up.  Instead, for
federal income tax purposes and for purposes of maintaining Capital Accounts
pursuant to Exhibit B hereto, the Partnership shall be deemed to have (i) contributed
the Partnership property in kind to a new partnership (the “New Partnership”),
which shall be deemed to have assumed and taken such property subject to all
Partnership liabilities in exchange for all of the interests in such New
Partnership, and (ii) distributed such interests to the Partners pursuant
to the provisions of this Agreement in liquidation of the Partnership,
subsequent to which the New Partnership shall be referred to as the Partnership
for all purposes of this Agreement.

 

Section 13.05         Rights
of Limited Partners.

 

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

 

Section 13.06         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 13.01, 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.

 

Section 13.07         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 13.02 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

 

54

 

other than the State of Delaware shall be canceled and such other
actions as may be necessary to terminate the Partnership shall be taken.

 

Section 13.08         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 13.02 hereof, in order to
minimize any losses otherwise attendant upon such winding-up, and the
provisions of this Agreement shall remain in effect between the Partners during
the period of liquidation.

 

Section 13.09         Waiver
of Partition.

 

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

 

ARTICLE XIV

AMENDMENT OF PARTNERSHIP AGREEMENT; MEETINGS

 

Section 14.01         Amendments.

 

A.            Amendments
to this Agreement may be proposed by the General Partner or by any Limited
Partners (other than the Company) holding fifteen percent (15%) or more of the
Common Units.  Following such proposal,
the General Partner shall submit any proposed amendment to the Limited
Partners.  The General Partner shall seek
the written vote of the Partners on the proposed amendment or shall call a
meeting to vote thereon and to transact any other business that it may deem
appropriate.  For purposes of obtaining a
written vote, the General Partner may require a response within a reasonable
specified time, but not less than fifteen (15) days, and failure to respond in such
time period shall constitute a vote which is consistent with the General
Partner’s recommendation with respect to the proposal.  Except as provided in Section 14.01.B or
14.01.C, a proposed amendment shall be adopted and be effective as an amendment
hereto if it is approved by the General Partner and it receives the Consent of
Limited Partners holding eighty-five percent (85%) of the outstanding Common
Units held by Limited Partners (excluding Limited Partner Common Units held by
the Company); provided, that, an action shall become effective at such time as
the requisite consents are received even if prior to such specified time.

 

B.            Notwithstanding
Section 14.01.A, the General Partner shall have the power, without the
consent of the Limited Partners, to amend this Agreement as may be required to
facilitate or implement any of the following purposes:

 

(1)           to
add to the obligations of the General Partner or surrender any right or power
granted to the General Partner or any Affiliate of the General Partner for the
benefit of the Limited Partners;

 

(2)           to
reflect the admission, substitution, termination, or withdrawal of Partners in
accordance with this Agreement;

 

55

 

(3)           to
set forth and reflect in the Agreement the designations, rights, powers, duties,
and preferences of the holders of any Additional Partnership Interests issued
pursuant to Section 4.02.A hereof;

 

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

 

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

 

The General Partner shall provide notice to the Limited Partners when
any action under this Section 14.01.B is taken.

 

C.            Notwithstanding
Section 14.01.A and 14.01.B hereof, this Agreement shall not be amended
without the Consent of each Partner adversely affected if such amendment would (i) convert
a Limited Partner’s interest in the Partnership into a General Partner
Interest; (ii) modify the limited liability of a Limited Partner in a
manner adverse to such Limited Partner; (iii) alter rights of the Partner
(other than as a result of the issuance of Partnership Interests) to receive
distributions pursuant to Article 5 or Article 13 or the allocations
specified in Article 6 (except as permitted pursuant to Section 4.02
and Section 14.01.B(3) hereof); (iv) alter or modify the Redemption
Right and Common Shares Amount as set forth in Sections 8.06 and 11.02.B, and
the related definitions, in a manner adverse to such Partner; (v) cause
the termination of the Partnership prior to the time set forth in Sections 2.05
or 13.01; or (vi) amend this Section 14.01.C.   Further, no amendment may alter the
restrictions on the General Partner’s authority set forth in Section 7.03.B
without the Consent specified in that section.

 

Section 14.02         Meetings
of the Partners.

 

A.            Meetings
of the Partners may be called by the General Partner and shall be called upon
the receipt by the General Partner of a written request by Limited Partners
(other than the Company) holding fifteen (15%) or more of the Common
Units.  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.  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 14.01.A hereof.
Except as otherwise expressly provided in this Agreement, the Consent of
holders of eighty-five percent (85%) of the outstanding Common Units held by
Limited Partners (excluding Limited Partnership Common Units held by the
Company) shall control.

 

56

 

B.            Any
action required or permitted to be taken at a meeting of the Partners may be
taken without a meeting if a written consent setting forth the action so taken
is signed by a majority of the Common Units of the Partners (or such other percentage
as is expressly required by this Agreement). 
Such consent may be in one instrument or in several instruments, and
shall have the same force and effect as a vote of a majority of the Common
Units of the Partners (or such other percentage as is expressly required by
this Agreement).  Such consent shall be
filed with the General Partner.  An
action so taken shall be deemed to have been taken at a meeting held on the
effective date so certified.

 

C.            Each
Limited Partner may authorize any Person or Persons to act for him by proxy on
all matters in which a Limited Partner is entitled to participate, including
waiving notice of any meeting, or voting or participating at a meeting.  Every proxy must be signed by the Limited
Partner or his attorney-in-fact.  No
proxy shall be valid after the expiration of twelve (12) months from the date
thereof unless otherwise provided in the proxy. 
Every proxy shall be revocable at the pleasure of the Limited Partner
executing it, such revocation to be effective upon the Partnership’s receipt of
written notice of such revocation from the Limited Partner executing such
proxy.

 

D.            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.  Without limitation,
meetings of Partners may be conducted in the same manner as meetings of the
shareholders of the Company and may be held at the same time, and as part of,
meetings of the shareholders of the Company.

 

ARTICLE XV

GENERAL PROVISIONS

 

Section 15.01         Addresses
and Notice.

 

Any notice, demand, request or report
required or permitted to be given or made to a Partner or Assignee under this
Agreement shall be in writing and shall be deemed given or made when delivered
in person or when sent by first class United States mail or by other means of
written communication to the Partner or Assignee at the address set forth in Exhibit A
or such other address of which the Partner shall notify the General Partner in
writing.

 

Section 15.02         Titles
and Captions.

 

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

 

57

 

Section 15.03         Pronouns
and Plurals.

 

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

 

Section 15.04         Further
Action.

 

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

 

Section 15.05         Binding
Effect.

 

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

 

Section 15.06         Creditors.

 

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

 

Section 15.07         Waiver.

 

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

 

Section 15.08         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
signatories to the original or the same counterpart.  Each party shall become bound by this
Agreement immediately upon affixing its signature hereto.

 

Section 15.09         Applicable
Law.

 

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

 

Section 15.10         Invalidity
of Provisions.

 

If any provision of this Agreement shall to
any extent be held void or unenforceable (as to duration, scope, activity,
subject or otherwise) by a court of competent jurisdiction, such provision
shall be deemed to be modified so as to constitute a provision conforming as
nearly as possible to the original provision while still remaining valid and
enforceable.  In such event, the
remainder of this Agreement (or the application of such

 

58

 

provision to persons or circumstances other than those in respect of
which it is deemed to be void or unenforceable) shall not be affected
thereby.  Each other provision of this
Agreement, unless specifically conditioned upon the voided aspect of such
provision, shall remain valid and enforceable to the fullest extent permitted
by law; any other provisions of this Agreement that are specifically
conditioned on the voided aspect of such invalid provision shall also be deemed
to be modified so as to constitute a provision conforming as nearly as possible
to the original provision while still remaining valid and enforceable to the
fullest extent permitted by law.

 

Section 15.11         Entire
Agreement.

 

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

 

59

 

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

 

	
   

  	
  GENERAL PARTNER:

  
	
   

  	
   

  
	
   

  	
  LNR CAPITAL CORPORATION

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  	
   

  
	
   

  	
  LIMITED PARTNERS:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  SPECIAL UNIT HOLDER:

  
	
   

  	
   

  
	
   

  	
  LNR CAPITAL MANAGEMENT LLC

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  

 

60

 

FORM OF LIMITED PARTNER
SIGNATURE PAGE

FOR PARTNERS ADMITTED AFTER [         ],
200[ ]

 

The undersigned, desiring to become one of
the within named Limited Partners of LNR Capital Limited Partnership, hereby
becomes a party to the Agreement of Limited Partnership of LNR Capital Limited
Partnership by and among LNR Capital Corporation and such Limited Partners,
dated as of [            ], 200[ ].  The undersigned agrees that this signature page may
be attached to any counterpart of said Agreement of Limited Partnership.

 

	
  Signature
  Line for Limited Partner:

  
	
   

  
	
   

  	
  [Name]

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  	
  Date:

  
	
   

  	
   

  	
   

  
	
  Address of
  Limited Partner:

  
	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  

 

 

EXHIBIT A

 

PARTNERS
AND PARTNERSHIP INTERESTS

 

	
  Name and Address of

  Partner

  	
   

  	
  General

  Partner

  Units

  	
   

  	
  Common

  Units

  	
   

  	
  Special

  Units

  	
   

  	
  Agreed

  Value of 

  Contributed

  Property

  	
   

  	
  Agreed

  Initial

  Capital

  Account

  	
   

  	
  Percentage

  Interest

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  GENERAL PARTNER

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  LNR Capital Corporation

  1601 Washington Avenue,

  Miami Beach, FL 33139

  	
   

  	
  [     ]

  	
   

  	
  [     ]

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  [     ]

  	
   

  	
  [     ]

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  SPECIAL LIMITED PARTNER

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  LNR Capital Management LLC

  1601 Washington Avenue,

  Miami Beach, FL 33139

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  [     ]

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  LIMITED PARTNERS

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  

  ,

  	
   

  	
   

  	
   

  	
  [     ]

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  [     ]

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  

  

  	
   

  	
  

  

  	
   

  	
  [     ]

  	
   

  	
  

  

  	
   

  	
  

  

  	
   

  	
   

  	
   

  	
  [     ]

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  TOTAL

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  Dated as of [         ], 200[ ]

  	
   

  	
   

  	
   

  

 

A-1

 

EXHIBIT B

 

CAPITAL
ACCOUNT MAINTENANCE

 

1.             Capital Accounts of the Partners

 

A.            The
Partnership shall maintain for each Partner a separate Capital Account in
accordance with the rules of Regulations Section 1.704-l(b)(2)(iv).  Such Capital Account shall be increased by (i) the
amount of all Capital Contributions and any other deemed contributions made by
such Partner to the Partnership pursuant to this Agreement and (ii) all
items of Partnership income and gain (including income and gain exempt from
tax) computed in accordance with Section 1.B hereof and allocated to such
Partner pursuant to Section 6.01 of the Agreement and Exhibit C
hereof, and decreased by (x) the amount of cash or Agreed Value of all actual
and deemed distributions of cash or property made to such Partner pursuant to
this Agreement and (y) all items of Partnership deduction and loss computed in
accordance with Section 1.B hereof and allocated to such Partner pursuant
to Section 6.01 of the Agreement and Exhibit C hereof.

 

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

 

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

 

(2)           The
computation of all items of income, gain, and deduction shall be made without
regard to the fact that items described in Sections 705(a)(1)(B) or
705(a)(2)(B) of the Code are not includable in gross income or are neither
currently deductible nor capitalized for federal income tax purposes.

 

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

 

B-1

 

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

 

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

 

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

 

C.            Generally,
a transferee (including any Assignee) of a Partnership Unit shall succeed to a
pro rata portion of the Capital Account of the transferor, including where the
transfer causes a termination of the Partnership under Section 708(b)(1)(B) of
the Code, in which case the Capital Account of the transferee and the Capital
Accounts of the other holders of Partnership Units in the terminated
Partnership shall carry over to the new Partnership that is formed, for federal
income tax purposes, as a result of the termination. In such event, the
Carrying Values of the Partnership properties in the reconstituted Partnership
shall remain the same as they were in the terminated Partnership and the
Capital Accounts of such reconstituted Partnership shall be maintained in
accordance with the principles of this Exhibit B.

 

D.            (1) 
Consistent with the provisions of Regulations Section 1.704-1(b)(2)(iv)(f),
and as provided in Section 1.D(2), the Carrying Values of all Partnership
assets shall be adjusted upward or downward to reflect any Unrealized Gain or
Unrealized Loss attributable to such Partnership property, as of the times of
the adjustments provided in Section 1.D(2) hereof, as if such
Unrealized Gain or Unrealized Loss had been recognized on an actual sale of
each such property and allocated pursuant to Section 6.01 of the
Agreement.

 

(2)           Such
adjustments shall be made as of the following times:  (a) immediately prior to the acquisition
of an additional interest in the Partnership by any new or existing Partner in
exchange for more than a de minimis Capital Contribution; (b) immediately
prior to the distribution by the Partnership to a Partner of more than a de
minimis amount of property as consideration for an interest in the Partnership;
and (c) immediately prior to the liquidation of the Partnership within the
meaning of Regulations Section 1.704-l(b)(2)(ii)(g) (except for a
liquidation resulting from the termination of the Partnership under Section 708(b)(1)(B) of
the Code), provided however that adjustments pursuant to clauses (a) and (b) above
shall be made only if the General Partner determines that such adjustments are
necessary or appropriate to reflect the relative economic interests of the
Partners in the Partnership.

 

(3)           In
accordance with Regulations Section 1.704- l(b)(2)(iv)(e), the Carrying
Value of Partnership assets distributed in kind (other than in connection with
the termination of the Partnership under Section 708(b)(1)(B) of the
Code) shall be adjusted upward or downward to reflect any Unrealized Gain or
Unrealized Loss attributable to such Partnership property, as of the time any
such asset is distributed.

 

B-2

 

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

 

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

 

2.             No Interest

 

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

 

B-3

 

EXHIBIT C

 

SPECIAL
ALLOCATION RULES

 

2.             Special Allocation Rules.

 

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

 

A.            Minimum Gain Chargeback.  Notwithstanding the provisions of Section 6.01
of the Agreement or any other provisions of this Exhibit C, if there is a
net decrease in Partnership Minimum Gain during any Partnership Year, each
Partner shall be specially allocated items of Partnership income and gain for
such year (and, if necessary, subsequent years) in an amount equal to such
Partner’s share of the net decrease in Partnership Minimum Gain, as determined
under Regulations Section 1.704-2(g). Allocations pursuant to the previous
sentence shall be made in proportion to the respective amounts required to be
allocated to each Partner pursuant thereto. 
The items to be so allocated shall be determined in accordance with
Regulations Section 1.704-2(f)(6). This Section 1.A is intended to
comply with the minimum gain chargeback requirements in Regulations Section 1.704-2(f) and,
for purposes of this Section 1.A only, each Partner’s Adjusted Capital
Account Deficit shall be determined prior to any other allocations pursuant to Section 6.01
of this Agreement with respect to such Partnership Year and without regard to
any decrease in Partner Minimum Gain during such Partnership Year.

 

B.            Partner Minimum Gain Chargeback.  Notwithstanding any other provision of Section 6.01
of this Agreement or any other provisions of this Exhibit C (except Section 1.A
hereof), if there is a net decrease in Partner Minimum Gain attributable to a
Partner Nonrecourse Debt during any Partnership Year, each Partner who has a
share of the Partner Minimum Gain attributable to such Partner Nonrecourse
Debt, determined in accordance with Regulations Section 1.704-2(i) (5),
shall be specially allocated items of Partnership income and gain for such year
(and, if necessary, subsequent years) in an amount equal to such Partner’s
share of the net decrease in Partner Minimum Gain attributable to such Partner
Nonrecourse Debt, determined in accordance with Regulations Section1.704-2(i) (5).
Allocations pursuant to the previous sentence shall be made in proportion to
the respective amounts required to be allocated to each Partner pursuant
thereto. The items to be so allocated shall be determined in accordance with
Regulations Section 1.704-2(i) (4). This Section 1.B is intended
to comply with the minimum gain chargeback requirement in such Section of
the Regulations and shall be interpreted consistently therewith. Solely for
purposes of this Section 1.B, each Partner’s Adjusted Capital Account
Deficit shall be determined prior to any other allocations pursuant to Section 6.01
of the Agreement or this Exhibit with respect to such Partnership Year, other
than allocations pursuant to Section 1.A hereof.

 

C-1

 

C.            Qualified Income Offset.  In the event any Partner unexpectedly
receives any adjustments, allocations or distributions described in Regulations
Sections 1.704-l(b)(2)(ii)(d)(4), 1.704-l(b)(2)(ii)(d)(5),
or1.704-l(b)(2)(ii)(d)(6), and after giving effect to the allocations required
under Sections 1.A and 1.B hereof with respect to such Partnership Year, such
Partner has an Adjusted Capital Account Deficit, items of Partnership income
and gain (consisting of a pro rata portion of each item of Partnership income,
including gross income and gain for the Partnership Year) shall be specially
allocated to such Partner in an amount and manner sufficient to eliminate, to
the extent required by the Regulations, its Adjusted Capital Account Deficit
created by such adjustments, allocations or distributions as quickly as
possible. This Section 1.C is intended to constitute a “qualified income
offset” under Regulations Section 1.704-l(b)(2)(ii)(d) and shall be
interpreted consistently therewith.

 

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

 

E.             Nonrecourse Deductions.  Nonrecourse Deductions for any Partnership
Year shall be allocated to the holders of Common Units in accordance with their
respective Percentage Interests. If the General Partner determines in its good
faith discretion that the Partnership’s Nonrecourse Deductions must be
allocated in a different ratio to satisfy the safe harbor requirements of the
Regulations promulgated under Section 704(b) of the Code, the General
Partner is authorized, upon notice to the Limited Partners, to revise the
prescribed ratio for such Partnership Year to the numerically closest ratio
which would satisfy such requirements.

 

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

 

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

 

C-2

 

3.             Allocations for Tax Purposes

 

A.            Except
as otherwise provided in this Section 2, for federal income tax purposes,
each item of income, gain, loss and deduction shall be allocated among the
Partners in the same manner as its correlative item of “book” income, gain,
loss or deduction is allocated pursuant to Section 6.01 of the Agreement
and Section 1 of this Exhibit C.

 

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

 

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

 

(ii)           any
item of Residual Gain or Residual Loss attributable to a Contributed Property
shall be allocated among the Partners in the same manner as its correlative
item of “book” gain or loss is allocated pursuant to Section 6.01 of the
Agreement and Section 1 of this Exhibit C.

 

(b)           (i)            In
the case of an Adjusted Property, such items shall

 

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

 

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

 

(ii)           any
item of Residual Gain or Residual Loss attributable to an Adjusted Property
shall be allocated among the Partners in the same manner its correlative item
of “book” gain or loss is allocated pursuant to Section 6.01 of the
Agreement and Section 1 of this Exhibit C.

 

C.            To
the extent Regulations promulgated pursuant to Section 704(c) of the
Code permit a Partnership to utilize alternative methods to eliminate the
disparities between the Carrying Value of property and its adjusted basis, the “traditional
method” set forth in Regulations Section 1.704-3(b) shall be used by
the Partnership and such method shall be binding on all Partners.

 

C-3

 

EXHIBIT D

 

NOTICE
OF REDEMPTION

 

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

 

Dated: Name of Limited Partner:

 

(Signature of Limited Partner)

 

(Street Address)

 

If Shares are to be issued, issue to:

 

Name:

 

Please insert social security or identifying number:

 

D-1Exhibit 10.3

 

FORM OF
SERVICES AGREEMENT, dated as of [            ],
200[ ] (the “Agreement”), by and among LNR Management LLC, a Delaware
limited liability company (the “Manager”), LNR Capital Corporation, a
Maryland corporation (the “Company”), and LNR Property Holdings Ltd., a
Bermuda exempted company (“LNR”).

 

W I T N E S S E T H:

 

WHEREAS, the
Manager has entered into a management agreement (as such agreement may be
amended from time to time, the “Management Agreement”), dated as of [       ],
200[  ], between the Company and the Manager; and

 

WHEREAS, LNR
desires to provide such services, including personnel, services and resources,
to the Manager to enable the Manager to perform its duties under the Management
Agreement.

 

NOW THEREFORE,
in consideration of the foregoing premises, and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged,
and intending to be legally bound hereby, the parties hereto hereby agree as
follows:

 

1.                                       Agreement
to Provide Services.  LNR agrees to
provide or cause to be provided to the Manager, and for the benefit of the
Manager and the Company, such personnel, services and resources to enable the
Manager to carry out its obligations and responsibilities under Section 2
of the Management Agreement as if it were a party thereto.

 

2.                                       Term.  Except as provided in Section 3, this
Agreement will terminate upon the termination of the Management Agreement.

 

3.                                       Assignments.  Except (i) as provided under the
Management Agreement or (ii) to a party that (a) acquires all or a
substantial portion of the personnel and resources of LNR necessary to perform
the duties of LNR under this Agreement and (b) assumes the duties of LNR
under this Agreement whereupon this Agreement shall automatically terminate
upon any such assignment, this Agreement may not be assigned by any party
hereto, in whole or in part, unless such assignment is consented to in writing
by the other parties.

 

4.                                       Fees
and Expenses.  Nothing in this
Agreement shall be deemed (i) to affect any expense reimbursement or fee
obligations owed by the Company to the Manager under the Management Agreement
or (ii) to preclude or affect any expense reimbursement or fee arrangement
between the Manager and LNR.

 

5.                                       Right
of First Offer.  For the benefit of
the Company and the Manager, LNR agrees to be bound by all of the provisions of
Section 3(a) of the Management Agreement as if it were a party
thereto.

 

6.                                       Governing
Law.  This Agreement and the rights
and obligations of the parties under this Agreement shall be governed by, and
construed and interpreted in accordance with, the law of the State of New York.

 

 

7.                                       Counterparts.  This Agreement may be executed by the parties
to this Agreement on any number of separate counterparts (including by telecopy),
and all of said counterparts taken together shall be deemed to constitute one
and the same instrument.

 

8.                                       Severability.  Any provision of this Agreement which is
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.

 

9.                                       Binding
Nature of Agreement; Successors and Assigns.  This Agreement shall be binding upon and
inure to the benefit of the parties hereto and their respective heirs, personal
representatives, successors and permitted assigns as provided in this
Agreement.

 

10.                                 Amendments.  This Agreement may not be modified or amended
other than by an agreement in writing signed by the parties hereto.

 

[rest of page intentionally left blank]

 

2

 

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

 

 

	
   

  	
  LNR MANAGEMENT LLC

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
  Title:

  
	
   

  	
   

  
	
   

  	
  LNR PROPERTY HOLDINGS LTD.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
  Title:

  
	
   

  	
   

  
	
   

  	
  LNR CAPITAL CORPORATION

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
  Title:

  
				

 

3

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