Document:

Exhibit 10.3

 

AMENDED AND RESTATED

 

AGREEMENT OF LIMITED PARTNERSHIP

 

OF

 

THE NEWKIRK MASTER LIMITED PARTNERSHIP

 

a Delaware limited partnership

 

dated as of November 7, 2005

 

 

TABLE OF CONTENTS

 

	
  ARTICLE I
  DEFINED TERMS

  	
   

  
	
  ARTICLE II
  ORGANIZATIONAL MATTERS

  	
   

  
	
  Section 2.1

  	
  Organization

  	
   

  
	
  Section 2.2

  	
  Name

  	
   

  
	
  Section 2.3

  	
  Registered Office and Agent; Principal Office

  	
   

  
	
  Section 2.4

  	
  Power of Attorney

  	
   

  
	
  Section 2.5

  	
  Term

  	
   

  
	
  ARTICLE III
  PURPOSE

  	
   

  
	
  Section 3.1

  	
  Purpose and Business

  	
   

  
	
  Section 3.2

  	
  Powers

  	
   

  
	
  Section 3.3

  	
  Partnership Only for Partnership Purposes

  	
   

  
	
  Section 3.4

  	
  Representations and Warranties by the Parties

  	
   

  
	
  ARTICLE IV
  CAPITAL CONTRIBUTIONS AND ISSUANCES OF PARTNERSHIP INTERESTS

  	
   

  
	
  Section 4.1

  	
  Capital Contributions of the Partners

  	
   

  
	
  Section 4.2

  	
  Issuances of Additional Partnership Interests

  	
   

  
	
  Section 4.3

  	
  Additional Funds and Capital Contributions

  	
   

  
	
  Section 4.4

  	
  Stock Option Plan

  	
   

  
	
  Section 4.5

  	
  No Interest; No Return

  	
   

  
	
  Section 4.6

  	
  Conversion or Redemption of Preferred Shares

  	
   

  
	
  Section 4.7

  	
  Conversion or Redemption of Junior Shares

  	
   

  
	
  Section 4.8

  	
  Other Contribution Provisions

  	
   

  
	
  Section 4.9

  	
  Not Publicly Traded

  	
   

  
	
  Section 4.10

  	
  Restricted Units

  	
   

  
	
  ARTICLE V
  DISTRIBUTIONS

  	
   

  
	
  Section 5.1

  	
  Requirement and Characterization of Distributions

  	
   

  
	
  Section 5.2

  	
  Distributions in Kind

  	
   

  
	
  Section 5.3

  	
  Amounts Withheld

  	
   

  
	
  Section 5.4

  	
  Distributions Upon Liquidation

  	
   

  
	
  Section 5.5

  	
  Distributions to Reflect Issuance of Additional Partnership Units

  	
   

  
	
  Section 5.6

  	
  Restricted Distributions

  	
   

  
	
  ARTICLE VI
  ALLOCATIONS

  	
   

  
	
  Section 6.1

  	
  Timing and Amount of Allocations of Net Income and Net Loss

  	
   

  
	
  Section 6.2

  	
  General Allocations

  	
   

  
	
  Section 6.3

  	
  Additional Allocation Provisions

  	
   

  
	
  Section 6.4

  	
  Tax Allocations

  	
   

  
	
  ARTICLE VII
  MANAGEMENT AND OPERATIONS OF BUSINESS

  	
   

  
	
  Section 7.1

  	
  Management

  	
   

  
	
  Section 7.2

  	
  Certificate of Limited Partnership

  	
   

  
	
  Section 7.3

  	
  Reimbursement of the General Partner

  	
   

  
	
  Section 7.4

  	
  Outside Activities of the General Partner

  	
   

  
	
  Section 7.5

  	
  Contracts with Affiliates

  	
   

  
	
  Section 7.6

  	
  Indemnification

  	
   

  
	
  Section 7.7

  	
  Liability of the General Partner

  	
   

  
	
  Section 7.8

  	
  Other Matters Concerning the General Partner

  	
   

  
	
  Section 7.9

  	
  Title to Partnership Assets

  	
   

  
	
  Section 7.10

  	
  Reliance by Third Parties

  	
   

  
	
  ARTICLE VIII
  RIGHTS AND OBLIGATIONS OF LIMITED PARTNERS

  	
   

  
	
  Section 8.1

  	
  Limitation of Liability

  	
   

  
	
  Section 8.2

  	
  Management of Business

  	
   

  
	
  Section 8.3

  	
  Outside Activities of Limited Partners

  	
   

  
	
  Section 8.4

  	
  Return of Capital

  	
   

  
	
  Section 8.5

  	
  Redemption Factor

  	
   

  
	
  Section 8.6

  	
  Redemption Rights of Qualifying Parties

  	
   

  
	
  Section 8.7

  	
  Partnership Right to Call Limited Partner Interests

  	
   

  
	
  Section 8.8

  	
  Mergers

  	
   

  
	
  ARTICLE IX
  BOOKS, RECORDS, ACCOUNTING AND REPORTS

  	
   

  
	
  Section 9.1

  	
  Records and Accounting

  	
   

  
	
  Section 9.2

  	
  Partnership Year

  	
   

  
	
  Section 9.3

  	
  Reports

  	
   

  

 

i

 

	
  ARTICLE X
  TAX MATTERS

  	
   

  
	
  Section 10.1

  	
  Preparation of Tax Returns

  	
   

  
	
  Section 10.2

  	
  Tax Elections

  	
   

  
	
  Section 10.3

  	
  Tax Matters Partner

  	
   

  
	
  Section 10.4

  	
  Withholding

  	
   

  
	
  Section 10.5

  	
  Organizational Expenses

  	
   

  
	
  ARTICLE XI
  TRANSFERS AND WITHDRAWALS

  	
   

  
	
  Section 11.1

  	
  Transfer

  	
   

  
	
  Section 11.2

  	
  Transfer of General Partner’s Partnership Interest

  	
   

  
	
  Section 11.3

  	
  Transfer of Limited Partners’ Partnership Interests

  	
   

  
	
  Section 11.4

  	
  Substituted Limited Partners

  	
   

  
	
  Section 11.5

  	
  Assignees

  	
   

  
	
  Section 11.6

  	
  General Provisions

  	
   

  
	
  ARTICLE XII
  ADMISSION OF PARTNERS

  	
   

  
	
  Section 12.1

  	
  Admission of Successor General Partner

  	
   

  
	
  Section 12.2

  	
  Admission of Additional Limited Partners

  	
   

  
	
  Section 12.3

  	
  Amendment of Agreement and Certificate of Limited Partnership

  	
   

  
	
  Section 12.4

  	
  Limit on Number of Partners

  	
   

  
	
  ARTICLE XIII
  DISSOLUTION, LIQUIDATION AND TERMINATION

  	
   

  
	
  Section 13.1

  	
  Dissolution

  	
   

  
	
  Section 13.2

  	
  Winding
  Up

  	
   

  
	
  Section 13.3

  	
  Deemed Distribution and Recontribution

  	
   

  
	
  Section 13.4

  	
  Rights of Limited Partners

  	
   

  
	
  Section 13.5

  	
  Notice of Dissolution

  	
   

  
	
  Section 13.6

  	
  Cancellation of Certificate of Limited Partnership

  	
   

  
	
  Section 13.7

  	
  Reasonable Time for Winding-Up

  	
   

  
	
  ARTICLE XIV
  PROCEDURES FOR ACTIONS AND CONSENTS OF PARTNERS; AMENDMENTS; MEETINGS

  	
   

  
	
  Section 14.1

  	
  Procedures for Actions and Consents of Partners

  	
   

  
	
  Section 14.2

  	
  Amendments

  	
   

  
	
  Section 14.3

  	
  Meetings of the Partners

  	
   

  
	
  ARTICLE XV
  GENERAL PROVISIONS

  	
   

  
	
  Section 15.1

  	
  Addresses and Notice

  	
   

  
	
  Section 15.2

  	
  Titles and Captions

  	
   

  
	
  Section 15.3

  	
  Pronouns and Plurals

  	
   

  
	
  Section 15.4

  	
  Further Action

  	
   

  
	
  Section 15.5

  	
  Binding Effect

  	
   

  
	
  Section 15.6

  	
  Waiver

  	
   

  
	
  Section 15.7

  	
  Counterparts

  	
   

  
	
  Section 15.8

  	
  Applicable Law

  	
   

  
	
  Section 15.9

  	
  Entire Agreement

  	
   

  
	
  Section 15.10

  	
  Invalidity of Provisions

  	
   

  
	
  Section 15.11

  	
  Limitation to Preserve REIT Status

  	
   

  
	
  Section 15.12

  	
  No Partition

  	
   

  
	
  Section 15.13

  	
  No Third-Party Rights Created Hereby

  	
   

  
	
  Section 15.14

  	
  No Rights as Stockholders

  	
   

  
	
  Exhibit A

  	
  Notice of
  Redemption

  	
   

  
	
  Exhibit B

  	
  Form of
  Unit Certificate

  	
   

  

 

ii

 

AMENDED AND RESTATED AGREEMENT

OF

LIMITED PARTNERSHIP

OF

THE NEWKIRK MASTER LIMITED PARTNERSHIP

 

THIS AMENDED AND RESTATED AGREEMENT OF LIMITED PARTNERSHIP OF The
Newkirk Master Limited Partnership, made effective as of , 2005, is entered
into by and among MLP GP LLC, a Delaware limited partnership (the “Withdrawing
General Partner”), Newkirk Realty Trust, Inc., a Maryland corporation
(defined herein as the “General Partner”), as the general partner of and a
limited partner in the Partnership, and the General Partner, on behalf of and
as attorney in fact for each of the persons and entities currently reflected on
the books and records of the Partnership as a Limited Partner in the
Partnership, together with any other Persons who become Partners in the
Partnership as provided herein.

 

WHEREAS, the Partnership was formed under the name “The Newkirk Master
Limited Partnership” on October 11, 2001, and, on October 23, 2001,
the Partnership adopted an Agreement of Limited Partnership (the “Prior
Agreement”);

 

WHEREAS, as of the time that shares of the General Partner are
initially sold pursuant to its initial public offering of Common Shares (the “Effective
Time”), (i) the General Partner is making a capital contribution to the
Partnership in exchange for a general partner’s interest and limited partner’s
interest and (ii) the General Partner is being appointed as the successor
general partner to MLP GP LLC, pursuant to Section 12.2 of the Prior
Agreement;

 

WHEREAS, the Withdrawing General Partner and the General Partner have
determined that it is in the best interest of the Partnership and its partners
to amend and, in connection therewith, to restate the Prior Agreement to
reflect, among things, the withdrawal of the Withdrawing General Partner as a
general partner of the Partnership, and the admission of the General Partner as
the general partner of the Partnership.

 

WHEREAS, in accordance with the terms of the Prior Agreement, the Prior
General Partner and a majority in interest of the Limited Partners have
consented to the amendment and restatement of the Prior Agreement as provided
for herein, effective as of the Effective Time;

 

NOW, THEREFORE, in consideration of the mutual covenants set forth
herein, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, General Partner hereby amends and
restates the Prior Agreement in its entirety 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 (6 Del. C. § 17-101 et seq.), as
it may be amended from time to time, and any successor to such statute.

 

“Actions” has the meaning
set forth in Section 7.6 hereof.

 

“Additional Funds” has
the meaning set forth in Section 4.3.A hereof.

 

“Additional Limited Partner”
means a Person who is admitted to the Partnership as a Limited Partner pursuant
to Section 4.2 and Section 12.2 hereof and who is shown as such on
the books and records of the Partnership.

 

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

 

(i)  decrease such deficit by any amounts that such Partner is
obligated to restore pursuant to this Agreement or by operation of law upon
liquidation of such Partner’s Partnership Interest or is deemed to be obligated
to restore pursuant to the penultimate sentence of each of Regulations Sections
1.704-2(g) (1) and 1.704-2 (i)(5); and

 

(ii)  increase such deficit by the items described in Regulations Section 1.704-1(b)(2) (ii)(d)(4),
(5) and (6).

 

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

 

“Advisor” means NKT
Advisors LLC, a Delaware limited liability company, or any
successor-in-interest thereto or assignee of NKT Advisors LLC’s interest in and
obligations under the Advisory Agreement.

 

“Advisor Voting Direction Exclusions”
means the following two permissible exclusions to the Voting Direction
Provision: (1) Vornado Realty Trust will not be granted LP Direction Votes
with respect to the election of members of the General Partner’s board of
directors at any time when any affiliate of Vornado Realty Trust is serving or
standing for election as a member of the General Partner’s board of directors
and (2) at all other times, Vornado Realty Trust’s right to LP Direction
Votes with respect to the election of the General Partner’s board of directors
will be limited to the number of Partnership Common Units that Vornado Realty
Trust then owns, not to exceed an amount of Partnership Common Units equal to
9.9% of the Common Shares, on a fully diluted basis that assumes the
acquisition by the General Partner of all Partnership Common Units that are
subject to the Redemption right set forth in Section 8.6A in exchange for
REIT Consideration (whether or not such Redemption right is then exercisable).

 

1

 

“Advisory Agreement”
means that certain Advisory Agreement that the Partnership currently
anticipates entering into with the Advisor and the General Partner, as the same
may be amended or supplemented from time to time.

 

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

 

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

 

“Applicable Percentage”
has the meaning set forth in Section 8.6.B hereof.

 

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

 

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

 

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

 

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

 

“Capital Account” means,
with respect to any Partner, the Capital Account maintained by the General
Partner for such Partner on the Partnership’s books and records in accordance
with the following provisions:

 

A.                                   Capital
Accounts shall be maintained in compliance with Regulations Sections 1.704-1(b) and
1.704-2.

 

B.                                     The
General Partner 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 that
unanticipated events might otherwise cause this Agreement not to comply with
Regulations Section 1.704-1(b) or Section 1.704-2.

 

C.                                     Immediately
prior to the General Partner’s Capital Contribution, the Capital Accounts of
the existing Partners were adjusted to reflect their allocable share (under the
Prior Agreement) of the Net Income created by adjusting the Gross Asset Values
of the Partnership’s properties to equal their respective fair market values.

 

“Capital Account Deficit”
has the meaning set forth in Section 13.2.C hereof.

 

“Capital Contribution”
means, with respect to any Partner, the amount of money and the initial Gross
Asset Value of any Contributed Property that such Partner contributes to the
Partnership pursuant to Section 4.1, 4.2 or 4.3 hereof or is deemed to
contribute pursuant to Section 4.4 hereof.

 

“Cash Amount” means, with
respect to a Tendering Party, an amount of cash equal to the product of (a) the
Value of a Common Share and (b) such Tendering Party’s Common Shares
Amount determined as of the date of receipt by the General Partner of such
Tendering Party’s Notice of Redemption or, if such date is not a Business Day,
the immediately preceding Business Day.

 

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

 

“Closing Price” has the
meaning set forth in the definition of “Value.”

 

“Code” means the Internal
Revenue Code of 1986, as amended and in effect from time to time or any
successor statute thereto, 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” means a
share of the General Partner’s Common Stock, par value $.01 per share. Where
relevant in this Agreement, “Common Shares” includes shares of the General
Partner’s Common Stock, par value $.01 per share, issued upon conversion of
Preferred Shares or Junior Shares.

 

“Common Shares Amount”
means a number of Common Shares equal to the product of (a) the number of
Tendered Units and (b) the Redemption Factor in effect on the Specified
Redemption Date with respect to such Tendered Units; provided, however, that,
in the event that the General Partner issues to all holders of Common Shares as
of a certain record date rights, options, warrants or convertible or
exchangeable securities entitling the General Partner’s shareholders to
subscribe for or purchase Common Shares or any other securities or property
(collectively, the “Rights”), with the record date for such Rights issuance
falling within the period starting on the date of the Notice of Redemption and
ending on the day immediately preceding the Specified Redemption Date but which
Rights will not be distributed before the relevant Specified Redemption Date,
then the Common Shares Amount shall also include such Rights that a holder of
that number of Common Shares would be entitled to receive, expressed, where
relevant hereunder, in a number of Common Shares determined by the General
Partner in good faith.

 

“Company Employees” means
the employees of the Partnership, the General Partner and any of their
subsidiaries.

 

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

 

2

 

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

 

“Contributed Property”
means each item of Property or other non-cash asset contributed to the
Partnership.

 

“Cut-Off Date” means the
fifth (5th) Business Day after the General Partner’s receipt of a Notice of Redemption.

 

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

 

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

 

“Distributed Right” has
the meaning set forth in the definition of “Redemption Factor.”

 

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

 

“Exchange Act” means the
Securities Exchange Act of 1934, as amended, and the rules and regulations
promulgated thereunder.

 

“Family Members” means,
as to a Person that is an individual, such Person’s spouse, ancestors,
descendants(whether by blood or by adoption), brothers and sisters and inter
vivos or testamentary trusts of which only such Person and his spouse,
ancestors, descendants(whether by blood or by adoption), brothers and sisters
are beneficiaries.

 

“Funding Debt” means any
Debt incurred by or on behalf of the General Partner for the purpose, in whole
or in part, of providing funds to the Partnership.

 

“General Partner” means
Newkirk Realty Trust Inc., a Maryland corporation, and its successors and
assigns, as the general partner of the Partnership in its capacity as general
partner of the Partnership.

 

“General Partner Interest”
means the Partnership Interest held by the General Partner, which Partnership
Interest is an interest as a general partner under the Act. A General Partner
Interest may be expressed as a number of Partnership Common Units, Partnership
Preferred Units or any other Partnership Units.

 

“General Partner Loan”
has the meaning set forth in Section 4.3.D hereof.

 

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

 

(a)  The initial Gross Asset Value of any asset contributed by a
Partner to the Partnership shall be the gross fair market value of such asset
as determined by the General Partner and agreed to by the contributing Partner.
In any case in which the General Partner and the contributing Partner are
unable to agree as to the gross fair market value of any contributed asset or
assets, such gross fair market value shall be determined by Appraisal.

 

(b)  The Gross Asset Values of all assets held by the Partnership
immediately prior to the General Partner’s Capital Contribution were adjusted
to equal their gross fair market values, as determined by the General Partner
and the Withdrawing General Partner, and shall be adjusted immediately prior to
the occurrence of any event described in clause (i), clause (ii),
clause (iii), clause (iv) or clause (v) hereof to
equal their respective gross fair market values, as determined by the General
Partner using such reasonable method of valuation as it may adopt, as of the
following times:

 

(i)  the acquisition of an interest in the Partnership (other than
in connection with the execution of this Agreement but including, without
limitation, acquisitions pursuant to Section 4.2 hereof or contributions
or deemed contributions by the General Partner pursuant to Section 4.2
hereof) by a new or existing Partner in exchange for more than a de minimis Capital Contribution, if the
General Partner reasonably determines that such adjustment is necessary or
appropriate to reflect the relative economic interests of the Partners in the
Partnership;

 

(ii)  the distribution by the Partnership to a Partner of more
than a de minimis amount as
consideration for an interest in the Partnership, if the General Partner
reasonably determines that such adjustment is necessary or appropriate to
reflect the relative economic interests of the Partners in the Partnership;

 

(iii)  the liquidation of the Partnership within the meaning of
Regulations Section 1.704-1(b)(2)(ii)(g);

 

(iv)  upon the admission of a successor General Partner pursuant
to Section 12.1 hereof; and

 

3

 

(v)  at such other times as the General Partner shall reasonably
determine necessary or advisable in order to comply with Regulations Sections
1.704-1(b) and 1.704-2.

 

(c)  The Gross Asset Value of any Partnership asset distributed to
a Partner shall be the gross fair market value of such asset on the date of
distribution as determined by the General Partner.

 

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

 

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

 

“Holder” means any
Partner, and any Assignee which is treated as a partner in the Partnership for
federal income tax purposes.

 

“Incapacity” or “Incapacitated” means, (i) as to any
Partner who is an individual, death, total physical disability or entry by a
court of competent jurisdiction adjudicating such Partner incompetent to manage
his or her person or his or her estate; (ii) as to any Partner that is a
corporation or limited liability company, the filing of a certificate of
dissolution, or its equivalent, or the revocation of the corporation’s charter;
(iii) as to any Partner that is a partnership, the dissolution and
commencement of winding up of the partnership; (iv) as to any Partner that
is an estate, the distribution by the fiduciary of the estate’s entire interest
in the Partnership; (v) as to any trustee of a trust that is a Partner,
the termination of the trust (but not the substitution of a new trustee); or (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 of or against such Partner under any bankruptcy, insolvency or
other similar law now or hereafter in effect, (b) the Partner is adjudged
as bankrupt or insolvent, or a final and nonappealable order for relief under
any bankruptcy, insolvency or similar law now or hereafter in effect has been
entered against the Partner, (c) the Partner executes and delivers a general
assignment for the benefit of the Partner’s creditors, (d) the Partner
files an answer or other pleading admitting or failing to contest the material
allegations of a petition filed against the Partner in any proceeding of the
nature described in clause (b) above, (e) the Partner seeks,
consents to or acquiesces in the appointment of a trustee, receiver or
liquidator for the Partner or for all or any substantial part of the Partner’s
properties, (f) any proceeding seeking liquidation, reorganization or
other relief under any bankruptcy, insolvency or other similar law now or
hereafter in effect has not been dismissed within 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) above
is not vacated within ninety (90) days after the expiration of any such
stay.

 

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

 

“Independent Director”
shall have the meaning assigned to such term under the rules and
regulations of the principal national securities exchange or interdealer
quotation system on which the Common Shares are then listed.

 

“IRS” means the Internal
Revenue Service.

 

“Junior Share” means a
share of capital stock of the General Partner now or hereafter authorized or
reclassified that has dividend rights, or rights upon liquidation, winding up
and dissolution, that are inferior or junior to the Common Shares.

 

“Limited Partner” means
any Person reflected as a Limited Partner on the books and records of the
Partnership, or any Substituted Limited Partner or Additional Limited Partner,
in such Person’s capacity as a Limited Partner in the Partnership.

 

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

 

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

 

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

 

“Lock-Out Date” means,
unless otherwise agreed by the Partnership and a Limited Partner, one-year from
the date of the Effective Time.

 

4

 

“LP Direction Votes” has
the meaning set forth in Section 7.1A(6).

 

“Majority in Interest of the Limited
Partners” means Limited Partners holding more than fifty percent
(50%) of the outstanding Partnership Common Units held by all Limited Partners.

 

“Market Price” has the
meaning set forth in the definition of “Value.”

 

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

 

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

 

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

 

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

 

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

 

(e)  In lieu of the depreciation, amortization and other cost
recovery deductions that would otherwise be taken into account in computing
such taxable income or loss, there shall be taken into account Depreciation for
the period;

 

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

 

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

 

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

 

“Nonrecourse Liability”
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 A
attached to this Agreement.

 

“Other Securities” means (i) any
rights, options, warrants or convertible or exchangeable securities having the
right to subscribe for or purchase Common Shares or Preferred Shares, excluding
Preferred Shares, Junior Shares and grants under the Stock Option Plans, or (ii) any
Debt issued by the General Partner that provides any of the rights described in
clause (i).

 

“Ownership Limit” means
the applicable restriction or restrictions on ownership of shares of the
General Partner imposed under the Articles of Incorporation.

 

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

 

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

 

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

 

5

 

“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 Year shall be determined in accordance with the rules of
Regulations Section 1.704-2(i)(2).

 

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

 

“Partnership Common Unit”
means a fractional share of the Partnership Interests of all Partners issued
pursuant to Sections 4.1 and 4.2 hereof, but does not include any Partnership
Preferred Unit or any other Partnership Unit specified in a Partnership Unit
Designation or this Agreement as being other than a Partnership Common Unit;
provided, however, that the General Partner Interest and the Limited Partner
Interests shall have the differences in rights and privileges as specified in
this Agreement. The ownership of Partnership Common Units may be (but need not,
in the sole and absolute discretion of the General Partner) evidenced by the
form of certificate for Partnership Common Units attached hereto as Exhibit B.

 

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

 

“Partnership Junior Unit”
means a fractional share of the Partnership Interests that the General Partner
has authorized pursuant to Section 4.1, Section 4.2 or Section 4.3
hereof that has distribution rights, or rights upon liquidation, winding up and
dissolution, that are inferior or junior to the Partnership Common Units.

 

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

 

“Partnership Preferred Unit”
means a fractional share of the Partnership Interests that the General Partner
has authorized pursuant to Section 4.1, Section 4.2 or Section 4.3
hereof that has distribution rights, or rights upon liquidation, winding up and
dissolution, that are superior or prior to the Partnership Common Units.

 

“Partnership Record Date”
means a record date established by the General Partner for a distribution
pursuant to Section 5.1 hereof, which record date shall generally be the
same as the record date established by the General Partner for a distribution
to its shareholders of some or all of its share of such distribution.

 

“Partnership Unit” shall
mean a Partnership Common Unit, a Partnership Preferred Unit, a Partnership
Junior Unit or any other fractional share of the Partnership Interests that the
General Partner has authorized pursuant to Section 4.1, Section 4.2
or Section 4.3 hereof.

 

“Partnership Unit Designation”
shall have the meaning set forth in Section 4.2 hereof.

 

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

 

“Percentage Interest”
means, as to each Partner, its interest, if any, in the Partnership Common
Units as determined by dividing the Partnership Common Units owned by such
Partner by the total number of Partnership Common Units then outstanding. To
the extent that the Partnership issues more than one class or series of
Partnership Interests, the interest of such class or series shall be determined
as set forth in this Agreement or any amendment hereto.

 

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

 

“Preferred Share” means a
share of capital stock of the General Partner now or hereafter authorized or
reclassified that has dividend rights, or rights upon liquidation, winding up
and dissolution, that are superior or prior to the Common Shares.

 

“Property” or “Properties” means any assets and property
of the Partnership such as, but not limited to, interests in real property and
personal property, including, without limitation, fee interests, interests in
ground leases, interests in limited liability companies, joint ventures or
partnerships, interests in mortgages, and Debt instruments as the Partnership
may hold from time to time, and “Property” shall mean any one such asset or
property.

 

“Qualified REIT Subsidiary”
means a qualified REIT subsidiary of the General Partner within the meaning of
Code Section 856(i)(2).

 

“Qualified Transferee”
means an “accredited investor” as defined in Rule 501 promulgated under
the Securities Act.

 

“Qualifying Party” means (a) a
Limited Partner (other than the General Partner to the extent it is also a
Limited Partner), (b) an Additional Limited Partner, or (c) a
Substituted Limited Partner succeeding to all or part of a Limited Partner
Interest of a Limited Partner or an Additional Limited Partner.

 

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

 

6

 

“Redemption Factor” means
1.0; provided, however, that in the event that:

 

(i)  the General Partner (a) 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, (b) splits or
subdivides its outstanding Common Shares or (c) effects a reverse stock
split or otherwise combines its outstanding Common Shares into a smaller number
of Common Shares, the Redemption Factor shall be adjusted by multiplying the
Redemption Factor previously in effect by a fraction, (i) the numerator of
which shall be the number of Common Shares issued and outstanding on the record
date for such dividend, distribution, split, subdivision, reverse split or
combination (assuming for such purposes that such dividend, distribution,
split, subdivision, reverse split or combination has occurred as of such time)
and (ii) 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, split, subdivision, reverse split
or combination;

 

(ii)  the General Partner distributes any rights, options or
warrants to all holders of its Common Shares to subscribe for or to purchase or
to otherwise acquire Common Shares (or other securities or rights convertible
into, exchangeable for or exercisable for Common Shares) at a price per share
less than the Value of a Common Share on the record date for such distribution
(each a “Distributed Right”), then the Redemption Factor shall be adjusted by
multiplying the Redemption Factor previously in effect by a fraction (a) the
numerator of which shall be the number of Common Shares issued and outstanding
on the record date plus the maximum number of Common Shares purchasable under
such Distributed Rights and (b) the denominator of which shall be the
number of Common Shares issued and outstanding on the record date plus a
fraction (1) the numerator of which is the maximum number of Common Shares
purchasable under such Distributed Rights times the minimum purchase price per
Common Share under such Distributed Rights and (2) the denominator of
which is the Value of a Common Share as of the record date; provided, however,
that, if any such Distributed Rights expire or become no longer exercisable,
then the Redemption Factor shall be adjusted, effective retroactively to the
date of distribution of the Distributed Rights, to reflect a reduced maximum
number of Common Shares or any change in the minimum purchase price for the
purposes of the above fraction; and

 

(iii)  the General Partner shall, by dividend or otherwise,
distribute to all holders of its Common Shares evidences of its indebtedness or
assets (including securities, but excluding any dividend or distribution
referred to in subsection (i) above), which evidences of indebtedness
or assets relate to assets not received by the General Partner pursuant to a
pro rata distribution by the Partnership, then the Redemption Factor shall be
adjusted to equal the amount determined by multiplying the Redemption Factor in
effect immediately prior to the close of business on the date fixed for
determination of shareholders entitled to receive such distribution by a
fraction (i) the numerator of which shall be such Value of a Common Share
on the date fixed for such determination and (ii) the denominator of which
shall be the numerator less the then fair market value (as determined by the
General Partner, whose determination shall be conclusive) of the portion of the
evidences of indebtedness or assets so distributed applicable to one Common
Share.

 

Any adjustments to the Redemption Factor shall become effective
immediately after the effective date of such event, retroactive to the record
date, if any, it being intended that (x) adjustments to the Redemption
Factor are to be made 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 Partnership Common
Units and (y) if a Specified Redemption Date shall fall between the record
date and the effective date of any event of the type described above, that the
Redemption Conversion Factor applicable to such redemption shall be adjusted to
take into account such event, provided, however, that any Limited Partner may
waive, by written notice to the General Partner, the effect of any adjustment
to the Redemption Factor applicable to the Partnership Common Units held by
such Limited Partner, and, thereafter, such adjustment will not be effective as
to such Partnership Common Units.

 

“Regulations” means the
applicable income tax regulations under the Code, whether such regulations are
in proposed, temporary or final form, as such regulations may be amended from
time to time (including corresponding provisions of succeeding regulations).

 

“Regulatory Allocations”
has the meaning set forth in Section 6.3.B(viii) hereof.

 

“Restricted Partnership Common Units”
has the meaning set forth in Section 4.10 hereof.

 

“REIT” means a real estate
investment trust qualifying under Code Section 856.

 

“REIT Consideration”
means the aggregate number of Common Shares equal to the product of the Common
Shares Amount and the Applicable Percentage.

 

“REIT Expenses” means (i) costs
and expenses relating to the continuity of existence of the General Partner and
any Person (other than the Partnership) in which the General Partner owns an
equity interest, to the extent not prohibited by Section 7.4 (which
Persons shall, for purposes of this definition, be included within the
definition of “General Partner”), including taxes, fees and assessments
associated therewith (other than federal, state or local income taxes imposed
upon the General Partner as a result of the General Partner’s failure to
distribute to its shareholders an amount equal to its taxable income), any and
all costs, expenses or fees payable to any trustee or director of the General
Partner, (ii) costs and expenses relating to any offer or registration of
securities by the General Partner (the proceeds of which will be contributed or
advanced to the Partnership) and all statements, reports, fees and expenses
incidental thereto, including underwriting discounts and selling commissions
applicable to any such offer of securities, (iii) costs and expenses
associated with the preparation and filing of any periodic reports by the
General Partner under federal, state or local laws or regulations, including
filings with the SEC, (iv) costs and expenses associated with compliance
by the General Partner with laws, rules and regulations promulgated by any
regulatory body, including the SEC, and (v) all other operating or
administrative costs of the General Partner incurred in the ordinary course of
its business; provided, however, that any of the foregoing expenses
that are determined by the General Partner to be expenses relating to the
ownership and operation of, or for the benefit of, the Partnership shall be
treated as reimbursable expenses under Section 7.3.B hereof rather than as
“REIT Expenses.”

 

7

 

“REIT Partner” means (a) a
Partner, including, without limitation, the General Partner, that maintains an
election to qualify as, a REIT, (b) any Qualified REIT Subsidiary of any
Partner that maintains an election to qualify as a REIT and (c) any
Partner that is a Qualified REIT Subsidiary of a REIT.

 

“REIT Payment” has the
meaning set forth in Section 15.11 hereof.

 

“REIT Requirements” means
the requirements for qualification as a REIT under the Code and Regulations,
including, without limitation, the distribution requirements contained in Section 857(a) of
the Code.

 

“Related Party” means,
with respect to any Person, any other Person whose ownership of shares of the
General Partner’s capital stock would be attributed to the first such Person
under Code Section 544 (as modified by Code Section 856(h)(1)(b)).

 

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

 

“SEC” means the
Securities and Exchange Commission.

 

“Securities Act” means the
Securities Act of 1933, as amended, and the rules and regulations
promulgated thereunder.

 

“Services Agreement”
means any management, development or advisory agreement with a property and/or
asset manager for the provision of property management, asset management,
leasing, development and/or similar services with respect to the Properties and
any agreement for the provision of services of accountants, legal counsel,
appraisers, insurers, brokers, transfer agents, registrars, developers,
financial advisors and other professional services, including, without
limitation, the Advisory Agreement.

 

“Special Voting Preferred Stock”
means shares of Special Voting Preferred Stock, $0.01 par value per share, of
the General Partner, as designated by articles supplementary to the Articles of
Incorporation.

 

“Specified Redemption Date”
means the tenth (10th) Business Day after the receipt by the General Partner of
a Notice of Redemption; provided,
however, that a Specified
Redemption Date, as well as the closing of a Redemption or an acquisition of
Tendered Units by a REIT Partner pursuant to Section 8.6.B hereof on any
Specified Redemption Date, may be deferred, in the General Partner’s sole and
absolute discretion, for such time (but in any event not more than one hundred
fifty (150) days in the aggregate) as may reasonably be required to
effect, as applicable, (i) compliance with the Securities Act or other
laws (including, but not limited to, (a) state “blue sky” or other
securities laws and (b) the expiration or termination of the applicable
waiting period, if any, under the Hart-Scott-Rodino Antitrust Improvements Act
of 1976, as amended), or (ii) satisfaction or waiver of other commercially
reasonable and customary closing conditions and requirements for a transaction
of such nature.

 

“Stock Option Plan” means
any stock option plan hereafter adopted by the Partnership or the General
Partner.

 

“Subsidiary” means, with
respect to any Person, any other Person (which is not an individual) of which a
majority of (i) the voting power of the voting equity securities or (ii) the
outstanding equity interests is owned, directly or indirectly, by such Person.

 

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

 

“Taxable REIT Subsidiary”
has the meaning set forth in Section 856(l) of the Code.

 

“Tax Items” has the
meaning set forth in Section 6.4.A hereof.

 

“Tendered Units” has the
meaning set forth in Section 8.6.A hereof.

 

“Tendering Party” has the
meaning set forth in Section 8.6.A hereof.

 

“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; except that sales or other dispositions of assets to
a Subsidiary will not be deemed a Terminating Capital Transaction.

 

“Transfer,” when used
with respect to a Partnership Unit, or all or any portion of a Partnership
Interest, means any sale, assignment, bequest, conveyance, devise, gift
(outright or in trust), pledge, encumbrance, hypothecation, mortgage, exchange,
transfer or other disposition or act of alienation, whether voluntary or
involuntary or by operation of law; provided,
however, that except as otherwise
provided in Article XI, when the term is used in Article XI hereof, “Transfer”
does not include (a) any Redemption of Partnership Common Units by the
Partnership, or acquisition of Tendered Units by a REIT Partner, pursuant to Section 8.6
hereof or (b) any redemption of Partnership Units pursuant to any
Partnership Unit Designation. The terms “Transferred” and “Transferring” have
correlative meanings.

 

8

 

“Unitholder” means the
General Partner or any Holder of Partnership Units.

 

“Value” means, on any
date of determination with respect to a Common Share, the average of the daily
Market Prices for ten (10) consecutive trading days immediately preceding
the date of determination except that, as provided in Section 4.4.B.
hereof, the Market Price for the trading day immediately preceding the date of
exercise of a stock option under any Stock Option Plan shall be substituted for
such average of daily market prices for purposes of Section 4.4 hereof.
For purposes of Section 8.6, the “date of determination” shall be the date
of receipt by the General Partner of a Notice of Redemption or, if such date is
not a Business Day, the immediately preceding Business Day. The term “Market
Price” on any date shall mean, with respect to any class or series of
outstanding Common Shares, the Closing Price for such Common Shares on such
date. The “Closing Price” on any date shall mean the last sale price for such
Common Shares, regular way, or, in case no such sale takes place on such day,
the average of the closing bid and asked prices, regular way, for such Common
Shares, in either case as reported in the principal consolidated transaction reporting
system with respect to securities listed or admitted to trading on the New York
Stock Exchange or, if such Common Shares are not listed or admitted to trading
on the New York Stock Exchange, as reported on the principal consolidated
transaction reporting system with respect to securities listed on the principal
national securities exchange on which such Common Shares are listed or admitted
to trading or, if such Common Shares are not listed or admitted to trading on
any national securities exchange, the last quoted price, or, if not so quoted,
the average of the high bid and low asked prices in the over-the-counter
market, as reported by the National Association of Securities Dealers, Inc.
Automated Quotation System or, if such system is no longer in use, the
principal other automated quotation system that may then be in use or, if such
Common Shares are not quoted by any such organization, the average of the
closing bid and asked prices as furnished by a professional market maker making
a market in such Common Shares selected by the Board of Directors of the
General Partner or, in the event that no trading price is available for such
Common Shares, the fair market value of the Common Shares as determined in good
faith by the Board of Directors of the General Partner.

 

In the event that the Common Shares Amount includes Rights (as defined
in the definition of “Common Shares Amount”) that a holder of Common Shares
would be entitled to receive, then the Value of such Rights shall be determined
by the General Partner acting in good faith.

 

“Voting Direction Provision”
has the meaning set forth in Section 7.1A(6)

 

ARTICLE II

ORGANIZATIONAL MATTERS

 

Section 2.1  Organization.  The Partnership is a limited partnership
organized pursuant to the provisions of the Act and upon the terms and subject
to the 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 2.2  Name.  The name of the Partnership is “The Newkirk Master Limited Partnership.”
The Partnership’s business may be conducted under any other name or names
deemed advisable by the General Partner, including the name of the General
Partner or any Affiliate thereof. The words “Limited Partnership,” “LP,” “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 Partners of such change in the next regular communication to the
Partners.

 

Section 2.3  Registered Office and Agent; Principal
Office.  The address of the
registered office of the Partnership in the State of Delaware is located at
2711 Centerville Road, Suite 400, Wilmington, New Castle County, Delaware
19808,and the registered agent for service of process on the Partnership in the
State of Delaware at such registered office is Corporation Service Company. The
principal office of the Partnership is located at 7 Bulfinch Place, Suite 500,
PO Box 9507, Boston, Massachusetts 02114, or such other place as the General
Partner may from time to time designate by notice to the Limited Partners. The
Partnership may maintain offices at such other place or places within or
outside the State of Delaware as the General Partner deems advisable.

 

Section 2.4  Power of
Attorney.

 

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

 

(1)                                  execute,
swear to, acknowledge, deliver, file and record in the appropriate public
offices (a) all certificates, documents and other instruments (including,
without limitation, this Agreement and the Certificate and all amendments,
supplements or restatements thereof) that the General Partner or the Liquidator
deems appropriate or necessary to form, qualify or continue the existence or
qualification of the Partnership as a limited partnership(or a partnership in
which the Limited Partners have limited liability) in the State of Delaware and
in all other jurisdictions in which the Partnership may or plans to conduct
business or own property; (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 the
Liquidator deems appropriate or necessary to reflect the dissolution and
liquidation of the Partnership pursuant to the terms of this Agreement,
including, without limitation, a certificate of cancellation; (d) all
instruments relating to the admission, withdrawal, removal or substitution of
any Partner pursuant to, or other events described in, Article XI, Article XII
or Article XIII hereof or the Capital Contribution of any Partner; and (e) all
certificates, documents and other instruments relating to the determination of
the rights, preferences and privileges relating to Partnership Interests; and

 

9

 

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

 

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

 

B.                                     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 Limited
Partners and Assignees will be relying upon the power of the General Partner
and any Liquidator to act as contemplated by this Agreement in any filing or
other action by it on behalf of the Partnership, and it shall survive and not
be affected by the subsequent Incapacity of any Limited Partner or Assignee and
the Transfer of all or any portion of such Limited Partner’s or Assignee’s
Partnership Units or Partnership Interest 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 that 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 the Liquidator’s request therefor, such further designation, powers of
attorney and other instruments as the General Partner or the Liquidator, as the
case may be, deems necessary to effectuate this Agreement and the purposes of
the Partnership.

 

Section 2.5  Term.  Pursuant to Section 17-217(d) of
the Act, the term of the Partnership commenced on October 11, 2001 and
shall continue until the Partnership is dissolved pursuant to the provisions of
Article XIII hereof or as otherwise provided by law.

 

ARTICLE XII

PURPOSE

 

Section 3.1  Purpose and Business.  The purpose and nature of the business to be
conducted by the Partnership is (i) to conduct any business that may be
lawfully conducted by a limited partnership organized pursuant to the Act; provided, however,
that such business shall be limited to and conducted in such a manner as to
permit the General Partner at all times to be classified as a REIT and avoid
the imposition of federal income and excise taxes on the General Partner,
unless the General Partner ceases to qualify, or is not qualified, as a REIT
for any reason or reasons; (ii) to enter into any partnership, joint
venture, limited liability company or other similar arrangement to engage in
any of the foregoing or the ownership of interests in any entity engaged,
directly or indirectly, in any of the foregoing; and (iii) to do anything
necessary or incidental to the foregoing. Notwithstanding the foregoing, the
General Partner may terminate its status as a REIT under the Code at any time
to the full extent permitted under the Articles of Incorporation.

 

Section 3.2  Powers.  The Partnership shall have full power and
authority 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, directly or through
its ownership interest in other entities, to enter into, perform and carry out
contracts of any kind, borrow money and issue evidences of indebtedness whether
or not secured by mortgage, deed of trust, pledge or other lien, acquire, own,
manage, improve and develop real property, and lease, sell, transfer and
dispose of real property; provided,
however, that the Partnership
shall not take, or refrain from taking, any action which, in the judgment of
the General Partner, in its sole and absolute discretion, (i) could
adversely affect the ability of the General Partner to continue to qualify as a
REIT, (ii) could subject the General Partner 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 General Partner or its securities, unless such action (or inaction)
shall have been specifically consented to by the General Partner in writing.

 

Section 3.3  Partnership Only for Partnership Purposes.  This Agreement shall not be deemed to create
a company, venture or partnership between or among the Partners with respect to
any activities whatsoever other than the activities within the purposes of the
Partnership as specified in Section 3.1 hereof. Except as otherwise
provided in this Agreement, no Partner shall have any authority to act for,
bind, commit or assume any obligation or responsibility on behalf of the
Partnership, its properties or any other Partner. No Partner, in its capacity
as a Partner under this Agreement, shall be responsible or liable for any
indebtedness or obligation of another Partner, and the Partnership shall not be
responsible or liable for any indebtedness or obligation of any Partner,
incurred either before or after the execution and delivery of this Agreement by
such Partner, except as to those responsibilities, liabilities, indebtedness or
obligations incurred pursuant to and as limited by the provisions of this
Agreement and the Act.

 

10

 

Section 3.4  Representations and Warranties by the
Parties.

 

A.                                   Each
Additional Limited Partner and Substituted Limited Partner that is an
individual, as a condition to becoming an Additional Limited Partner or a
Substituted Limited Partner, respectively, shall, by executing this Agreement
or a counterpart thereof, represent and warrant to each other Partner that (i) the
consummation of the transactions contemplated by this Agreement to be performed
by such Partner will not result in a breach or violation of, or a default
under, any material agreement by which such Partner or any of such Partner’s
property is bound, or any statute, regulation, order or other law to which such
Partner is subject, (ii) subject to the last sentence of this Section 3.4.A,
such Partner is neither a “foreign person” within the meaning of Code Section 1445(f) nor
a “foreign partner” within the meaning of Code Section 1446(e), (iii) such
Partner does not own, directly or indirectly, (a) nine and eight tenths
percent (9.8%) or more of the total combined voting power of all classes of
stock entitled to vote, or nine and eight tenths percent (9.8%) or more of the
total number of shares of all classes of stock, of any corporation that is a
tenant of either (A)  the General Partner or any Qualified REIT
Subsidiary, (B) the Partnership or (C) any partnership, venture or
limited liability company of which the General Partner, any Qualified REIT
Subsidiary or the Partnership is a member, as reflected on the then current
tenant list to be maintained by the General Partner (the “Tenant List”) or (b) an
interest of nine and eight tenths percent (9.8%) or more in the assets or net
profits of any tenant of either (A) the General Partner or any Qualified
REIT Subsidiary, (B) the Partnership or (C) any partnership, venture,
or limited liability company of which the General Partner, any Qualified REIT
Subsidiary or the Partnership is a member, as reflected on the Tenant List and (iv) this
Agreement is binding upon, and enforceable against, such Partner in accordance
with its terms. Notwithstanding anything contained herein to the contrary, in
the event that the representation contained in the foregoing clause (ii) would
be inaccurate if given by a Partner, such Partner(w) shall not be required to
make and shall not be deemed to have made such representation, if it delivers
to the General Partner in connection with or prior to its execution of this
Agreement written notice that it may not truthfully make such representation,
(x) hereby agrees that it is subject to, and hereby authorizes the General
Partner to withhold, all withholdings to which such a “foreign person” or “foreign
partner”, as applicable, is subject under the Code and (y) hereby agrees
to cooperate fully with the General Partner with respect to such withholdings,
including by effecting the timely completion and delivery to the General
Partner of all governmental forms required in connection therewith.

 

B.                                     Each
Additional Limited Partner and Substituted Limited Partner that is not an
individual, as a condition to becoming an Additional Limited Partner or a
Substituted Limited Partner, respectively, shall, by executing this Agreement
or a counterpart thereof, represent and warrant to each other Partner(s) that (i) all
transactions contemplated by this Agreement to be performed by it have been
duly authorized by all necessary action, including, without limitation, that of
its general partner(s), committee(s), trustee(s), beneficiaries, directors
and/or shareholder(s), as the case may be, as required, (ii) the
consummation of such transactions shall not result in a breach or violation of,
or a default under, its partnership or operating agreement, trust agreement,
articles, charter or bylaws, as the case may be, any material agreement by
which such Partner or any of such Partner’s properties or any of its partners,
members, beneficiaries, trustees or shareholders, as the case may be, is or are
bound, or any statute, regulation, order or other law to which such Partner or
any of its partners, members, trustees, beneficiaries or shareholders, as the
case may be, is or are subject, (iii) subject to the last sentence of this
Section 3.4.B, such Partner is neither a “foreign person” within the
meaning of Code Section 1445(f) nor a “foreign partner” within the
meaning of Code Section 1446(e), (iv) such Partner does not own,
directly or indirectly, (a) except as otherwise disclosed by the Partner
in writing to the Partnership, nine and eight tenths percent (9.8%) or more of
the total combined voting power of all classes of stock entitled to vote, or
nine and eight tenths percent (9.8%) or more of the total number of shares of
all classes of stock, of any corporation that is a tenant of either (A) the
General Partner or any Qualified REIT Subsidiary, (B) the Partnership or (C) any
partnership, venture or limited liability company of which the General Partner,
any Qualified REIT Subsidiary or the Partnership is a member, as reflected on
the Tenant List or (b) except as otherwise identified by the Partner in
writing to the Partnership, an interest of nine and eight tenths percent (9.8%)
or more in the assets or net profits of any tenant of either (A)  the
General Partner or any Qualified REIT Subsidiary, (B) the Partnership or (C) any
partnership, venture or limited liability company for which the General
Partner, any Qualified REIT Subsidiary or the Partnership is a member, as
reflected on the Tenant List and (vi) this Agreement is binding upon, and
enforceable against, such Partner in accordance with its terms. Notwithstanding
anything contained herein to the contrary, in the event that the representation
contained in the foregoing clause (iii) would be inaccurate if given
by a Partner, such Partner (w) shall not be required to make and shall not
be deemed to have made such representation, if it delivers to the General
Partner in connection with or prior to its execution of this Agreement written
notice that it may not truthfully make such representation, (x) hereby
agrees that it is subject to, and hereby authorizes the General Partner to
withhold, all withholdings to which such a “foreign person” or “foreign partner”,
as applicable, is subject under the Code and (y) hereby agrees to
cooperate fully with the General Partner with respect to such withholdings,
including by effecting the timely completion and delivery to the General
Partner of all internal revenue forms required in connection therewith.

 

C.                                     Each
Partner (including, without limitation, each Additional Limited Partner or
Substituted Limited Partner as a condition to becoming an Additional Limited
Partner or a Substituted Limited Partner) represents, warrants and agrees that
it has acquired and continues to hold its interest in the Partnership for its
own account for investment purposes only and not for the purpose of, or with a
view toward, the resale or distribution of all or any part thereof, and not
with a view toward selling or otherwise distributing such interest or any part
thereof at any particular time or under any predetermined circumstances. Each
Partner further represents and warrants that it is a sophisticated investor,
able and accustomed to handling sophisticated financial matters for itself,
particularly real estate investments, and that it has a sufficiently high net
worth that it does not anticipate a need for the funds that it has invested in
the Partnership in what it understands to be a highly speculative and illiquid
investment.

 

D.                                    The
representations and warranties contained in Sections 3.4.A, 3.4.B and 3.4.C
hereof shall survive the execution and delivery of this Agreement by each
Partner (and, in the case of an Additional Limited Partner or a Substituted
Limited Partner, the admission of such Additional Limited Partner or
Substituted Limited Partner as a Limited Partner in the Partnership) and the
dissolution, liquidation and termination of the Partnership.

 

11

 

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

 

ARTICLE IV

CAPITAL CONTRIBUTIONS AND ISSUANCES OF
PARTNERSHIP INTERESTS

 

Section 4.1  General.  As of the Effective Time, each outstanding
unit of limited partnership interest of the Partnership shall be subject to a
pro rata unit split, such that, as of the Effective Time, each Partnership Unit
will have the same value with respect to the assets of the Partnership as each
Common Share. The precise calculation of the unit split shall be in the sole
discretion of the General Partner. At or about the Effective Time, the General
Partner will make a Capital Contribution to the Partnership in exchange for
Partnership Units.

 

Section 4.2  Issuances of Additional Partnership Interests.

 

A. 
General.  The General
Partner is hereby authorized to cause the Partnership to issue additional
Partnership Interests, in the form of Partnership Units, for any Partnership
purpose, at any time or from time to time, to the Partners (including the
General Partner) or to other Persons, and to admit such Persons as Additional
Limited Partners, for such consideration and on such terms and conditions as
shall be established by the General Partner in its sole and absolute
discretion, all without the approval of any Limited Partners. Without limiting
the foregoing, the General Partner is expressly authorized to cause the
Partnership to issue Partnership Units (i) upon the conversion, redemption
or exchange of any Debt, Partnership Units or other securities issued by the
Partnership, (ii) for less than fair market value, so long as the General
Partner concludes in good faith that such issuance is in the best interests of
the General Partner and the Partnership, and (iii) in connection with any
merger of any other Person into the Partnership or any Subsidiary of the
Partnership if the applicable merger agreement provides that Persons are to
receive Partnership Units in exchange for their interests in the Person merging
into the Partnership or any Subsidiary of the Partnership. Subject to Delaware
law, any additional Partnership Interests may be issued in one or more classes,
or one or more series of any of such classes, with such designations,
preferences and relative, participating, optional or other special rights,
powers and duties as shall be determined by the General Partner, in its sole
and absolute discretion without the approval of any Limited Partner, and set
forth in this Agreement or a written document thereafter attached to and made
an exhibit to this Agreement (each, a “Partnership Unit Designation”). Without
limiting the generality of the foregoing, the General Partner shall have
authority to specify (a) the allocations of items of Partnership income,
gain, loss, deduction and credit to each such class or series of Partnership
Interests; (b) the right of each such class or series of Partnership
Interests to share in Partnership distributions; (c) the rights of each
such class or series of Partnership Interests upon dissolution and liquidation
of the Partnership; (d) the voting rights, if any, of each such class or
series of Partnership Interests; and (e) the conversion, redemption or
exchange rights applicable to each such class or series of Partnership
Interests.

 

B. 
Issuances to the General Partner.  No additional Partnership Units shall be
issued to the General Partner unless (i) the additional Partnership Units
are issued to all Partners in proportion to their respective Percentage
Interests with respect to the class of Partnership Units so issued, (ii) (a) the
additional Partnership Units are (x) Partnership Common Units issued in
connection with an issuance of Common Shares, or (y) Partnership Units
(other than Partnership Common Units) issued in connection with an issuance,
conversion or exercise of Preferred Shares, Other Securities or other interests
in the General Partner (other than Common Shares), which Preferred Shares,
Other Securities or other interests have designations, preferences and other
rights, terms and provisions that are substantially the same as the
designations, preferences and other rights, terms and provisions of the
additional Partnership Units issued to the General Partner, and (b) the
General Partner contributes or otherwise causes to be transferred to the
Partnership the cash proceeds or other consideration received in connection
with the issuance of such Common Shares, Preferred Shares, Other Securities or
other interests in the General Partner, (iii) the additional Partnership
Units are issued upon the conversion, redemption or exchange of Debt,
Partnership Units or other securities issued by the Partnership, or (iv) the
additional Partnership Units are issued pursuant to Sections 4.3B, 4.4, 4.6 or Section 4.7.

 

C. 
No Preemptive Rights. 
No Person, including, without limitation, any Partner or Assignee, shall
have any preemptive, preferential, participation or similar right or rights to
subscribe for or acquire any Partnership Interest.

 

Section 4.3  Additional Funds and Capital Contributions.

 

A. 
General.  The General
Partner may, at any time and from time to time, determine that the Partnership
requires additional funds (“Additional Funds”)
for the acquisition or development of additional Properties, for the redemption
of Partnership Units or for such other purposes as the General Partner may
determine in its sole and absolute discretion. Additional Funds may be obtained
by the Partnership, at the election of the General Partner, in any manner
provided in, and in accordance with, the terms of this Section 4.3 without
the approval of any Limited Partners.

 

B. 
Additional Capital Contributions.  The General Partner, on behalf of the
Partnership, may obtain any Additional Funds by accepting Capital Contributions
from any Partners or other Persons. In connection with any such Capital
Contribution (of cash or property), the General Partner is hereby authorized to
cause the Partnership from time to time to issue additional Partnership Units
(as set forth in Section 4.2 above) in consideration therefor and the
Percentage Interests of the General Partner and the Limited Partners shall be
adjusted appropriately to reflect the issuance of such additional Partnership
Units.

 

12

 

C. 
Loans by Third Parties. 
The General Partner, on behalf of the Partnership, may obtain any
Additional Funds by causing the Partnership to incur Debt to any Person upon
such terms as the General Partner determines appropriate, including making such
Debt convertible, redeemable or exchangeable for Partnership Units; provided,
however, that the Partnership shall not incur any such Debt if (i) a
breach, violation or default of such Debt would be deemed to occur by virtue of
the Transfer by any Limited Partner of any Partnership Interest, or (ii) such
Debt is recourse to any Partner (unless the Partner otherwise agrees).

 

D. 
General Partner Loans. 
The General Partner may provide Additional Funds by causing the
Partnership to incur Debt to the General Partner (each, a “General Partner Loan”) if (i) such
Debt is, to the extent permitted by law, on substantially the same terms and
conditions (including interest rate, repayment schedule, and conversion,
redemption, repurchase and exchange rights) as Funding Debt incurred by the
General Partner, the net proceeds of which are lent to the Partnership to
provide such Additional Funds, or (ii) such Debt is on terms and
conditions no less favorable to the Partnership than would be available to the
Partnership from any third party; provided, however, that the Partnership shall
not incur any such Debt if (a) a breach, violation or default of such Debt
would be deemed to occur by virtue of the Transfer by any Limited Partner of
any Partnership Interest, or (b) such Debt is recourse to any Partner
(unless the Partner otherwise agrees).

 

E. 
Issuance of Securities by the General Partner.

 

(1)                                  The
General Partner shall contribute the cash proceeds or other consideration
received from any issuances from and after the date hereof of Common Shares,
Preferred Shares, Junior Shares or Other Securities, as the case may be, and
from the exercise of the rights contained in any such additional Other
Securities, to the Partnership in exchange for (x) in the case of an
issuance of Common Shares, Partnership Common Units, or (y) in the case of
an issuance of Preferred Shares, Junior Shares or Other Securities, Partnership
Units with designations, preferences and other rights, terms and provisions
that are substantially the same as the designations, preferences and other
rights, terms and provisions of such Preferred Shares, Junior Shares or Other
Securities; provided, however, that the General Partner may
utilize a portion of the proceeds obtained by it from its initial public
offering of Common Shares to purchase Partnership Common Units from existing
Limited Partners in such amounts as the General Partner shall determine in its
sole and absolute discretion. Notwithstanding anything herein to the contrary,
no redemption rights pursuant to Section 8.6 hereof shall attach to any
such Partnership Common Units referred to in the immediately preceding proviso.

 

(2)                                  [Intentionally
Omitted]

 

(3)                                  The
General Partner shall not issue any additional Common Shares, Preferred Shares,
Junior Shares or Other Securities unless the General Partner contributes the cash
proceeds or other consideration received from the issuance of such additional
Common Shares, Preferred Shares, Junior Shares or Other Securities, as the case
may be, and from the exercise of the rights contained in any such additional
Other Securities, to the Partnership in exchange for (x) in the case of an
issuance of Common Shares, Partnership Common Units, or (y) in the case of
an issuance of Preferred Shares, Junior Shares or Other Securities, Partnership
Units with designations, preferences and other rights, terms and provisions
that are substantially the same as the designations, preferences and other
rights, terms and provisions of such Preferred Shares, Junior Shares or Other
Securities; provided, however, that notwithstanding the
foregoing, the General Partner may issue Common Shares, Preferred Shares,
Junior Shares or Other Securities (a) pursuant to Section 4.4 or Section 8.6.B
hereof, (b) pursuant to a dividend or distribution (including any stock
split) of Common Shares, Preferred Shares, Junior Shares or Other Securities to
all of the holders of Common Shares, Preferred Shares, Junior Shares or Other
Securities, as the case may be, (c) upon a conversion, redemption or
exchange of Preferred Shares, (d) upon a conversion of Junior Shares into
Common Shares, (e) upon a conversion, redemption, exchange or exercise of
Other Securities, or (f) in connection with an acquisition of a property
or other asset to be owned, directly or indirectly, by the General Partner if
the General Partner determines that such acquisition is in the best interests
of the Partnership. In the event of any issuance of additional Common Shares,
Preferred Shares, Junior Shares or Other Securities by the General Partner, the
Partnership shall pay the General Partner’s expenses associated with such
issuance, including any underwriting discounts or commissions (it being
understood that payment of some or all of such expenses may be made by the
General Partner on behalf of the Partnership out of the gross proceeds of such
issuance prior to the contribution of such proceeds by the General Partner).

 

Section 4.4  Stock Option
Plan.

 

A. 
Options Granted to Company Employees and Independent Directors.  If at any time or from time to time, in
connection with a Stock Option Plan, a stock option granted to a Company
Employee or an Independent Director is duly exercised:

 

(1)                                  the
General Partner shall, as soon as practicable after such exercise, make a
Capital Contribution to the Partnership in an amount equal to the exercise
price paid to the General Partner by such exercising party in connection with
the exercise of such stock option;

 

(2)                                  on
the date that the General Partner makes a capital contribution pursuant to
4.4.A (1) hereof, the General Partner shall be deemed to have contributed
to the Partnership as a Capital Contribution, in consideration of an additional
Limited Partner Interest (expressed in and as additional Partnership Common
Units), an amount equal to the Value of a Common Share as of the date of
exercise multiplied by the number of Common Shares then being issued in
connection with the exercise of such stock option; and

 

(3)                                  An
equitable Percentage Interest adjustment shall be made in which the General
Partner shall be treated as having made a cash contribution equal to the amount
described in Section 4.4.A(2) hereof.

 

13

 

B. 
Special Valuation Rule. 
For purposes of this Section 4.4, in determining the Value of a
Common Share, only the trading date immediately preceding the exercise of the
relevant stock option under the Stock Option Plan shall be considered.

 

C. 
Future Stock Incentive Plans. 
Nothing in this Agreement shall be construed or applied to preclude or
restrain the General Partner from adopting, modifying or terminating stock
incentive plans, including any Stock Option Plan, for the benefit of employees,
directors or other business associates of the General Partner, the Partnership
or any of their Affiliates. In the event that any such plan is adopted,
modified or terminated by the General Partner, amendments to this Section 4.4
may become necessary or advisable and that any approval or consent of the
Limited Partners required pursuant to the terms of this Agreement in order to
effect any such amendments requested by the General Partner shall not be
unreasonably withheld or delayed.

 

Section 4.5  No Interest; No Return.  No Partner shall be entitled to interest on
its Capital Contribution or on such Partner’s Capital Account. Except as
provided herein or by law, no Partner shall have any right to demand or receive
the return of its Capital Contribution from the Partnership.

 

Section 4.6  Conversion or Redemption of Preferred Shares.

 

A. 
Conversion of Preferred Shares.  If, at any time, any of the Preferred Shares
are converted into Common Shares, in whole or in part, then a number of
Partnership Preferred Units equal to the number of Preferred Shares so
converted shall automatically be converted into a number of Partnership Common
Units equal to (i) the number of Common Shares issued upon such conversion
divided by (ii) the Redemption Factor then in effect, and the Percentage
Interests of the General Partner and the Limited Partners shall be adjusted to
reflect such conversion.

 

B. 
Redemption of Preferred Shares.  If, at any time, any Preferred Shares are
redeemed (whether by exercise of a put or call, automatically or by means of
another arrangement) by the General Partner for cash, the Partnership shall,
immediately prior to such redemption of Preferred Shares, redeem an equal
number of Partnership Preferred Units held by the General Partner, upon the
same terms and for the same price per Partnership Preferred Unit, as such
Preferred Shares are redeemed.

 

Section 4.7  Conversion or Redemption of Junior Shares.

 

A. 
Conversion of Junior Shares. 
If, at any time, any of the Junior Shares are converted into Common
Shares, in whole or in part, then a number of Partnership Common Units equal to
(i) the number of Common Shares issued upon such conversion divided by (ii) the
Redemption Factor then in effect shall be issued to the General Partner, and
the Percentage Interests of the General Partner and the Limited Partners shall
be adjusted to reflect such conversion.

 

B. 
Redemption of Junior Shares. 
If, at any time, any Junior Shares are redeemed (whether by exercise of
a put or call, automatically or by means of another arrangement) by the General
Partner for cash, the Partnership shall, immediately prior to such redemption
of Junior Shares, redeem an equal number of Partnership Junior Units held by
the General Partner, upon the same terms and for the same price per Partnership
Junior Unit, as such Junior Shares are redeemed.

 

Section 4.8  Other Contribution Provisions.  In the event that any Partner is admitted to
the Partnership and is given a Capital Account in exchange for services
rendered to the Partnership, unless otherwise determined by the General Partner
in its sole and absolute discretion, such transaction shall be treated by the
Partnership and the affected Partner as if the Partnership had compensated such
partner in cash and such Partner had contributed the cash to the capital of the
Partnership. In addition, with the consent of the General Partner, one or more
Limited Partners may enter into contribution agreements with the Partnership
which have the effect of providing a guarantee of certain obligations of the
Partnership.

 

Section 4.9  Not Publicly Traded.  The General Partner, on behalf of the
Partnership, shall use commercially reasonable efforts not to take any action
which would result in the Partnership being a “publicly traded partnership”
under and as such term is defined in Section 7704(b) of the Code.

 

Section 4.10   Restricted Units.  In accordance with Section 4.3E, to the
extent the General Partner issues shares of restricted common stock pursuant to
a stock incentive plan, the Partnership shall issue to the General Partner an
equal number of Partnership Common Units that are subject to a similar vesting
schedule, forfeiture provisions and other terms and conditions that correspond
to those of the restricted common stock (“Restricted Partnership Common Units”).
The terms of such Restricted Partnership Common Units shall comply in all
respects with the elective safe harbor provided in proposed Regulations Section 1.83-3(l)
and the proposed revenue procedure issued as part of IRS Notice 2005-43, as
each of the same may be revised and finalized. The Partnership is authorized
and directed to elect such safe harbor, and the Partnership and each of its
partners (including the General Partner, as holder of such Restricted
Partnership Common Units, and any other holder of Partnership Units transferred
in connection with the performance of services) agrees to comply with all
requirements of the safe harbor with respect to all Restricted Partnership
Common Units (or other Partnership Units transferred in connection with the
performance of services) while this election remains effective.

 

14

 

ARTICLE V

DISTRIBUTIONS

 

Section 5.1  Requirement and Characterization of
Distributions.

 

A. 
General.  The General
Partner shall have the exclusive right and authority to declare and cause the
Partnership to make distributions as and when the General Partner deems
appropriate or desirable in its sole discretion. Notwithstanding anything to
the contrary contained herein, in no event may a Partner receive a distribution
with respect to a Partnership Unit for a quarter or shorter period if such
Partner is entitled to receive a distribution for such quarter or shorter
period with respect to a Share for which such Partnership Unit has been
redeemed or exchanged. Unless otherwise expressly provided for herein or in an
agreement at the time a new class of Partnership Unit is created in accordance
with Article IV hereof, no Partnership Unit shall be entitled to a
distribution in preference to any other Partnership Unit. For so long as the
General Partner elects to qualify as a REIT, the General Partner shall make
such reasonable efforts, as determined by it in its sole and absolute
discretion and consistent with the qualification of the General Partner as a
REIT, to make distributions to the Partners in amounts such that the General
Partner will receive amounts sufficient to enable the General Partner to pay
shareholder dividends that will (1) satisfy the REIT Requirements and (2) avoid
any federal income or excise tax liability for the General Partner.

 

B. 
Method.  When, as and
if declared by the General Partner, the Partnership will make distributions to
the General Partner in any amount necessary to enable the General Partner to
pay REIT Expenses, and thereafter (i) first, with respect to any
Partnership Interests that are entitled to any preference in distribution, in
accordance with the rights of such class(es) of Partnership Interests (and,
within such class(es), pro rata in proportion to the respective Percentage
Interests on such Partnership Record Date), and (ii) second, with respect
to any Partnership Interests that are not entitled to any preference in
distribution, in accordance with the rights of such class of Partnership
Interests (and, within such class, pro rata in proportion to the respective
Percentage Interests on such Partnership Record Date). Each holder of
Partnership Interests that are entitled to any preference in distribution shall
be entitled to a distribution in accordance with the rights of any such class
of Partnership Interests (and, within such class, pro rata in proportion to the
respective Percentage Interests on such Partnership Record Date).
Notwithstanding anything to the contrary contained herein, in no event shall
any holder of a Partnership Common Unit receive a distribution with respect to
such Partnership Unit for any quarter until such time as the Partnership has
distributed to the holders of the Partnership Preferred Units all distributions
payable with respect to such Partnership Preferred Units through the last day
of such quarter, in accordance with the instruments designating such
Partnership Preferred Units.

 

Section 5.2  Distributions in Kind.  No right is given to any Unitholder to demand
and receive property other than cash as provided in this Agreement. The General
Partner may determine, in its sole and absolute discretion, to make a
distribution in kind of Partnership assets to the Unitholders, and such assets
shall be distributed in such a fashion as to ensure that the fair market value
is distributed and allocated in accordance with Articles 5, 6 and 10 hereof.

 

Section 5.3  Amounts Withheld.  All amounts withheld pursuant to the Code or
any provisions of any state or local tax law and Section 10.4 hereof with
respect to any allocation, payment or distribution to any Unitholder shall be
treated as amounts paid or distributed to such Unitholder pursuant to Section 5.1
hereof for all purposes under this Agreement.

 

Section 5.4  Distributions Upon Liquidation.  Notwithstanding the other provisions of this Article V,
net 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 Unitholders in accordance with Section 13.2
hereof.

 

Section 5.5  Distributions to Reflect Issuance of
Additional Partnership Units. 
Subject to Section 14.2.D, in the event that the Partnership issues
additional Partnership Units pursuant to the provisions of Article IV
hereof, the General Partner is hereby authorized to make such revisions to this
Article V as it determines are necessary or desirable to reflect the
issuance of such additional Partnership Units, including, without limitation,
making preferential distributions to certain classes of Partnership Units.

 

Section 5.6  Restricted Distributions.  Notwithstanding any provision to the contrary
contained in this Agreement, neither the Partnership nor the General Partner,
on behalf of the Partnership, shall make a distribution to any Unitholder on
account of its Partnership Interest or interest in Partnership Units if such
distribution would violate Section 17-607 of the Act or other applicable
law.

 

ARTICLE VI

ALLOCATIONS

 

Section 6.1  Timing and Amount of Allocations of Net
Income and Net Loss.  Net
Income and Net Loss of the Partnership shall be determined and allocated with
respect to each Partnership Year of the Partnership as of the end of each such
year. Except as otherwise provided in this Article VI, an allocation to a
Unitholder of a share of Net Income or Net Loss shall be treated as an
allocation of the same share of each item of income, gain, loss or deduction
that is taken into account in computing Net Income or Net Loss.

 

Section 6.2  General Allocations.

 

A. 
In General.  Subject to
the terms of any Partnership Unit Designation and Sections 4.10 and 11.6.C and
except as otherwise provided in this Article VI, Net Income and Net Loss
shall be allocated to each of the Holders of Partnership Common Units in
accordance with their respective Percentage Interests at the end of each
Partnership Year.

 

B. 
Allocations to Reflect Issuance of Additional Partnership Units.  In the event that the Partnership issues
additional Partnership Units pursuant to the provisions of Article IV
hereof, the General Partner is hereby authorized to make such revisions to this
Section 6.2 as it determines are necessary or desirable to reflect the
terms of the issuance of such additional Partnership Units, including, without
limitation, making preferential allocations to certain classes of Partnership
Units.

 

15

 

Section 6.3  Additional Allocation Provisions.  Notwithstanding the foregoing provisions of
this Article VI:

 

A. 
Special Allocations Regarding Partnership Preferred Units.  If any Partnership Preferred Units are
redeemed pursuant to Section 4.6.B hereof (treating a full liquidation of
the General Partner Interest for purposes of this Section 6.3.A as
including a redemption of any then outstanding Partnership Preferred Units
pursuant to Section 4.6.B hereof), for the Partnership Year that includes
such redemption (and, if necessary, for subsequent Partnership Years) (a) gross
income and gain shall be allocated to the General Partner to the extent that
the amounts paid or payable with respect to the Partnership Preferred Units so
redeemed (or treated as redeemed) exceed the aggregate Capital Contributions
(net of liabilities assumed or taken subject to by the Partnership) per
Partnership Preferred Unit allocable to the Partnership Preferred Units so
redeemed (or treated as redeemed) and (b) deductions and losses shall be
allocated to the General Partner to the extent that the aggregate Capital
Contributions (net of liabilities assumed or taken subject to by the
Partnership) per Partnership Preferred Unit allocable to the Partnership
Preferred Units so redeemed (or treated as redeemed) exceed the amount paid or
payable with respect to the Partnership Preferred Units so redeemed (or treated
as redeemed).

 

B. 
Regulatory Allocations.

 

(i)  Minimum Gain Chargeback.  Except as otherwise provided in Regulations Section 1.704-2(f),
notwithstanding any other provision of this Article VI, if there is a net
decrease in Partnership Minimum Gain during any Partnership Year, each Holder
of Partnership Units shall be specially allocated items of Partnership income
and gain for such year (and, if necessary, subsequent years) in an amount equal
to such Holder’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 Holder pursuant thereto. The items to be
allocated shall be determined in accordance with Regulations Sections
1.704-2(f)(6) and 1.704-2(j)(2). This Section 6.3.B(i) is
intended to qualify as a “minimum gain chargeback” within the meaning of
Regulations Section 1.704-2(f) and shall be interpreted consistently
therewith.

 

(ii)  Partner Minimum Gain
Chargeback.  Except as
otherwise provided in Regulations Section 1.704-2(i)(4) or in Section 6.3.B(i) hereof,
if there is a net decrease in Partner Minimum Gain attributable to a Partner
Nonrecourse Debt during any Partnership Year, each Holder of Partnership Units
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 Holder’s share
of the net decrease in Partner Minimum Gain attributable to such Partner
Nonrecourse Debt, determined in accordance with Regulations Section 1.704-2(i)(4).
Allocations pursuant to the previous sentence shall be made in proportion to
the respective amounts required to be allocated to each General Partner,
Limited Partner and other Holder pursuant thereto. The items to be so allocated
shall be determined in accordance with Regulations Sections 1.704-2(i)(4) and
1.704-2(j)(2). This Section 6.3.B(ii) is intended to qualify as a “chargeback
of partner nonrecourse debt minimum gain” within the meaning of Regulations Section 1.704-2(i) and
shall be interpreted consistently therewith.

 

(iii)  Nonrecourse Deductions
and Partner Nonrecourse Deductions. 
Any Nonrecourse Deductions for any Partnership Year shall be specially
allocated to the Holders of Partnership Units in accordance with their
Partnership Units. Any Partner Nonrecourse Deductions for any Partnership Year
shall be specially allocated to the Holder(s) 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 Section 1.704-2(i).

 

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

 

(v)  Gross Income Allocation.  In the event that any Holder of Partnership
Units has an Adjusted Capital Account Deficit at the end of any Partnership
Year, each such Holder shall be specially allocated items of Partnership income
and gain in the amount of such excess to eliminate such deficit as quickly as
possible, provided that an allocation pursuant to this Section 6.3.B(v) shall
be made if and only to the extent that such Holder would have a deficit Capital
Account in excess of such sum after all other allocations provided in this Article VI
have been tentatively made as if this Section 6.3.B(v) were not in
the Agreement.

 

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

 

16

 

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

 

(viii)  Curative Allocations.  The allocations set forth in Sections
6.3.B(i), (ii), (iii), (iv), (v), (vi) and (vii) hereof (the “Regulatory
Allocations”) are intended to comply with certain regulatory requirements,
including the requirements of Regulations Sections 1.704-1(b) and 1.704-2.
Notwithstanding the provisions of Section 6.1 hereof, the Regulatory
Allocations shall be taken into account in allocating other items of income,
gain, loss and deduction among the Holders of Partnership Units so that to the
extent possible without violating the requirements giving rise to the
Regulatory Allocations, the net amount of such allocations of other items and
the Regulatory Allocations to each Holder of a Partnership Unit shall be equal
to the net amount that would have been allocated to each such Holder if the
Regulatory Allocations had not occurred.

 

C. 
Special Allocations Upon Liquidation.  Notwithstanding any provision in this Article VI
to the contrary, Net Income or Net Loss realized in connection with a
Terminating Capital Transaction or for any period thereafter (and, if
necessary, constituent items of income, gain, loss and deduction) shall be
specially allocated among the Partners as required so as to cause liquidating
distributions pursuant to Section 13.2.A(4) hereof to be made in the
same amounts and proportions as would have resulted had such distributions
instead been made pursuant to Section 5.1 hereof.

 

D. 
Allocation of Excess Nonrecourse Liabilities.  The Partnership shall allocate “nonrecourse
liabilities” (within the meaning of Regulations Section 1.752-1(a)(2)) of
the Partnership that are secured by multiple Properties under any reasonable
method chosen by the General Partner in accordance with Regulations Section 1.752-3(a)(3)(b).
The Partnership shall allocate “excess nonrecourse liabilities” of the
Partnership under any method approved under Regulations Section 1.752-3(a)(3) as
chosen by the General Partner. For purposes of determining a Holder’s
proportional share of the “excess nonrecourse liabilities” of the Partnership
within the meaning of Regulations Section 1.752-3(a)(3), each Holder’s
interest in Partnership profits shall be equal to such Holder’s share of
Partnership Units.

 

Section 6.4  Tax
Allocations.

 

A. 
In General.  Except as
otherwise provided in this Section 6.4, for income tax purposes under the
Code and the Regulations each Partnership item of income, gain, loss and
deduction (collectively, “Tax Items”) shall be allocated among the Holders of
Partnership Common Units in the same manner as its correlative item of “book”
income, gain, loss or deduction is allocated pursuant to Sections 6.2 and 6.3
hereof.

 

B. 
Allocations Respecting Section 704(c) Revaluations.  Notwithstanding Section 6.4.A hereof,
Tax Items with respect to Property whose Gross Asset Value varies from its
adjusted tax basis in the hands of the Partnership shall be allocated among the
Holders of Partnership Units for income tax purposes pursuant to Regulations
promulgated under Code Section 704(c) so as to take into account such
variation. The Partnership shall account for such variation under the
traditional method as described in Regulations Section 1.704-3.

 

ARTICLE VII

MANAGEMENT AND OPERATIONS OF BUSINESS

 

Section 7.1  Management.

 

A.                                   Except
as otherwise expressly provided in this Agreement, all management powers over
the business and affairs of the Partnership are and shall be exclusively vested
in the General Partner, and no Limited Partner shall have any right to
participate in or exercise control or management power over the business and
affairs of the Partnership. The General Partner may not be removed by the
Partners with or without cause, except with the consent of the General Partner.
In addition to the powers now or hereafter granted to a general partner of a limited
partnership under applicable law or that are granted to the General Partner
under any other provision of this Agreement, the General Partner, subject to
the other provisions 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 3.2 hereof and to
effectuate the purposes set forth in Section 3.1 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 or selling
assets to permit the Partnership to make distributions to its Partners in such
amounts as will permit the General Partner (so long as the General Partner
desires to maintain or restore its status as a REIT) to avoid the payment of
any federal income tax (including, for this purpose, any excise tax pursuant to
Code Section 4981) and to make distributions sufficient to permit the
General Partner to maintain or restore REIT status or otherwise to satisfy the
REIT Requirements), the assumption or guarantee of, or other contracting for,
indebtedness and other liabilities, the issuance of evidences of indebtedness
(including the securing of same by deed to secure debt, mortgage, deed of trust
or other lien or encumbrance on the Partnership’s assets) and the incurring of
any obligations that it deems necessary for the conduct of the activities of
the Partnership;

 

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

 

(3)                                  the
acquisition, sale, lease, transfer, exchange or other disposition of any, all
or substantially all of the assets of the Partnership (including, but not
limited to, the exercise or grant of any conversion, option, privilege or
subscription right or any other right available in connection with any assets
at any time held by the Partnership) or the merger, consolidation,
reorganization or other combination of the Partnership with or into another
entity;

 

17

 

(4)                                  the
mortgage, pledge, encumbrance or hypothecation of any assets of the
Partnership, the use of the assets of the Partnership (including, without
limitation, cash on hand) for any purpose consistent with the terms of this
Agreement and on any terms that it sees fit, including, without limitation, the
financing of the operations and activities of the General Partner, the
Partnership or any of the Partnership’s Subsidiaries, the lending of funds to
other Persons (including, without limitation, the Partnership’s Subsidiaries)
and the repayment of obligations of the Partnership, its Subsidiaries and any
other Person in which the Partnership has an equity investment, and the making
of capital contributions to and equity investments in the Partnership’s
Subsidiaries;

 

(5)                                  the
management, operation, leasing, landscaping, repair, alteration, demolition,
replacement or improvement of any Property, including, without limitation, any
Contributed Property, or other asset of the Partnership or any Subsidiary,
whether pursuant to a Services Agreement or otherwise;

 

(6)                                  the
negotiation, execution and performance of any contracts, leases, conveyances or
other instruments that the General Partner considers useful or necessary to the
conduct of the Partnership’s operations or the implementation of the General
Partner’s powers under this Agreement, including contracting with contractors,
developers, consultants, accountants, legal counsel, the Advisor’s other
professional advisors and other agents and the payment of their expenses and
compensation out of the Partnership’s assets; provided, however, that the Advisory
Agreement must contain a provision (the “Voting Direction Provision”) that
requires the Advisor to vote the shares of Special Voting Preferred Stock in
proportion to the votes (the “LP Direction Votes”) that the Advisor receives
from the holders of Partnership Units (other than the General Partner), subject
to the Advisor Voting Direction Exclusions. The Advisor shall be entitled to
vote its Special Voting Preferred Stock in its sole discretion to the extent
Vornado Realty Trust is not granted LP Direction Votes in respect of its
Partnership Units by virtue of the Advisor Voting Direction Exclusions;

 

(7)                                  the
distribution of Partnership cash or other Partnership assets in accordance with
this Agreement, the holding, management, investment and reinvestment of cash
and other assets of the Partnership, and the collection and receipt of
revenues, rents and income of the Partnership;

 

(8)                                  the
maintenance of such insurance for the benefit of the Partnership and the
Partners as it deems necessary or appropriate, including, without limitation, (i) casualty,
liability and other insurance on the Properties and (ii) liability
insurance for the Indemnitees hereunder;

 

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

 

(10)                            the
control of any matters affecting the rights and obligations of the Partnership,
including the settlement, compromise, submission to arbitration or any other
form of dispute resolution, or abandonment, of any claim, cause of action,
liability, debt or damages, due or owing to or from the Partnership, the
commencement or defense of suits, legal proceedings, administrative
proceedings, arbitrations or other forms of dispute resolution, 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;

 

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

 

(12)                            except
as otherwise specifically set forth in this Agreement, the determination of the
fair market value of any Partnership property distributed in kind using such
reasonable method of valuation as it may adopt; provided that such methods are
otherwise consistent with the requirements of this Agreement;

 

(13)                            the
enforcement of any rights against any Partner pursuant to representations,
warranties, covenants and indemnities relating to such Partner’s contribution
of property or assets to the Partnership;

 

(14)                            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;

 

(15)                            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;

 

(16)                            the
exercise of any of the powers of the General Partner enumerated in this
Agreement on behalf of any Person in which the Partnership does not have an
interest, pursuant to contractual or other arrangements with such Person;

 

(17)                            the
making, execution and delivery of any and all deeds, leases, notes, deeds to
secure debt, mortgages, deeds of trust, security agreements, conveyances,
contracts, guarantees, warranties, indemnities, waivers, releases or legal
instruments or agreements in writing necessary or appropriate in the judgment
of the General Partner for the accomplishment of any of the powers of the
General Partner enumerated in this Agreement;

 

18

 

(18)                            the
issuance of additional Partnership Units, as appropriate and in the General
Partner’s sole and absolute discretion, in connection with Capital
Contributions by Additional Limited Partners and additional Capital Contributions
by Partners pursuant to Article IV hereof;

 

(19)                            the
selection and dismissal of Company Employees (including, without limitation,
employees having titles or offices such as president, vice president, secretary
and treasurer), and agents, outside attorneys, accountants, consultants and
contractors of the Partnership or the General Partner, the determination of
their compensation and other terms of employment or hiring and the delegation
to any such Company Employee the authority to conduct the business of the
Partnership in accordance with the terms of this Agreement; and

 

(20)                            an
election to dissolve the Partnership pursuant to Section 13.1.B hereof.

 

B.                                     Except
as provided in Section 14.2 hereof, the General Partner is authorized to
execute, deliver and perform the above-mentioned agreements and transactions on
behalf of the Partnership without any further act, approval or vote of the
Partners, notwithstanding any other provision of this Agreement, the Act or any
applicable law, rule or regulation. 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 working capital and other reserves in
such amounts as the General Partner, in its sole and absolute discretion, deems
appropriate and reasonable from time to time.

 

D.                                    In
exercising its authority under this Agreement, the General Partner may, but
shall be under no obligation to, take into account the tax consequences to any
Partner (including the General Partner) of any action taken by it. The General
Partner and the Partnership shall not have liability to a 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
pursuant to its authority under this Agreement.

 

E.                                      The
General Partner may not take any action in contravention of this Agreement,
including, without limitation:

 

(1)                                  taking
any action that would make it impossible to carry on the ordinary business of
the Partnership, except as otherwise provided in this Agreement;

 

(2)                                  possessing
Property, or assigning any rights in specific Property, for other than a
Partnership purpose except as otherwise provided in this Agreement, including,
without limitation, Section 7.9;

 

(3)                                  admitting
a Person as a Partner, except as otherwise provided in this Agreement;

 

(4)                                  performing
any act that would subject a Limited Partner to liability as a general partner
in any jurisdiction or any other liability except as provided Section 10.4
hereof or under the Act; or

 

(5)                                  entering
into any contract, mortgage, loan or other agreement that prohibits or
restricts the ability of (a) the General Partner or the Partnership from
satisfying its obligations under Section 8.6 hereof in full or (b) a
Limited Partner from exercising its rights under Section 8.6 hereof to
effect a Redemption in full, except, in either case, with the written consent
of such Limited Partner affected by the prohibition or restriction.

 

Section 7.2  Certificate of Limited Partnership.  To the extent that such action is determined
by the General Partner to be reasonable and necessary or appropriate, the
General Partner shall file amendments to and restatements of the Certificate
and do all the things to maintain the Partnership as a limited partnership(or a
partnership in which the limited partners have limited liability) under the
laws of the State of Delaware and each other state, the District of Columbia or
any other jurisdiction, in which the Partnership may elect to do business or
own property. Except as otherwise required under the Act, the General Partner
shall not be required, before or after filing, to deliver or mail a copy of the
Certificate or any amendment thereto to any Limited Partner. The General
Partner shall use all reasonable efforts to cause to be filed such other
certificates or documents as may be reasonable and necessary or appropriate for
the formation, continuation, qualification and operation of a limited
partnership (or a partnership in which the limited partners have limited
liability to the extent provided by applicable law) in the State of Delaware
and any other state, or the District of Columbia or other jurisdiction, in
which the Partnership may elect to do business or own property.

 

Section 7.3  Reimbursement of the General Partner.

 

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

 

19

 

B.                                     The
Partnership shall be liable for, and shall reimburse the General Partner on a
monthly basis, or such other basis as the General Partner may determine in its
sole and absolute discretion, for all sums expended and all expenses incurred
in connection with the Partnership’s business, including, without limitation, (i) expenses
relating to the ownership of interests in and management and operation of, or
for the benefit of, the Partnership, (ii) compensation of officers and
employees, including, without limitation, payments under future compensation
plans of the General Partner that may provide for stock units, or phantom
stock, pursuant to which employees of the General Partner will receive payments
based upon dividends on or the value of Common Shares, (iii) director fees
and expenses, (iv) all amounts due under a Services Agreement and (v) 
all costs and expenses of the General Partner being a public company, including
costs of filings with the SEC, reports and other distributions to its
shareholders. Such reimbursements shall be in addition to any reimbursement of
the General Partner as a result of indemnification pursuant to Section 7.6
hereof. To the extent practicable, Partnership expenses shall be billed
directly to and paid by the Partnership.

 

C.                                     Reimbursements
to the General Partner or any of its Affiliates by the Partnership pursuant to
this Section 7.3 shall be treated for federal income tax purposes as
non-income reimbursements and not as “guaranteed payments” within the meaning
of Code Section 707(c) or other form or gross income. If and to the
extent that any reimbursement made pursuant to this Section 7.3 cannot be
so characterized, it shall be treated as a distribution to the General Partner
pursuant to Section 5.1.B.

 

Section 7.4  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 (a) the
ownership, acquisition and disposition of Partnership Interests as General
Partner, (b) the management of the business of the Partnership, (c) 
the operation of the General Partner as a reporting company under the Exchange
Act, (d) the General Partner’s operations as a REIT, (e) the
offering, sale, syndication, private placement or public offering of stock,
bonds, securities or other interests, (f) financing or refinancing of any
type related to the Partnership or its assets or activities, (g) any of
the foregoing activities as they relate to a Subsidiary of the Partnership or
of the General Partner and (h) such activities as are incidental thereto.
Nothing contained herein shall be deemed to prohibit the General Partner from
executing guarantees of Partnership debt for which it would otherwise be liable
in its capacity as General Partner. Except as otherwise provided herein, the
General Partner shall not own any assets or take title to assets (other than
temporarily in connection with an acquisition prior to contributing such assets
to the Partnership) other than interests in the Partnership or Subsidiaries of
the Partnership or the General Partner, and other than such cash and cash
equivalents, bank accounts or similar instruments or accounts as the General
Partner deems reasonably necessary, taking into account Section 7.1.D
hereof and the requirements necessary for the General Partner to carry out its
responsibilities contemplated under this Agreement and the Articles of
Incorporation and to qualify as a REIT.

 

Section 7.5  Contracts with Affiliates.

 

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

 

B.                                     Except
as provided in Section 7.4 hereof and subject to Section 3.1 hereof,
the Partnership may transfer assets to joint ventures, limited liability companies,
partnerships, corporations, business trusts 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 to be 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 the
Partnership, directly or indirectly, except pursuant to transactions that are
determined by the General Partner in good faith to be fair and reasonable and
which shall have been approved by a majority of the independent directors of
the General Partner.

 

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 funded by the Partnership for the benefit of employees
of the General Partner, the Partnership, Subsidiaries of the Partnership or any
Affiliate of any of them in respect of services performed, directly or
indirectly, for the benefit of the Partnership or any of the Partnership’s
Subsidiaries.

 

E.                                      Subject
to the proviso contained Section 7.1A(6), the General Partner is expressly
authorized to enter into, in the name and on behalf of the Partnership, any
Services Agreement with Affiliates of any of the Partnership or the General
Partner, on such terms as the General Partner, in its sole and absolute
discretion, believes are advisable.

 

Section 7.6 
Indemnification.

 

A.                                   To
the fullest extent permitted by applicable law, the Partnership shall indemnify
each Indemnitee from and against any and all losses, claims, damages,
liabilities(whether joint or several), expenses (including, without limitation,
attorney’s fees and other legal fees and expenses), judgments, fines,
settlements and other amounts arising from any and all claims, demands,
actions, suits or proceedings, civil, criminal, administrative or
investigative, that relate to the operations of the Partnership (“Actions”) as
set forth in this Agreement in which such Indemnitee may be involved, or is
threatened to be involved, as a party or otherwise; provided, however, that the
Partnership shall not indemnify an Indemnitee (i) for the act or omission
of the Indemnitee material to the matter giving rise to the proceeding which
was committed in bad faith or was the result of active and deliberate
dishonesty; (ii) for any transaction for which such Indemnitee received an
improper personal benefit (in money, property or services) in violation or
breach of any provision of this Agreement; or (iii) in the case of a
criminal proceeding, for an unlawful act or omission by the Indemnitee for
which the Indemnitee had reasonable cause to believe was unlawful. Without
limitation, the foregoing indemnity shall extend to any liability of any
Indemnitee, pursuant to a loan guaranty or otherwise, for any indebtedness of
the Partnership or any Subsidiary of the Partnership (including, without
limitation, any indebtedness which the Partnership or any Subsidiary of the
Partnership has assumed or taken subject to), and the General Partner is hereby
authorized and empowered, on behalf of the Partnership, to enter into one or
more indemnity agreements consistent with the provisions of this Section 7.6
in favor of any Indemnitee having or potentially having liability for any such
indebtedness. It is the intention of this Section 7.6.A that the
Partnership indemnify each Indemnitee to the fullest extent permitted by law.
The termination of any proceeding by judgment, order or settlement does not
create a presumption that the Indemnitee did not meet the requisite standard of
conduct set forth in this Section 7.6.A.

 

20

 

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, does not create a presumption that such
Indemnitee acted in a manner contrary to that specified in this Section 7.6.A
with respect to the subject matter of such proceeding. Any indemnification
pursuant to this Section 7.6 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 7.6.

 

B.                                     To
the fullest extent permitted by law, expenses incurred by an Indemnitee who is
a party to a proceeding or otherwise subject to or the focus of or is involved
in any Action shall be paid or reimbursed by the Partnership as incurred by the
Indemnitee in advance of the final disposition of the Action upon receipt by
the Partnership of (i) a written affirmation by the Indemnitee of the
Indemnitee’s good faith belief that the standard of conduct necessary for
indemnification by the Partnership as authorized in this Section 7.6.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 7.6 shall be in addition to any
other rights to which an Indemnitee or any other Person may be entitled under
any agreement, pursuant to any vote of the Partners, as a matter of law or
otherwise, and shall continue as to an Indemnitee who has ceased to serve in
such capacity and shall inure to the benefit of the heirs, successors, assigns
and administrators of the Indemnitee unless otherwise provided in a written
agreement with such Indemnitee or in the writing pursuant to which such
Indemnitee is indemnified.

 

D.                                    The
Partnership may, but shall not be obligated to, purchase and maintain
insurance, on behalf of any 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.                                      Any
liabilities which an Indemnitee incurs as a result of acting on behalf of the
Partnership or the General Partner (whether as a fiduciary or otherwise) in
connection with the operation, administration or maintenance of an employee
benefit plan or any related trust or funding mechanism (whether such liabilities
are in the form of excise taxes assessed by the IRS, penalties assessed by the
Department of Labor, restitutions to such a plan or trust or other funding
mechanism or to a participant or beneficiary of such plan, trust or other
funding mechanism, or otherwise) shall be treated as liabilities or judgments
or fines under this Section 7.6, unless such liabilities arise as a result
of (i) the act or omission of the Indemnitee material to the matter giving
rise to the proceeding which was committed in bad faith or was the result of
active and deliberate dishonesty; (ii) any transaction for which such
Indemnitee received an improper personal benefit (in money, property or
services) in violation or breach of any provision of this Agreement; or (iii) in
the case of a criminal proceeding, an unlawful act or omission by the
Indemnitee for which the Indemnitee had reasonable cause to believe was
unlawful.

 

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 7.6
because the Indemnitee had an interest in the transaction with respect to which
the indemnification applies if the transaction was otherwise permitted by the
terms of this Agreement.

 

H.                                    The
provisions of this Section 7.6 are for the benefit of the Indemnitees,
their heirs, successors, assigns and administrators and shall not be deemed to
create any rights for the benefit of any other Persons. Any amendment,
modification or repeal of this Section 7.6 or any provision hereof shall
be prospective only and shall not in any way affect the obligations of the
Partnership or the limitations on the Partnership’s liability to any Indemnitee
under this Section 7.6 as in effect immediately prior to such amendment,
modification or repeal with respect to claims arising from or relating to
matters occurring, in whole or in part, prior to such amendment, modification
or repeal, regardless of when such claims may arise or be asserted.

 

I.                                         It
is the intent of the Partners that any amounts paid by the Partnership to the
General Partner pursuant to this Section 7.6 that are not treated for
federal income tax purposes as repayments of advances made by the General
Partner on behalf of the Partnership shall be treated as “guaranteed payments”
within the meaning of Code Section 707(c).

 

Section 7.7  Liability of the General Partner.

 

A.                                   Notwithstanding
anything to the contrary set forth in this Agreement, neither the General
Partner nor any of its directors or officers shall be liable or accountable in
damages or otherwise to the Partnership, any Partners or any Assignees for
losses sustained, liabilities incurred or benefits not derived as a result of
errors in judgment or mistakes of fact or law or of any act or omission if the
General Partner or such director or officer acted in good faith.

 

B.                                     That
the General Partner is under no obligation to give priority to the separate
interests of the Limited Partners or the General Partner’s shareholders
(including, without limitation, the tax consequences to Limited Partners,
Assignees or the General Partner’s shareholders) in deciding whether to cause
the Partnership to take(or decline to take) any actions.

 

21

 

C.                                     Subject
to its obligations and duties as General Partner set forth in Section 7.1.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 employees or agents(subject to the supervision
and control of the General Partner). The General Partner shall not be
responsible for any misconduct or negligence on the part of any such agent
appointed by it in good faith.

 

D.                                    To
the extent that, at law or in equity, the General Partner has duties (including
fiduciary duties) and liabilities relating thereto to the Partnership or the
Limited Partners, the General Partner shall not be liable to the Partnership or
to any other Partner for its good faith reliance on the provisions of this
Agreement. The provisions of this Agreement, to the extent that they restrict
the duties and liabilities of the General Partner otherwise existing at law or
in equity, to replace such other duties and liabilities of such General
Partner.

 

E.                                      Notwithstanding
anything herein to the contrary, except for fraud, willful misconduct or gross
negligence, or pursuant to any express indemnities given to the Partnership by
any Partner pursuant to any other written instrument, no Partner shall have any
personal liability whatsoever, to the Partnership or to the other Partner(s),
for the debts or liabilities of the Partnership or the Partnership’s
obligations hereunder, and the full recourse of the other Partner(s) shall be
limited to the interest of that Partner in the Partnership. To the fullest
extent permitted by law, no officer, director or shareholder of the General
Partner shall be liable to the Partnership for money damages except for (i) active
and deliberate dishonesty established by a non-appealable final judgment or (ii) actual
receipt of an improper benefit or profit in money, property or services.
Without limitation of the foregoing, and except for fraud, willful misconduct
or gross negligence, or pursuant to any such express indemnity, no property or
assets of any Partner, other than its interest in the Partnership, shall be
subject to levy, execution or other enforcement procedures for the satisfaction
of any judgment(or other judicial process) in favor of any other Partner(s) and
arising out of, or in connection with, this Agreement. This Agreement is
executed by the officers of the General Partner solely as officers of the same
and not in their own individual capacities.

 

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

 

Section 7.8  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 that the General Partner reasonably believes to be within
such Person’s professional or expert competence shall be conclusively presumed
to have been done or omitted in good faith and in accordance with such opinion.

 

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

 

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

 

Section 7.9  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 with other Partners or Persons, shall have any ownership interest
in such Partnership assets or any portion thereof. Title to any or all of the
Partnership assets may be held in the name of the Partnership, the General
Partner or one or more nominees, as the General Partner may determine,
including Affiliates of the General Partner. The General Partner hereby
declares and warrants that any Partnership assets for which legal title is held
in the name of the General Partner or any nominee or Affiliate of the General
Partner shall be held by the General Partner for the use and benefit of the
Partnership in accordance with the provisions of this Agreement. All
Partnership assets shall be recorded as the property of the Partnership in its
books and records, irrespective of the name in which legal title to such
Partnership assets is held.

 

22

 

Section 7.10  Reliance by Third Parties.  Notwithstanding anything to the contrary in
this Agreement, any Person dealing with the Partnership shall be entitled to
assume that the General Partner has full power and authority, without the
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 it were the Partnership’s sole party in interest,
both legally and beneficially. Each Limited Partner hereby waives any and all
defenses or other remedies that may be available against such Person to contest,
negate or disaffirm any action of the General Partner in connection with any
such dealing. In no event shall any Person dealing with the General Partner or
its representatives be obligated to ascertain that the terms of this Agreement
have been complied with or to inquire into the necessity or expediency of any
act or action of the General Partner or its representatives. 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 in good faith 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.

 

ARTICLE VIII

RIGHTS AND OBLIGATIONS OF LIMITED PARTNERS

 

Section 8.1  Limitation of Liability.  The Limited Partners shall have no liability
under this Agreement (other than for breach thereof) except as expressly
provided in Section 10.4 or under the Act.

 

Section 8.2  Management of Business.  No Limited Partner or Assignee (other than
the General Partner, any of its Affiliates or any officer, director, member, employee,
partner, agent or trustee of the General Partner, the Partnership or any of
their Affiliates, in their capacity as such) shall take part in the operations,
management or control (within the meaning of the Act) of the Partnership’s
business, transact any business in the Partnership’s name or have the power to
sign documents for or otherwise bind the Partnership. The transaction of any
such business by the General Partner, any of its Affiliates or any officer,
director, member, employee, partner, agent, representative, or trustee of the
General Partner, the Partnership or any of their Affiliates, in their capacity
as such, shall not affect, impair or eliminate the limitations on the liability
of the Limited Partners or Assignees under this Agreement.

 

Section 8.3  Outside Activities of Limited Partners.  Subject to any agreements entered into
pursuant to Section 7.5.E hereof and any other agreements entered into by
a Limited Partner or its Affiliates with the General Partner, the Partnership
or a Subsidiary (including, without limitation, any employment agreement), any
Limited Partner and any Assignee, officer, director, employee, agent, trustee,
Affiliate, member 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 or indirect competition with the Partnership or
that are enhanced by the activities of the Partnership. Neither the Partnership
nor any Partner shall have any rights by virtue of this Agreement in any
business ventures of any Limited Partner or Assignee. Subject to such
agreements, none of the Limited Partners nor any other Person shall have any
rights by virtue of this Agreement or the partnership relationship established
hereby in any business ventures of any other Person (other than the General
Partner, to the extent expressly provided herein), and such Person shall have
no obligation pursuant to this Agreement, subject to Section 7.5.E hereof
and any other agreements entered into by a Limited Partner or its Affiliates
with the General Partner, the Partnership or a Subsidiary, 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 that, if
presented to the Partnership, any Limited Partner or such other Person, could
be taken by such Person.

 

Section 8.4  Return of Capital.  Except pursuant to the rights of Redemption
set forth in Section 8.6 hereof, 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 in Article VI
hereof or 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 8.5  Redemption Factor.  The Partnership shall notify any Limited
Partner that is a Qualifying Party, on request, of the then current Redemption
Factor or any change made to the Redemption Factor.

 

Section 8.6  Redemption Rights of Qualifying Parties.

 

A.                                   From
and after the Lock-Out Date, subject to Section 11.6.D, a Qualifying
Party, but no other Limited Partner or Assignee, shall have the right (subject
to the terms and conditions set forth herein) to require the Partnership to
redeem (a “Redemption”) all or a portion of the Partnership Common Units held
by such Qualifying Party (such Partnership Common Units being hereafter “Tendered
Units”) in exchange for the Cash Amount payable on the Specified Redemption
Date. Any Redemption shall be exercised pursuant to a Notice of Redemption
delivered to the General Partner by such Qualifying Party (the “Tendering Party”)
when exercising the Redemption right. The Partnership’s obligation to effect a
Redemption, however, shall not arise or be binding against the Partnership
before the Business Day following the Cut-Off Date. Regardless of the binding
or non-binding nature of a pending Redemption, a Tendering Party shall have no
right to receive distributions with respect to any Tendered Units (other than
the Cash Amount) paid after delivery of the Notice of Redemption, whether or
not the Partnership Record Date for such distribution precedes or coincides
with such delivery of the Notice of Redemption. In the event of a Redemption,
the Cash Amount shall be delivered as a certified check payable to the
Tendering Party or, in the General Partner’s sole and absolute discretion, in
immediately available funds.

 

23

 

B.                                     Notwithstanding
the provisions of Section 8.6.A hereof, on or before the close of business
on the Cut-Off Date, the General Partner may, in its sole and absolute
discretion but subject to the Ownership Limit and the transfer restrictions and
other limitations of the Articles of Incorporation, elect to acquire, up to
100% of the Tendered Units from the Tendering Party (the percentage elected to
be acquired by the General Partner being referred to as the “Applicable
Percentage”) in exchange for the REIT Consideration. It shall be a condition to
the General Partner’s ability to deliver the REIT Consideration that any such
consideration shall consist of shares of Common Stock which shall, upon
issuance, be duly authorized, validly issued, fully paid and nonassessable. In making
such election, the General Partner shall act in a fair, equitable and
reasonable manner that neither prefers one group or class of Qualifying Parties
over another nor discriminates against a group or class of Qualifying Parties.
If the General Partner so elects, on the Specified Redemption Date the
Tendering Party shall sell the Applicable Percentage of the Tendered Units to
the General Partner in exchange for the REIT Consideration. The Tendering Party
shall submit (i) such information, certification or affidavit as the
General Partner may reasonably require in connection with the application of
the Ownership Limit and any other restrictions and limitations imposed by the
Articles of Incorporation on such acquisition and (ii) such written
representations, investment letters, legal opinions or other instruments
necessary in the view of the General Partner to effect compliance with the
Securities Act. In the event of a purchase of any Tendered Units by the General
Partner pursuant to this Section 8.6.B, the Tendering Party shall no
longer have the right to cause the Partnership to effect a Redemption of such
Tendered Units, and, upon notice to the Tendering Party by the General Partner
given on or before the close of business on the Cut-Off Date, that the General
Partner has elected to acquire some or all of the Tendered Units pursuant to
this Section 8.6.B, the Partnership shall have no obligation to effect a
Redemption of the Tendered Units as to which the notice by the General Partner
relates. The REIT Consideration shall be delivered by the General Partner as
duly authorized, validly issued, fully paid and non-assessable Common Shares
and, if applicable, Rights, free of any pledge, lien, encumbrance or
restriction, other than the Ownership Limit and other restrictions provided in
the Articles of Incorporation, the Bylaws of the General Partner, the
Securities Act and relevant state securities or “blue sky” laws. Neither any
Tendering Party whose Tendered Units are acquired by the General Partner
pursuant to this Section 8.6.B, any Partner nor any other interested
Person shall have any right to require or cause the General Partner to
register, qualify or list any Common Shares owned or held by such Person,
whether or not such Common Shares are issued pursuant to this Section 8.6.B,
with the SEC, with any state securities commissioner, department or agency,
under the Securities Act or the Exchange Act or with any stock exchange; provided, however, that this limitation
shall not be in derogation of any registration or similar rights granted
pursuant to any other written agreement between the General Partner and any
such Person. Notwithstanding any delay in such delivery, the Tendering Party
shall be deemed the owner of such Common Shares and Rights for all purposes,
including, without limitation, rights to vote or consent, receive dividends,
and exercise rights, as of the Specified Redemption Date. Common Shares issued
upon an acquisition of the Tendered Units by the General Partner pursuant to
this Section 8.6.B may contain such legends regarding restrictions under
the Securities Act and applicable state securities laws as the General Partner
in good faith determines to be necessary or advisable in order to ensure
compliance with such laws.

 

C.                                     Notwithstanding
the provisions of Sections 8.6.A and 8.6.B hereof, no Tendering Party shall
have any rights (including any right to a Redemption pursuant to Section 8.6A)
under this Agreement that would otherwise be prohibited under the Articles of
Incorporation with respect to the Ownership Limit. To the extent that any
attempted Redemption or acquisition of the Tendered Units by the General
Partner pursuant to Section 8.6.B hereof would be in violation of this Section 8.6.C,
it shall be null and void ab initio, and the Tendering Party shall not acquire
any rights or economic interests in Common Shares otherwise issuable by the
General Partner under Section 8.6.B hereof.

 

D.                                    [intentionally
omitted]

 

E.                                      Notwithstanding
the provisions of Section 8.6.B hereof, the General Partner shall not,
under any circumstances, elect to acquire Tendered Units in exchange for the
REIT Consideration if such exchange would be prohibited under the Articles of
Incorporation.

 

F.                                      Notwithstanding
anything herein to the contrary (but subject to Section 8.6.C hereof),
with respect to any Redemption (or any tender of Partnership Common Units for
Redemption if the Tendered Units are acquired by the General Partner pursuant
to Section 8.6.B hereof) pursuant to this Section 8.6:

 

(1)                                  All
Partnership Common Units acquired by the General Partner pursuant to Section 8.6.B
hereof may, at the election of the General Partner, be converted into and
deemed to be a General Partner Interest comprised of the same number of
Partnership Common Units.

 

(2)                                  Subject
to the Ownership Limit, no Tendering Party may effect a Redemption for less
than five hundred (500) Partnership Common Units or, if such Tendering
Party holds (as a Limited Partner or, economically, as an Assignee) less than
five hundred (500) Partnership Common Units, all of the Partnership Common
Units held by such Tendering Party.

 

(3)                                  Each
Tendering Party (a) may effect a Redemption only once in each fiscal
quarter of a twelve-month period, unless otherwise permitted by the General
Partner, in its sole and absolute discretion and (b) may not effect a
Redemption during the period after the Partnership Record Date with respect to
a distribution and before the record date established by the General Partner
for a distribution to its shareholders of some or all of its portion of such
Partnership distribution.

 

(4)                                  The
consummation of such Redemption (or an acquisition of Tendered Units by the
General Partner pursuant to Section 8.6.B hereof, as the case may be)
shall be subject to the expiration or termination of the applicable waiting
period, if any, under the Hart-Scott-Rodino Antitrust Improvements Act of 1976,
as amended.

 

24

 

(5)                                  Subject
to Section 8.6.A, the Tendering Party shall continue to own all Partnership
Common Units subject to any Redemption, and be treated as a Limited Partner, as
applicable, with respect to such Partnership Common Units for all purposes of
this Agreement, until such Partnership Common Units are either paid for by the
Partnership pursuant to Section 8.6.A hereof or transferred to the General
Partner and paid for, by the issuance of the Common Shares, pursuant to Section 8.6.B
hereof on the Specified Redemption Date. Until a Specified Redemption Date and
an acquisition of the Tendered Units by the General Partner pursuant to Section 8.6.B
hereof, the Tendering Party shall have no rights as a shareholder of the
General Partner with respect to the Common Shares issuable in connection with
such acquisition.

 

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

 

(7)                                  No
Limited Partner may require a Redemption hereunder to the extent that the
issuance of REIT Consideration pursuant to Section 8.6.B hereof would
violate ownership limitations contained in the Articles of Incorporation or
would violate any REIT Requirement (notwithstanding that any such Tendered
Units could otherwise be acquired for cash pursuant to Section 8.6.A
hereof).

 

For purposes of determining compliance with the restrictions set forth
in this Section 8.6.F, all Partnership Common Units beneficially owned by
a Related Party of a Tendering Party shall be considered to be owned or held by
such Tendering Party.

 

G.                                     In
connection with an exercise of Redemption rights pursuant to this Section 8.6,
the Tendering Party shall submit the following to the General Partner, in
addition to the Notice of Redemption:

 

(1)                                  A
written affidavit, dated the same date as the Notice of Redemption, (a) disclosing
the actual and constructive ownership, as determined for purposes of Code
Sections 856(a)(6) and 856(h), of Common Shares by (i) such Tendering
Party and (ii) any Related Party and (b) representing that, after
giving effect to the Redemption or an acquisition of the Tendered Units by the
General Partner pursuant to Section 8.6.B hereof, neither the Tendering
Party nor any Related Party will own Common Shares in excess of the Ownership
Limit;

 

(2)                                  A
written representation that neither the Tendering Party nor any Related Party
has any intention to acquire any additional Common Shares prior to the closing
of the Redemption or an acquisition of the Tendered Units by a REIT Partner
pursuant to Section 8.6.B hereof on the Specified Redemption Date; and

 

(3)                                  An
undertaking to certify, at and as a condition to the closing of (i) the
Redemption or (ii) the acquisition of the Tendered Units by the General
Partner pursuant to Section 8.6.B hereof on the Specified Redemption Date,
that either (a) the actual and constructive ownership of Common Shares by
the Tendering Party and any Related Party remain unchanged from that disclosed
in the affidavit required by Section 8.6.G (1) or (b) after
giving effect to the Redemption or an acquisition of the Tendered Units by the
General Partner pursuant to Section 8.6.B hereof, neither the Tendering
Party nor any Related Party shall own Common Shares in violation of the
Ownership Limit.

 

Section 8.7  Partnership Right to Call Limited Partner
Interests.  Notwithstanding
any other provision of this Agreement, on and after the date on which the
aggregate Percentage Interests of the Limited Partners are less than one
percent (1%), the Partnership shall have the right, but not the obligation,
from time to time and at any time to redeem any and all outstanding Limited
Partner Interests by treating any Limited Partner as a Tendering Party who has
delivered a Notice of Redemption pursuant to Section 8.6 hereof for the
amount of Partnership Common Units to be specified by the General Partner, in
its sole and absolute discretion, by notice to such Limited Partner that the
Partnership has elected to exercise its rights under this Section 8.7.
Such notice given by the General Partner to a Limited Partner pursuant to this Section 8.7
shall be treated as if it were a Notice of Redemption delivered to the General
Partner by such Limited Partner. For purposes of this Section 8.7, (a) any
Limited Partner (whether or not otherwise a Qualifying Party) may, in the
General Partner’s sole and absolute discretion, be treated as a Qualifying
Party that is a Tendering Party and (b) the provisions of Sections
8.6.F(2), and 8.6.F(3) hereof shall not apply, but the remainder of Section 8.6
hereof shall apply, mutatis mutandis.

 

Section 8.8  Mergers.  The General Partner shall not permit the
Partnership to be a party to any consolidation, merger, combination or other
transaction pursuant to which the Partnership Common Units are converted or
changed into or exchanged for partnership interests and/or other securities of
another operating partnership in an UPREIT or similar structure, in each case
without the affirmative vote of the holders of at least a majority of the
outstanding Common Units, voting separately as a class, unless upon
consummation of any such consolidation, merger, combination or other
transaction, the holders of Common Units shall receive shares of stock or
beneficial interest or other equity securities of the parent REIT of such
operating partnership with preferences, rights and privileges not materially
inferior to the preferences, rights and privileges of Common Shares. This Section 8.8
shall not be amended or modified without the prior consent of the holders of at
least a majority of the Common Units.

 

25

 

ARTICLE IX

BOOKS, RECORDS, ACCOUNTING AND REPORTS

 

Section 9.1  Records and Accounting.

 

A.                                   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 9.3
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 for, 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.

 

B.                                     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 on such other basis as the General Partner determines to be
necessary or appropriate. To the extent permitted by sound accounting practices
and principles, the Partnership and the General Partner may operate with
integrated or consolidated accounting records, operations and principles.

 

Section 9.2  Partnership Year.  The Partnership Year of the Partnership shall
be the calendar year.

 

Section 9.3  Reports.

 

A.                                   As
soon as practicable, but in no event later than one hundred twenty
(120) days after the close of each Partnership Year, the General Partner
shall cause to be mailed to each Limited Partner of record as of the close of
the Partnership Year an annual report containing financial statements of the
Partnership, or of the General Partner if such statements are prepared solely
on a consolidated basis with the General Partner, for such Partnership Year,
presented in accordance with generally accepted accounting principles, such
statements to be audited by a nationally recognized firm of independent public
accountants selected by the General Partner.

 

B.                                     As
soon as practicable, but in no event later than 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 of record as of the last day of the calendar quarter a
report containing unaudited financial statements of the Partnership, or of the
General Partner if such statements are prepared solely on a consolidated basis
with the General Partner, and such other information as may be required by
applicable law or regulation or as the General Partner determines to be
appropriate.

 

ARTICLE X

TAX MATTERS

 

Section 10.1  Preparation of Tax Returns.  The General Partner shall arrange for the
preparation and timely filing of all returns with respect to Partnership
income, gains, deductions, losses and other items required of the Partnership
for federal and state income tax purposes and shall use all reasonable effort
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. The Limited Partners shall promptly provide the
General Partner with such information relating to the Contributed Properties,
including tax basis and other relevant information, as may be reasonably
requested by the General Partner from time to time.

 

Section 10.2  Tax Elections.  Except as otherwise provided herein, the
General Partner shall, in its sole and absolute discretion, determine whether
to make or revoke any available election pursuant to the Code, including, but
not limited to, the election under Code Section 754.

 

Section 10.3  Tax Matters Partner.

 

A.                                   The
General Partner shall be the “tax matters partner” of the Partnership for
federal income tax purposes. 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 in addition to
any reimbursement pursuant to Section 7.3 hereof. 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. At
the request of any Limited Partner, the General Partner agrees to consult with
such Limited Partner with respect to the preparation and filing of any returns
and with respect to any subsequent audit or litigation relating to such
returns; provided, however, that
the filing of such returns shall be in the sole and absolute discretion of the
General Partner.

 

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 Code Section 6231) or a
member of a “notice group” (as defined in Code Section 6223(b)(2));

 

(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 United States Tax Court or the United States Claims
Court, or the filing of a complaint for refund with the District Court of the
United States for the district in which the Partnership’s principal place of
business is located;

 

26

 

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

 

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

 

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

 

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

 

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

 

Section 10.4  Withholding.  Each Limited Partner hereby authorizes the
Partnership to withhold from or pay on behalf of or with respect to such
Limited Partner, any amount of federal, state, local or foreign taxes that the
General Partner determines that the Partnership is required to withhold or pay
with respect to any amount distributable or allocable to such Limited Partner
pursuant to this Agreement, including, without limitation, any taxes required
to be withheld or paid by the Partnership pursuant to Section 1441, 1442,
1445 or 1446 of the Code. Any amount paid on behalf of or with respect to a
Limited Partner shall constitute a recourse 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 that 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 that
would, but for such payment, be distributed to the Limited Partner. Any amounts
withheld pursuant to the foregoing clause (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 Interests to secure
such Limited Partner’s obligation to pay to the Partnership any amounts
required to be paid pursuant to this Section 10.4. In the event that a
Limited Partner fails to pay any amounts owed to the Partnership pursuant to
this Section 10.4 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
(including, without limitation, the right to receive distributions). Any
amounts payable by a Limited Partner hereunder shall bear interest at the base
rate on corporate loans at large United States money center commercial banks,
as published from time to time in The Wall Street Journal, plus four (4) percentage
points (but not higher than the maximum lawful rate) 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 General Partner shall
request in order to perfect or enforce the security interest created hereunder.

 

Section 10.5  Organizational Expenses.  The Partnership shall elect to deduct expenses,
if any, incurred by it in organizing the Partnership ratably over the period
provided in Section 709 of the Code.

 

ARTICLE XI

TRANSFERS AND WITHDRAWALS

 

Section 11.1  Transfer.

 

A.                                   No
part of the interest of a Partner shall be subject to the claims of any
creditor, to any spouse for alimony or support, or to legal process, and may
not be voluntarily or involuntarily alienated or encumbered except as may be
specifically provided for in this Agreement.

 

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

 

C.                                     Notwithstanding
the other provisions of this Article XI (other than Section 11.6.D
hereof), the Partnership Interests of the General Partner may be Transferred,
in whole or in part, at any time or from time to time, to any Person that is,
at the time of such Transfer, a Qualified REIT Subsidiary. Any transferee of
the entire General Partner Interest pursuant to this Section 11.1.C shall
automatically become, without further action or Consent of any Limited
Partners, the sole general partner of the Partnership, subject to all the
rights, privileges, duties and obligations under this Agreement and the Act
relating to a general partner. Upon any Transfer permitted by this Section 11.1.C,
the transferor Partner shall be relieved of all its obligations under this
Agreement. The provisions of Section 11.2.B (other than the last sentence
thereof), 11.3, 11.4.A and 11.5 hereof shall not apply to any Transfer
permitted by this Section 11.1.C.

 

D.                                    No
Transfer of any Partnership Interest 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 or exchange for the REIT Consideration any
Partnership Units in which a security interest is held by such lender
concurrently with such time as 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.

 

27

 

Section 11.2  Transfer of General Partner’s Partnership
Interest.

 

A.                                   The
General Partner may not Transfer any of its General Partner Interest or
withdraw from the Partnership except as provided in Sections 11.1.C, 11.2.B and
11.2.C hereof.

 

B.                                     Except
as set forth in Section 11.1.C above and Section 11.2.C below, the
General Partner shall not withdraw from the Partnership and shall not Transfer
all or any portion of its interest in the Partnership (whether by sale,
disposition, statutory merger or consolidation, liquidation or otherwise)
without the Consent of the Limited Partners, which Consent may be given or
withheld in the sole and absolute discretion of the Limited Partners. Upon any
Transfer of such a Partnership Interest pursuant to the Consent of the Limited
Partners and otherwise in accordance with the provisions of this Section 11.2.B,
the transferee shall become a successor General Partner for all purposes
herein, and shall be vested with the powers and rights of the transferor
General Partner, and shall be liable for all obligations and responsible for
all duties of the General Partner, once such transferee has executed such
instruments as may be necessary to effectuate such admission and to confirm the
agreement of such transferee to be bound by all the terms and provisions of
this Agreement with respect to the Partnership Interest so acquired. It is a
condition to any Transfer otherwise permitted hereunder that the transferee
assumes, by operation of law or express agreement, all of the obligations of
the transferor General Partner under this Agreement with respect to such
Transferred Partnership Interest, and such Transfer shall relieve the
transferor General Partner of its obligations under this Agreement without the
Consent of the Limited Partners. In the event that the General Partner
withdraws from the Partnership, in violation of this Agreement or otherwise, or
otherwise dissolves or terminates, or upon the bankruptcy of the General
Partner, a Majority in Interest of the Limited Partners may elect to continue
the Partnership business by selecting a successor General Partner in accordance
with the Act.

 

C.                                     Notwithstanding
Section 11.2.B, the General Partner may merge with another entity if
immediately after such merger substantially all of the assets of the surviving
entity, other than the General Partner Interest held by the General Partner,
are contributed to the Partnership as a Capital Contribution in exchange for
Partnership Units.

 

Section 11.3  Transfer of Limited Partners’ Partnership
Interests.

 

A.                                   General.
No Limited Partner shall Transfer all or any portion of its Partnership
Interest to any transferee without the consent of the General Partner, which
consent may be withheld in its sole and absolute discretion, provided, however, that subject to Section 11.3.E
hereof, any Limited Partner that is an individual may transfer all or any
portion of his Partnership Interest to his immediate family or a trust for his
immediate family without the consent of the General Partner, provided, further, that the General
Partner has the right not to admit such transferee as a Substituted Limited
Partner in the Partnership.

 

B.                                     Conditions
to Transfer Consent. Without limiting the generality of Section 11.3.A
hereof, it is expressly understood and agreed that the General Partner will not
consent to any Transfer of all or any portion of any Partnership Interest
pursuant to Section 11.3.A above unless such Transfer meets each of the
following conditions:

 

(1)                                  Qualified
Transferee. Such Transfer is made only to a single Qualified Transferee; provided, however, that, for such
purposes, all Qualified Transferees that are Affiliates, or that comprise
investment accounts or funds managed by a single Qualified Transferee and its
Affiliates, shall be considered together to be a single Qualified Transferee.

 

(2)                                  Assumption
of Obligations. The transferee in such Transfer assumes by operation of law
or express agreement all of the obligations of the transferor Limited Partner
under this Agreement with respect to such Transferred Partnership Interest;
provided, that no such Transfer (unless made pursuant to a statutory merger or
consolidation wherein all obligations and liabilities of the transferor Partner
are assumed by a successor corporation by operation of law) shall relieve the
transferor Partner of its obligations under this Agreement without the approval
of the General Partner, in its sole and absolute discretion. Notwithstanding
the foregoing, any transferee of any Transferred Partnership Interest shall be
subject to any and all ownership limitations contained in the Articles of
Incorporation that may limit or restrict such transferee’s ability to exercise
its Redemption rights, including, without limitation, the Ownership Limit. Any
transferee, whether or not admitted as a Substituted Limited Partner, shall
take subject to the obligations of the transferor hereunder. Unless admitted as
a Substituted Limited Partner, no transferee, whether by a voluntary Transfer,
by operation of law or otherwise, shall have any rights hereunder, other than
the rights of an Assignee as provided in Section 11.5 hereof.

 

(3)                                  Effective
Date. Such Transfer is to be effective as of the first day of a fiscal
quarter of the Partnership.

 

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

 

28

 

D.                                    Opinion
of Counsel. In connection with any proposed Transfer of a Limited Partner
Interest, the General Partner shall have the right to receive an opinion of
counsel reasonably satisfactory to it to the effect that the proposed Transfer
may be effected without registration under the Securities Act and will not
otherwise violate any federal or state securities laws or regulations
applicable to the Partnership or the Partnership Interests Transferred.

 

E.                                      Adverse
Tax Consequences. No Transfer by a Limited Partner of its Partnership
Interests may be made to or by 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 or would result in a termination of
the Partnership under Code Section 708, or (ii) such Transfer would
be effectuated through an “established securities market” or a “secondary
market (or the substantial equivalent thereof)” within the meaning of Code Section 7704.

 

Section 11.4  Substituted Limited Partners.

 

A.                                   A
transferee of the interest of a Limited Partner pursuant to a Transfer
consented to by the General Partner pursuant to Section 11.3.A may be
admitted as a Substituted Limited Partner only with the consent of the General
Partner, which consent may be given or withheld by the General Partner in its
sole and absolute discretion. The failure or refusal by the General Partner 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
the General Partner. Subject to the foregoing, an Assignee shall not be
admitted as a Substituted Limited Partner until and unless it furnishes to the
General Partner (i) evidence of acceptance, in form and substance
satisfactory to the General Partner, of all the terms, conditions and
applicable obligations of this Agreement, (ii) a counterpart signature page to
this Agreement executed by such Assignee and (iii) such other documents
and instruments as may be required or advisable, in the sole and absolute
discretion of the General Partner, to effect such Assignee’s admission as a
Substituted Limited Partner.

 

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

 

C.                                     Upon
the admission of a Substituted Limited Partner, the General Partner shall amend
its books and records to reflect the name, address and number of Partnership
Units of such Substituted Limited Partner and to eliminate or adjust, if
necessary, the name, address and number of Partnership Units of the predecessor
of such Substituted Limited Partner.

 

Section 11.5  Assignees.  If the General Partner, in its sole and
absolute discretion, does not consent to the admission of any transferee of any
Partnership Interest as a Substituted Limited Partner in connection with a
transfer permitted by the General Partner pursuant to Section 11.3.A, such
transferee shall be considered an Assignee for purposes of this Agreement. An
Assignee shall be entitled to all the rights of an assignee of a limited
partnership interest under the Act, including the right to receive
distributions from the Partnership and the share of Net Income, Net Losses and
other items of income, gain, loss, deduction and credit of the Partnership
attributable to the Partnership Units assigned to such transferee, and the rights
to Transfer the Partnership Units in accordance with the provisions of this Article XI,
but shall not be deemed to be a holder of Partnership Units for any other
purpose under this Agreement, and shall not be entitled to effect a Consent or
vote or effect a Redemption with respect to such Partnership Units on any
matter presented to the Limited Partners for approval (such right to Consent or
vote or effect a Redemption, to the extent provided in this Agreement or under
the Act, fully remaining with the transferor Limited Partner). In the event
that any such transferee desires to make a further assignment of any such
Partnership Units, such transferee shall be subject to all the provisions of
this Article XI to the same extent and in the same manner as any Limited
Partner desiring to make an assignment of Partnership Units.

 

Section 11.6  General Provisions.

 

A.                                   No
Limited Partner may withdraw from the Partnership other than as a result of a
permitted Transfer of all of such Limited Partner’s Partnership Units in
accordance with this Article XI, with respect to which the transferee
becomes a Substituted Limited Partner, or pursuant to a redemption (or
acquisition by the General Partner) of all of its Partnership Units pursuant to
a Redemption under Section 8.6 hereof and/or pursuant to any Partnership
Unit Designation.

 

B.                                     Any
Limited Partner who shall Transfer all of its Partnership Units in a Transfer (i) consented
to by the General Partner pursuant to this Article XI where such
transferee was admitted as a Substituted Limited Partner, (ii) pursuant to
the exercise of its rights to effect a redemption of all of its Partnership
Units pursuant to a Redemption under Section 8.6 hereof and/or pursuant to
any Partnership Unit Designation or (iii) to the General Partner, whether
or not pursuant to Section 8.6.B hereof, shall cease to be a Limited
Partner.

 

C.                                     If
any Partnership Unit is Transferred in compliance with the provisions of this Article XI,
or is redeemed by the Partnership, or acquired by the General Partner pursuant
to Section 8.6 hereof, on any day other than the first day of a
Partnership Year, then Net Income, Net Losses, each item thereof and all other
items of income, gain, loss, deduction and credit attributable to such
Partnership Unit for such Partnership Year shall be allocated to the transferor
Partner or the Tendering Party, as the case may be, and, in the case of a
Transfer or assignment other than a Redemption, to the transferee Partner, by
taking into account their varying interests during the Partnership Year in
accordance with Code Section 706(d), using the “interim closing of the
books” method or another permissible method selected by the General Partner.
Solely for purposes of making such allocations, each of such items for the
calendar month in which a Transfer occurs shall be allocated to the transferee
Partner and none of such items for the calendar month in which a Transfer or a
Redemption occurs shall be allocated to the transferor Partner or the Tendering
Party, as the case may be, if such Transfer occurs on or before the fifteenth
(15th) day of the month, otherwise such items shall be allocated to the
transferor. All distributions pursuant to Section 5.1 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 Tendering Party, as the case may be, and, in the case
of a Transfer other than a Redemption, all distributions pursuant to Section 5.1
thereafter attributable to such Partnership Unit shall be made to the
transferee Partner.

 

29

 

D.                                    In
no event may any Transfer or assignment of a Partnership Interest by any
Partner (including any Redemption, any acquisition of Partnership Units by the
General Partner or any other acquisition of Partnership Units by the
Partnership) be made (i) to any person or entity who lacks the legal
right, power or capacity to own a Partnership Interest; (ii) in violation
of applicable law; (iii) of any component portion of a Partnership
Interest, such as the Capital Account, or rights to distributions, separate and
apart from all other components of a Partnership Interest; (iv) in the
event that such Transfer would cause the General Partner to cease to comply
with the REIT Requirements; (v) if such Transfer would, in the opinion of
counsel to the Partnership or the General Partner, cause a termination of the
Partnership for federal or state income tax purposes (except as a result of the
Redemption (or acquisition by a REIT Partner) of all Partnership Common Units
held by all Limited Partners); (vi) if such Transfer would, in the opinion
of legal counsel to the Partnership, cause the Partnership to cease to be
classified as a partnership for federal income tax purposes (except as a result
of the Redemption (or acquisition by a REIT Partner) of all Partnership Common
Units held by all Limited Partners); (vii) if 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 ERISA Section 3(14))
or a “disqualified person” (as defined in Code Section 4975(c)); (viii) if
such Transfer would, in the opinion of legal counsel to the Partnership, cause
any portion of the assets of the Partnership to constitute assets of any
employee benefit plan pursuant to Department of Labor Regulations Section 2510.2-101;
(ix) if such Transfer requires the registration of such Partnership
Interest pursuant to any applicable federal or state securities laws;
(x) if such Transfer causes the Partnership to become a “publicly traded
partnership,” as such term is defined in Code 7704(b); or (xi) if such
Transfer subjects the Partnership to regulation under the Investment Company
Act of 1940, the Investment Advisors Act of 1940 or ERISA, each as amended.

 

ARTICLE XII

ADMISSION OF PARTNERS

 

Section 12.1  Admission of Successor General Partner.  A successor to all of the General Partner’s
General Partner Interest pursuant to Section 11.2 hereof who is proposed
to be admitted as a successor General Partner shall be admitted to the
Partnership as the General Partner, effective immediately prior to such
Transfer. Any such successor 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.

 

Section 12.2  Admission of Additional Limited Partners.

 

A.                                   After
the date hereof, a Person (other than an existing Partner) who makes a Capital
Contribution to the Partnership in accordance with this Agreement shall be
admitted to the Partnership as an Additional Limited Partner only upon
furnishing to the General Partner (i) evidence of acceptance, in form and
substance satisfactory to the General Partner, of all of the terms and
conditions of this Agreement, including, without limitation, the power of
attorney granted in Section 2.4 hereof, (ii) a counterpart signature page to
this Agreement executed by such Person and (iii) such other documents or
instruments as may be required in the sole and absolute discretion of the
General Partner in order to effect such Person’s admission as an Additional
Limited Partner.

 

B.                                     Notwithstanding
anything to the contrary in this Section 12.2, no Person shall be admitted
as an Additional Limited Partner without the consent of the General Partner,
which consent may be given or withheld in the General Partner’s sole and
absolute discretion. The admission of any Person as an Additional Limited
Partner shall become effective on the date upon which the name of such Person
is recorded on the books and records of the Partnership, following the 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 of income, gain, loss, deduction and credit
allocable among Partners and Assignees for such Partnership Year shall be
allocated pro rata 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 Code Section 706(d), using the “interim
closing of the books” method or another permissible method selected by the
General Partner. Solely for purposes of making such allocations, each of such
items for the calendar month in which an admission of any Additional Limited
Partner occurs shall be allocated among all the Partners and Assignees
including such Additional Limited Partner, in accordance with the principles
described in Section 11.6.C hereof. All distributions pursuant to Section 5.1
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 pursuant to Section 5.1
thereafter shall be made to all the Partners and Assignees including such
Additional Limited Partner.

 

Section 12.3  Amendment of Agreement and Certificate of
Limited Partnership.  For the
admission to the Partnership of any Partner, the General Partner shall take all
steps necessary and appropriate under the Act to amend the records of the
Partnership and, if necessary, to prepare as soon as practical an amendment of
this Agreement and, if required by law, shall prepare and file an amendment to
the Certificate and may for this purpose exercise the power of attorney granted
pursuant to Section 2.4 hereof.

 

Section 12.4  Limit on Number of Partners.  If the Partnership shall no longer be a
reporting company under the Exchange Act, then unless otherwise permitted by
the General Partner, no Person shall be admitted to the Partnership as an
Additional Limited Partner if the effect of such admission would be to cause
the Partnership to have a number of Partners (including as Partners for this
purpose those Persons indirectly owning an interest in the Partnership through
another partnership, a limited liability company, a subchapter S corporation or
a grantor trust) that would cause the Partnership to become a reporting company
under the Exchange Act.

 

30

 

ARTICLE XIII

DISSOLUTION, LIQUIDATION AND TERMINATION

 

Section 13.1  Dissolution.  The Partnership shall not be dissolved by the
admission of 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 without dissolution. However, the Partnership
shall dissolve, and its affairs shall be wound up, upon the first to occur of
any of the following(each a “Liquidating Event”):

 

A.                                   an
event of withdrawal, as defined in the Act (including, without limitation,
bankruptcy), of the sole General Partner unless, within ninety (90) days
after the withdrawal, a Majority in Interest of the remaining Limited Partners
agree in writing, in their sole and absolute discretion, to continue the
business of the Partnership and to the appointment, effective as of the date of
withdrawal, of a successor General Partner;

 

B.                                     an
election to dissolve the Partnership made by the General Partner in its sole
and absolute discretion, with or without the Consent of the Limited Partners;

 

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

 

D.                                    the
occurrence of a Terminating Capital Transaction.

 

Section 13.2  Winding Up.

 

A.                                   Upon
the occurrence of a Liquidating Event, the Partnership shall continue solely
for the purposes of winding up its affairs in an orderly manner, liquidating
its assets and satisfying the claims of its creditors and Partners. After the
occurrence of a Liquidating Event, 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
that there is no remaining General Partner or the General Partner has
dissolved, become bankrupt within the meaning of the Act or ceased to operate,
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 shares of
stock in the General Partner) shall be applied and distributed in the following
order:

 

(1)                                  First,
to the satisfaction of all of the Partnership’s debts and liabilities to
creditors other than the Partners and their Assignees (whether by payment or
the making of reasonable provision for payment thereof);

 

(2)                                  Second,
to the satisfaction of all of the Partnership’s debts and liabilities to the
General Partner (whether by payment or the making of reasonable provision for
payment thereof), including, but not limited to, amounts due as reimbursements
under Section 7.3 hereof;

 

(3)                                  Third,
to the satisfaction of all of the Partnership’s debts and liabilities to the
other Partners and any Assignees (whether by payment or the making of
reasonable provision for payment thereof); and

 

(4)                                  Subject
to the terms of any Partnership Unit Designation, the balance, if any, to the
General Partner, the Limited Partners and any Assignees in accordance with and
in proportion to 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 XIII.

 

B.                                     Notwithstanding
the provisions of Section 13.2.A hereof that require liquidation of the
assets of the Partnership, but subject to the order of priorities set forth
therein, if prior to or upon dissolution of the Partnership the Liquidator
determines that an immediate sale of part or all of the Partnership’s assets
would be impractical or would cause undue loss to the Partners, the Liquidator
may, in its sole and absolute discretion, defer for a reasonable time the
liquidation of any assets except those necessary to satisfy liabilities of the
Partnership (including to those Partners as creditors) and/or distribute to the
Partners, in lieu of cash, as tenants in common and in accordance with the
provisions of Section 13.2.A 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 event that 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 XIII to the Partners and Assignees that have
positive Capital Accounts in compliance with Regulations Section 1.704-1(b)(2)(ii)(b)(2) to
the extent of, and in proportion to, positive Capital Account balances. If any
Partner has a deficit balance in its Capital Account (after giving effect to
all contributions, distributions and allocations for all taxable years,
including the year during which such liquidation occurs) (a “Capital Account
Deficit”), such Partner shall have no obligation to make a contribution to the
capital of the Partnership on account of such deficit, and such Capital Account
Deficit shall not be considered a debt owed to the Partnership or any other
person for any purpose whatsoever. In the sole and absolute discretion of the
General Partner or the Liquidator, a pro rata portion of the distributions that
would otherwise be made to the Partners pursuant to this Article XIII may
be:

 

31

 

1.                                       distributed
to a trust established for the benefit of the General Partner and the Limited
Partners for the purpose of liquidating Partnership assets, collecting amounts
owed to the Partnership, and paying any contingent or unforeseen liabilities or
obligations of the Partnership or of the General Partner arising out of or in
connection with the Partnership and/or Partnership activities. The assets of
any such trust shall be distributed to the General Partner and the Limited
Partners, from time to time, in the reasonable discretion of the General
Partner, in the same proportions and amounts as would otherwise have been
distributed to the General Partner and the 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 13.2.A hereof as soon as
practicable.

 

Section 13.3  Deemed Distribution and Recontribution.  Notwithstanding any other provision of this Article XIII,
in the event that the Partnership is liquidated within the meaning of Regulations
Section 1.704-1(b)(2)(ii)(g), but no Liquidating Event has occurred, the
Partnership’s Property shall not be liquidated, the Partnership’s liabilities
shall not be paid or discharged and the Partnership’s affairs shall not be
wound up. Instead, for federal income tax purposes the Partnership shall be
deemed to have contributed all of its assets and liabilities to a new
partnership in exchange for an interest in the new partnership; and,
immediately thereafter, distributed interests in the new partnership to the
Partners in accordance with their respective Capital Accounts in liquidation of
the Partnership, and the new partnership is deemed to continue the business of
the Partnership. Nothing in this Section 13.3 shall be deemed to have
constituted any Assignee as a Substituted Limited Partner without compliance
with the provisions of Section 11.4 hereof.

 

Section 13.4  Rights of Limited Partners.  Except as otherwise provided in this
Agreement, (a) each Limited Partner shall look solely to the assets of the
Partnership for the return of its Capital Contribution, (b) no Limited
Partner shall have the right or power to demand or receive property other than
cash from the Partnership and (c) no Limited Partner(other than any
Limited Partner who holds Partnership Preferred Units, to the extent
specifically set forth herein and in the applicable Partnership Unit
Designation) shall have priority over any other Limited Partner as to the
return of its Capital Contributions, distributions or allocations.

 

Section 13.5  Notice of Dissolution.  In the event that a Liquidating Event occurs
or an event occurs that would, but for an election or objection by one or more
Partners pursuant to Section 13.1 hereof, result in a dissolution of the
Partnership, the General Partner shall, within thirty (30) days
thereafter, provide written notice thereof to each of the Partners and, in the
General Partner’s sole and absolute discretion or as required by the Act, to
all other parties with whom the Partnership regularly conducts business (as
determined in the sole and absolute discretion of the General Partner), and the
General Partner may, or, if required by the Act, shall, publish notice thereof
in a newspaper of general circulation in each place in which the Partnership
regularly conducts business (as determined in the sole and absolute discretion
of the General Partner).

 

Section 13.6  Cancellation of Certificate of Limited
Partnership.  Upon the
completion of the liquidation of the Partnership cash and property as provided
in Section 13.2 hereof, the Partnership shall be terminated, a certificate
of cancellation shall be filed with the State of Delaware, all qualifications
of the Partnership as a foreign limited partnership or association in
jurisdictions other than the State of Delaware shall be cancelled, and such
other actions as may be necessary to terminate the Partnership shall be taken.

 

Section 13.7  Reasonable Time for Winding-Up.  A reasonable time shall be allowed for the
orderly winding-up of the business and affairs of the Partnership and the
liquidation of its assets pursuant to Section 13.2 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.

 

ARTICLE XIV

PROCEDURES FOR ACTIONS AND CONSENTS OF
PARTNERS; AMENDMENTS; MEETINGS

 

Section 14.1  Procedures for Actions and Consents of
Partners.  The actions
requiring consent or approval of Limited Partners pursuant to this Agreement or
otherwise pursuant to applicable law, are subject to the procedures set forth
in this Article XIV.

 

Section 14.2  Amendments.

 

A.                                   Amendments
to this Agreement may be proposed by the General Partner or by a Majority in
Interest of the Limited Partners. Following such proposal, the General Partner
shall submit any proposed amendment to the Limited Partners. The General
Partner shall seek the written consent of the Limited Partners on the proposed
amendment or shall call a meeting to vote thereon and to transact any other
business that the General Partner may deem appropriate. For purposes of
obtaining a written consent, the General Partner may require a response within
a reasonable specified time, but not less than fifteen (15) days, and
failure to respond in such time period shall constitute a consent that is
consistent with the General Partner’s recommendation with respect to the
proposal; provided, however, that an action shall become effective at such time
as requisite consents are received even if prior to such specified time.

 

B.                                     The
General Partner shall not, without the prior Consent of the Limited Partners,
except as provided in Sections 4.2.A, 5.5, 6.2.B and 14.2.C hereof, amend,
modify or terminate this Agreement.

 

32

 

C.                                     Notwithstanding
Section 14.2.B hereof, the General Partner shall have the power, (i) with
the consent of Vornado Realty Trust only to amend the definition of “Advisor
Voting Direction Exclusions” and (ii) 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 or withdrawal of Partners or the
termination of the Partnership in accordance with this Agreement;

 

(3)                                  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;

 

(4)                                  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;

 

(5)                                  (a) to
reflect such changes as are reasonably necessary for the General Partner to
maintain or restore its status as a REIT or to satisfy the REIT Requirements;
or (b) to reflect the Transfer of all or any part of a Partnership
Interest between the General Partner and any Qualified REIT Subsidiary or
Taxable REIT Subsidiary;

 

(6)                                  to
modify the manner in which Capital Accounts are computed (but only to the
extent set forth in the definition of “Capital Account” or contemplated by the
Code or the Regulations); and

 

(7)                                  to
issue additional Partnership Interests in accordance with Section 4.2.

 

D.                                    Notwithstanding
Sections 14.2.B and 14.2.C hereof, this Agreement shall not be amended, and no
action may be taken by the General Partner, without the Consent of each Partner
adversely affected thereby, if such amendment or action would (i) convert
a Limited Partner Interest in the Partnership into a General Partner Interest
(except as a result of the General Partner acquiring such Partnership
Interest), (ii) modify the limited liability of a Limited Partner, (iii) alter
the rights of any Partner to receive the distributions to which such Partner is
entitled, pursuant to Article V or Section 13.2.A hereof, or alter
the allocations specified in Article VI hereof (except, in any case, as
permitted pursuant to Sections 4.2, 5.5, 6.2.B and 14.2.C hereof), (iv) alter
or modify the Redemption rights, Cash Amount, REIT Consideration, or Common
Shares Amount as set forth in Sections 8.6 and 11.2 hereof, or amend or modify
any related definitions, (v) permit the removal of the General Partner
without its consent or (vi) amend this Section 14.2.D; provided,
however, that the Consent of each Partner adversely affected shall not be
required for any amendment or action that affects all Partners holding the same
class or series of Partnership Units on a uniform or pro rata basis. Further,
no amendment may alter the restrictions on the General Partner’s authority set
forth elsewhere in this Section 14.2 without the Consent specified
therein. Any such amendment or action consented to by any Partner shall be
effective as to that Partner, notwithstanding the absence of such consent by
any other Partner.

 

Section 14.3  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 a Majority in
Interest of the Limited Partners. The call shall state the nature of the
business to be transacted. Notice of any such meeting shall be given to all
Partners not less than seven (7) days nor more than sixty (60) days
prior to the date of such meeting. Partners may vote in person or by proxy at
such meeting. Whenever the vote or Consent of Partners is permitted or required
under this Agreement, such vote or Consent may be given at a meeting of
Partners or may be given in accordance with the procedure prescribed in Section 14.3.B
hereof.

 

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 Percentage Interests of the Partners (or such
other percentage as is expressly required by this Agreement for the action in
question). Such consent may be in one instrument or in several instruments, and
shall have the same force and effect as a vote of a majority of the Percentage
Interests 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 it by proxy on
all matters in which a Limited Partner is entitled to participate, including
waiving notice of any meeting, or voting or participating at a meeting. Every
proxy must be signed by the Limited Partner or its attorney-in-fact. No proxy
shall be valid after the expiration of eleven (11) months from the date
thereof unless otherwise provided in the proxy (or there is receipt of a proxy
authorizing a later date). 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. The use of proxies will be governed in the same
manner as in the case of corporations organized under the General Corporation
Law of Delaware (including Section 212 thereof).

 

D.                                    Each
meeting of Partners shall be conducted by the General Partner or such other
Person as the General Partner may appoint pursuant to such rules for the
conduct of the meeting as the General Partner or such other Person deems
appropriate in its sole and absolute discretion. Without limitation, meetings
of Partners may be conducted in the same manner as meetings of the General
Partner’s shareholders and may be held at the same time as, and as part of, the
meetings of the General Partner’s shareholders.

 

33

 

ARTICLE XV

GENERAL PROVISIONS

 

Section 15.1  Addresses and Notice.  Any notice, demand, request or report
required or permitted to be given or made to a Partner or Assignee under this
Agreement shall be in writing and shall be deemed given or made when delivered
in person or when sent by first class United States mail or by other means of
written communication (including by telecopy, facsimile, or commercial courier
service) to the Partner or Assignee at the address set forth in the books and
records of the Partnership or such other address of which the Partner shall
notify the General Partner in writing.

 

Section 15.2  Titles and Captions.  All article or section titles or
captions in this Agreement are for convenience only. They shall not be deemed
part of this Agreement and in no way define, limit, extend or describe the
scope or intent of any provisions hereof. Except as specifically provided
otherwise, references to “Articles” or “Sections” are to Articles and Sections
of this Agreement.

 

Section 15.3  Pronouns and Plurals.  Whenever the context may require, any
pronouns used in this Agreement shall include the corresponding masculine,
feminine or neuter forms, and the singular form of nouns, pronouns and verbs
shall include the plural and vice versa.

 

Section 15.4  Further Action.  The parties shall execute and deliver all
documents, provide all information and take or refrain from taking action as
may be necessary or appropriate to achieve the purposes of this Agreement.

 

Section 15.5  Binding Effect.  This Agreement shall be binding upon and
inure to the benefit of the parties hereto and their heirs, executors,
administrators, successors, legal representatives and permitted assigns.

 

Section 15.6  Waiver.

 

A.  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.

 

B.  The restrictions, conditions
and other limitations on the rights and benefits of the Limited Partners
contained in this Agreement, and the duties, covenants and other requirements
of performance or notice by the Limited Partners, are for the benefit of the
Partnership and, except for an obligation to pay money to the Partnership, may
be waived or relinquished by the General Partner, in its sole and absolute discretion,
on behalf of the Partnership in one or more instances from time to time and at
any time; provided, however, that any such waiver or relinquishment may not be
made if it would have the effect of (i) creating liability for any other
Limited Partner, (ii) causing the Partnership to cease to qualify as a
limited partnership, (iii) reducing the amount of cash otherwise
distributable to the Limited Partners, (iv) resulting in the
classification of the Partnership as an association or publicly traded partnership
taxable as a corporation or (v) violating the Securities Act, the Exchange
Act or any state “blue sky” or other securities laws; provided, further, that
any waiver relating to compliance with the Ownership Limit or other
restrictions in the Articles of Incorporation shall be made and shall be
effective only as provided in the Articles of Incorporation.

 

Section 15.7  Counterparts.  This Agreement may be executed in
counterparts, all of which together shall constitute one agreement binding on
all the parties hereto, notwithstanding that all such parties are not
signatories to the original or the same counterpart. Each party shall become
bound by this Agreement immediately upon affixing its signature hereto.

 

Section 15.8  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. In the event of a
conflict between any provision of this Agreement and any non-mandatory provision
of the Act, the provisions of this Agreement shall control and take precedence.

 

Section 15.9  Entire Agreement.  This Agreement contains all of the
understandings and agreements between and among the Partners with respect to
the subject matter of this Agreement and the rights, interests and obligations
of the Partners with respect to the Partnership.

 

Section 15.10  Invalidity of Provisions.  If any provision of this Agreement is or
becomes invalid, illegal or unenforceable in any respect, the validity,
legality and enforceability of the remaining provisions contained herein shall
not be affected thereby.

 

Section 15.11  Limitation to Preserve REIT Status.  Notwithstanding anything else in this
Agreement, to the extent that the amount paid, credited, distributed or
reimbursed by the Partnership to any REIT Partner or its officers, directors,
employees or agents, whether as a reimbursement, fee, expense or indemnity (a “REIT
Payment”), would constitute gross income to the REIT Partner for purposes of
Code Section 856(c)(2) or Code Section 856(c)(3), then,
notwithstanding any other provision of this Agreement, the amount of such REIT
Payments, as selected by the General Partner in its discretion from among items
of potential distribution, reimbursement, fees, expenses and indemnities, shall
be reduced for any Partnership Year so that the REIT Payments, as so reduced,
for or with respect to such REIT Partner shall not exceed the lesser of:

 

34

 

(i)                                     an
amount equal to the excess, if any, of (a) four and nine-tenths percent
(4.9%) of the REIT Partner’s total gross income (but excluding the amount of
any REIT Payments) for the Partnership Year that is described in subsections (A) through
(H) of Code Section 856(c)(2) over (b) the amount of gross
income (within the meaning of Code Section 856(c)(2)) derived by the REIT
Partner from sources other than those described in subsections (A) through
(H) of Code Section 856(c)(2) (but not including the amount of
any REIT Payments); or

 

(ii)                                  an
amount equal to the excess, if any, of (a) twenty-four percent (24%) of
the REIT Partner’s total gross income (but excluding the amount of any REIT
Payments) for the Partnership Year that is described in subsections (A) through
(I) of Code Section 856(c)(3) over (b) the amount of gross
income (within the meaning of Code Section 856(c)(3)) derived by the REIT
Partner from sources other than those described in subsections (A) through
(I) of Code Section 856(c)(3) (but not including the amount of
any REIT Payments);

 

provided, however,
that REIT Payments in excess of the amounts set forth in clauses (i) and (ii) above
may be made if the General Partner, as a condition precedent, obtains an
opinion of tax counsel that the receipt of such excess amounts shall not
adversely affect the REIT Partner’s ability to qualify as a REIT. To the extent
that REIT Payments may not be made in a Partnership Year as a consequence of
the limitations set forth in this Section 15.11, such REIT Payments shall
carry over and shall be treated as arising in the following Partnership
Year(s). The purpose of the limitations contained in this Section 15.11 is
to prevent any REIT Partner from failing to qualify as a REIT under the Code by
reason of such REIT Partner’s share of items, including distributions,
reimbursements, fees, expenses or indemnities, receivable directly or
indirectly from the Partnership, and this Section 15.11 shall be
interpreted and applied to effectuate such purpose.

 

Section 15.12  No Partition.  No Partner nor any successor-in-interest to a
Partner shall have the right while this Agreement remains in effect to have any
property of the Partnership partitioned, or to file a complaint or
institute any proceeding at law or in equity to have such property of the
Partnership partitioned, and each Partner, on behalf of itself and its
successors and assigns hereby waives any such right. It is the intention of the
Partners that the rights of the parties hereto and their successors-in-interest
to Partnership property, as among themselves, shall be governed by the terms of
this Agreement, and that the rights of the Partners and their
successors-in-interest shall be subject to the limitations and restrictions as
set forth in this Agreement.

 

Section 15.13  No Third-Party Rights Created Hereby.  The provisions of this Agreement are solely
for the purpose of defining the interests of the Partners, inter se; and no
other person, firm or entity (i.e., a party who is not a signatory hereto or a
permitted successor to such signatory hereto) shall have any right, power,
title or interest by way of subrogation or otherwise, in and to the rights,
powers, title and provisions of this Agreement. No creditor or other third
party having dealings with the Partnership(other than as expressly set forth
herein with respect to Indemnitees) shall have the right to enforce the right
or obligation of any Partner to make Capital Contributions or loans to the
Partnership or to pursue any other right or remedy hereunder or at law or in equity.
None of the rights or obligations of the Partners herein set forth to make
Capital Contributions or loans to the Partnership shall be deemed an asset of
the Partnership for any purpose by any creditor or other third party, nor may
any such rights or obligations be sold, transferred or assigned by the
Partnership or pledged or encumbered by the Partnership to secure any debt or
other obligation of the Partnership or any of the Partners.

 

Section 15.14  No Rights as Stockholders.  Nothing contained in this Agreement shall be
construed as conferring upon the holders of Partnership Units any rights
whatsoever as stockholders of the General Partner, including without limitation
any right to receive dividends or other distributions made to stockholders of the
General Partner or to vote or to consent or receive notice as stockholders in
respect of any meeting of stockholders for the election of directors of the
General Partner or any other matter.

 

[The next page is the signature page.]

 

35

 

IN WITNESS WHEREOF, this Agreement has been executed as of the date
first written above.

 

	
   

  	
  WITHDRAWING GENERAL PARTNER:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  MLP GP LLC

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  Newkirk MLP Corp.

  
	
   

  	
   

  	
   

  	
  Managing Member

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  By:

  	
   

  	
  /s/ Peter Braverman

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  Peter Braverman

  
	
   

  	
   

  	
   

  	
   

  	
  Executive Vice President

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  GENERAL PARTNER:

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  NEWKIRK REALTY TRUST, INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/ Peter Braverman

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  Peter Braverman

  
	
   

  	
   

  	
   

  	
   

  	
  President

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  LIMITED PARTNER:

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  NEWKIRK REALTY TRUST, INC., on behalf of and as attorney in fact for
  each of the persons and entities currently reflected on the books and records
  of the Partnership as a Limited Partner in the Partnership

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/ Peter Braverman

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  Peter Braverman

  
	
   

  	
   

  	
   

  	
   

  	
  President

  
							

 

36

 

Exhibit A

 

NOTICE OF REDEMPTION

 

 

To:                              Newkirk Realty
Trust Inc. 

7 Bulfinch Place

Suite 500

PO Box 9507

Boston, Massachusetts 02114

 

The undersigned Limited Partner hereby irrevocably tenders for
Redemption Partnership Common Units in The Newkirk Master Limited Partnership
in accordance with the terms of the Amended and Restated Agreement of Limited
Partnership of The Newkirk Master Limited Partnership (the “Agreement”), and
the Redemption rights referred to therein. The undersigned Limited Partner:

 

(a)                                  undertakes
(i) to surrender such Partnership Common Units and any certificate
therefor at the closing of the Redemption and (ii) to furnish to the
General Partner, prior to the Specified Redemption Date, the documentation,
instruments and information required under Section 8.6.G of the Agreement;

 

(b)                                 directs
that the certified check representing the Cash Amount, or the Common Shares
Amount, as applicable, deliverable upon the closing of such Redemption be delivered
to the address specified below;

 

(c)                                  represents,
warrants, certifies and agrees that:

 

(i)                                     the
undersigned Limited Partner is a Qualifying Party,

 

(ii)                                  the
undersigned Limited Partner has, and at the closing of the Redemption will
have, good, marketable and unencumbered title to such Partnership Common Units,
free and clear of the rights or interests of any other person or entity,

 

(iii)                               the
undersigned Limited Partner has, and at the closing of the Redemption will
have, the full right, power and authority to tender and surrender such
Partnership Common Units as provided herein, and

 

(iv)                              the
undersigned Limited Partner has obtained the consent or approval of all persons
and entities, if any, having the right to consent to or approve such tender and
surrender; and

 

                                                (d)                                 acknowledges
that he will continue to own such Partnership Common Units until and unless
either (1) such Partnership Common Units are acquired by the General
Partner pursuant to Section 8.6.B of the Agreement or (2) such
redemption transaction closes.

 

                                                All
capitalized terms used herein and not otherwise defined shall have the same
meaning ascribed to them respectively in the Agreement.

 

Dated:

 

	
   

  	
  Name of Limited Partner:

  
	
   

  	
  (Signature of Limited Partner or Assignee)

  
	
   

  	
  (Street Address)

  
	
   

  	
  (City)             
  (State)              (Zip Code)

  
	
   

  	
  Signature Guaranteed by:

  
	
  Issue Check Payable to: 

  	
   

  
	
  Please insert social security or
  identifying number: 

  

 

A-1

 

Exhibit B

 

FORM OF UNIT CERTIFICATE

 

THE SECURITY EVIDENCED HEREBY HAS NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED(THE “ACT”), OR THE SECURITIES LAWS OF ANY
STATE AND MAY NOT BE SOLD, TRANSFERRED OR OTHERWISE DISPOSED OF IN THE
ABSENCE OF SUCH REGISTRATION, UNLESS THE TRANSFEROR DELIVERS TO THE PARTNERSHIP
AN OPINION OF COUNSEL SATISFACTORY TO THE PARTNERSHIP, IN FORM AND
SUBSTANCE SATISFACTORY TO THE PARTNERSHIP, TO THE EFFECT THAT THE PROPOSED
SALE, TRANSFER OR OTHER DISPOSITION MAY BE EFFECTED WITHOUT REGISTRATION
UNDER THE ACT AND UNDER APPLICABLE STATE SECURITIES OR “BLUE SKY” LAWS. IN
ADDITION, THE LIMITED PARTNERSHIP INTEREST EVIDENCED BY THIS CERTIFICATE MAY BE
SOLD OR OTHERWISE TRANSFERRED ONLY IN COMPLIANCE WITH THE RESTRICTIONS ON
TRANSFER SET FORTH IN THE AMENDED AND RESTATED AGREEMENT OF LIMITED PARTNERSHIP
OF THE NEWKIRK MASTER LIMITED PARTNERSHIP, DATED AS OF NOVEMBER 7, 200[5]
A COPY OF WHICH MAY BE OBTAINED FROM NEWKIRK REALTY TRUST, INC. AT
ITS PRINCIPAL EXECUTIVE OFFICE.

 

Certificate Number

 

THE NEWKIRK MASTER LIMITED PARTNERSHIP

FORMED UNDER THE LAWS OF THE STATE OF
DELAWARE

 

 

B-1Exhibit 10.4

 

REGISTRATION RIGHTS
AGREEMENT

 

This REGISTRATION RIGHTS
AGREEMENT is made and entered into as of November 7, 2005, between Newkirk
Realty Trust, Inc., a Maryland corporation (the “Company”), and Vornado
Realty L.P. (together with its successors and permitted assigns, “Shareholder”).

 

WHEREAS, Shareholder is the holder of limited
partnership units (“Partnership Units”) of The Newkirk Master Limited
Partnership (the “Operating Partnership”), a Delaware limited partnership of
which the Company is the general partner;

 

WHEREAS, such units may be redeemed for shares of
the Company’s common stock, on or after the first anniversary of the closing of
the initial public offering of the Company’s common stock; and

 

WHEREAS, the Company has agreed to grant to
Shareholder the registration rights described herein relating to the issuance
and the resale of the common stock issuable upon redemption of the Partnership
Units.

 

NOW, THEREFORE, in consideration of the mutual
covenants and agreements herein contained and other good and valid
consideration, the receipt and sufficiency of which are hereby acknowledged,
the parties to this Agreement hereby agree as follows:

 

1.            
CERTAIN DEFINITIONS.

 

In addition to the terms
defined elsewhere in this Agreement, the following terms shall have the
following meanings:

 

“Affiliate” of any Person
means any other Person that directly, or indirectly through one or more
intermediaries, controls, or is controlled by, or is under common control with,
such Person. The term “control” (including the terms “controlled by” and “under
common control with”) as used with respect to any Person means the possession,
directly or indirectly, of the power to direct or cause the direction of the
management and policies of such Person, whether through the ownership of voting
securities, by contract or otherwise.

 

“Agreement” means this
Registration Rights Agreement, including all amendments, modifications and
supplements and any exhibits or schedules to any of the foregoing, and shall refer
to this Registration Rights Agreement as the same may be in effect at the time
such reference becomes operative.

 

“Business Day” means any day
on which commercial banks are open for business in New York, New York and on
which the New York Stock Exchange or such other exchange as the Common Stock is
listed is open for trading.

 

 

“Common Stock” means common
stock, par value $.01 per share, of the Company.

 

“Conversion Shares” means
any of the shares of Common Stock issued or issuable upon redemption of the
Partnership Units.

 

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

 

“Holder” means any holder of
record of Registrable Common Stock (as defined below). For purposes of this
Agreement, the Company may deem and treat the registered holder of Registrable
Common Stock as the Holder and absolute owner thereof, and the Company shall
not be affected by any notice to the contrary.

 

“Operating Partnership”
means The Newkirk Master Limited Partnership, a Delaware limited partnership,
and any successor thereto.

 

“Other Registration Rights
Agreements” means that certain Registration Rights Agreement, dated November 7,
2005, by and between the Company and First Union Real Estate Equity and
Mortgage Investments, and that certain Registration Rights Agreement, dated November 7,
2005, by and between the Company and Apollo Real Estate Investment Fund III (“Apollo”).

 

“Partnership Units” means
partnership units of the Operating Partnership.

 

“Person” means any
individual, sole proprietorship, partnership, limited liability company, joint
venture, trust, incorporated organization, association, corporation,
institution, public benefit corporation, government (whether federal, state,
county, city, municipal or otherwise, including, without limitation, any
instrumentality, division, agency, body or department thereof) or any other
entity.

 

“Prospectus” means the
prospectus or prospectuses included in any Registration Statement, as amended
or supplemented by any prospectus supplement with respect to the terms of the
offering of any portion of the Registrable Common Stock covered by such
Registration Statement and by all other amendments and supplements to the
prospectus, including any preliminary prospectus or supplement, post-effective
amendments and all material incorporated by reference in such prospectus or
prospectuses.

 

“Redemption Date” shall mean
the date on which Partnership Units held by the Selling Stockholder are first
redeemable for shares of Common Stock.

 

“Registrable Common Stock”
means those Conversion Shares issued or issuable to the Shareholder upon
redemption of those 10,186,991 Partnership Units currently held by the
Shareholder, if the Shareholder were to receive or receives Conversion Shares
upon redemption of such Partnership Units, including any securities issued in
respect of such

 

2

 

securities by reason of or in connection with any
exchange for or replacement of such securities or any stock dividend, stock
distribution, stock split, purchase in any rights offering or in connection
with any combination of shares, recapitalization, merger or consolidation, or
any other equity securities issued pursuant to any other pro rata distribution
with respect to the Common Stock, until, in the case of any such securities,
the earliest to occur of (i) the date on which its resale has been
registered effectively pursuant to the Securities Act and disposed of in
accordance with the Registration Statement relating to it or (ii) the date
on which either it is distributed to the public pursuant to Rule 144 or is
saleable without restriction pursuant to Rule 144(k) promulgated by the
Commission pursuant to the Securities Act as confirmed in a written opinion of
counsel to the Company addressed to the Holder. All references herein to a “Holder”
or “Holder of Registrable Common Stock” shall include the holder or holders of
Partnership Units to the extent of the Conversion Shares then underlying such
Partnership Units. For purposes of determining the number of shares of
Registrable Common Stock held by a Holder and the number of shares of
Registrable Common Stock outstanding, for purposes of this Agreement (including
the definition of “Holder”) but not for any other purpose, any holder of record
of Partnership Units shall be deemed to be a Holder of the number of Conversion
Shares issuable upon conversion of such Partnership Units and all such
Conversion Shares shall be deemed to be outstanding shares of Registrable
Common Stock.

 

“Registration Statement” means
any registration statement of the Company which covers any of the Registrable
Common Stock pursuant to the provisions of this Agreement, including the
Prospectus, amendments and supplements to such Registration Statement,
including post-effective amendments, all exhibits and all materials
incorporated by reference in such Registration Statement.

 

“Rule 415” means Rule 415
promulgated by the SEC pursuant to the Securities Act, as such Rule may be
amended from time to time, or any similar Rule or regulation hereafter
adopted by the Commission as a replacement thereto having substantially the
same effect as such rule.

 

“SEC” means the Securities
and Exchange Commission.

 

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

 

“Shelf Registration Statement”
shall have the meaning set forth in Section 4 hereof.

 

“underwritten registration
or underwritten offering” means a registration in which securities of the
Company are sold to underwriters for reoffering to the public.

 

2.            
AUTOMATIC AND DEMAND
REGISTRATIONS.

 

(a)          
Issuance Registration.  To the extent permitted by applicable
rules and regulations promulgated by the SEC, the Company shall file a
registration statement (the

 

3

 

“Initial Registration Statement”) with the SEC on
the appropriate form for a continuous offering to be made pursuant to Rule 415
providing for the delivery to the Holders of Common Stock issued pursuant to
such registration statement upon the tendering of Class A Units for
redemption or exchange.  The Company will use commercially reasonable best
efforts to effect (at the earliest possible date) the registration, under the
Securities Act, of such Common Stock.  If such registration statement
ceases to be effective for any reason at any time prior to the delivery of all
Common Stock registered thereunder, then the Company shall use its commercially
reasonable efforts to obtain the prompt withdrawal of any order suspending the
effectiveness thereof.  The Company shall be responsible for all
Registration Expenses in connection with any registration pursuant to this Section 2(a). 
The Company shall promptly supplement and amend such registration statement and
the prospectus included therein if required by the rules, regulations or
instructions applicable to the registration statement used for such
registration statement or by the Securities Act.  Any registration
statement filed pursuant to this Section 2(a) shall not eliminate any
right to registration provided under other sections of this Agreement.

 

(b)          
Right to Request Registration.  Any time after the Redemption Date, a
Holder may request pursuant to this Section 2(b) registration under
the Securities Act of the resale of all or part of the Shareholder’s Registrable
Common Stock (“Demand Registration”); provided, that if the Company is eligible
to use a Shelf Registration Statement (as defined in Section 4 hereof),
the Holder shall be required to request that the Company register its
Registrable Common Stock on a Shelf Registration Statement rather than
requesting Demand Registrations and shall not be entitled to request any Demand
Registrations while such Shelf Registration is effective and available for
registration of the Registrable Common Stock.

 

(c)          
Number of Demand
Registrations.  Subject
to the provisions of Section 2(b), the Shareholder shall be entitled to
request an aggregate of two Demand Registrations per year, and shall not be
entitled to request that less than 25% of the Registrable Securities be
included in any Demand Registration.

 

(d)          
Restrictions on Demand
Registrations.  The
Company shall not be obligated to effect any Demand Registration within six
months after the effective date of a previous Demand Registration, a previous
Shelf Registration (as hereinafter defined) or a previous registration under
which the Shareholder had piggyback rights pursuant to Section 3 hereof
wherein the Shareholder was permitted to register, and sold, at least 25% of
the shares of Registrable Common Stock requested to be included therein.
 In no event shall the Company be obligated to effect more than two (2) Demand
Registrations hereunder or under the Other Registration Rights Agreements in
any single twelve (12) month period, with the first such period measured from
the date of the first Demand Registration and ending on the same date twelve
months following such Demand Registration, whether or not a Business Day; provided, however, that if (i) the
Company is requested to effect a Demand Registration under this Agreement which
is not otherwise designated by the Shareholder to be a “shelf” registration
statement and (ii) is also requested to effect one or more Demand
Registrations (as such term is defined in each of the Other Registration Rights
Agreements) pursuant to the Other Registration Rights

 

4

 

Agreements within any eighteen (18) month period
during which the Corporation is eligible to file a registration statement on Form S-3
or on a successor form, then the Company shall only be obligated with respect
to such latter registration statement during such period to register that
percentage of the Registrable Common Stock equal to the product obtained by
dividing (i) the number of shares of Registrable Common Stock held by the
Shareholder by (ii) the total number of shares of Registrable Common Stock
covered under this Agreement and all of the Other Registration Rights
Agreements.  The Company may (i) postpone for up to ninety (90) days
the filing or the effectiveness of a Registration Statement for a Demand
Registration if, based on the good faith judgment of the Company’s board of
directors, such postponement or withdrawal is necessary in order to avoid
premature disclosure of a matter the board has determined would be reasonably
expected to result in a material adverse effect to the Company’s business,
financial condition, results of operations or prospects or the loss of a
material opportunity to be disclosed at such time or (ii) postpone the filing
of a Demand Registration in the event the Company shall be required to prepare
audited financial statements as of a date other than its fiscal year end
(unless the stockholders requesting such registration agree to pay the expenses
of such an audit); provided, however, that in no event shall the Company
withdraw a Registration Statement under clause (i) after such Registration
Statement has been declared effective; and provided, further, however, that in
any of the events described in clause (i) or (ii) above, the
Shareholder shall be entitled to withdraw such request and, if such request is
withdrawn, such Demand Registration shall not count as one of the permitted
Demand Registrations. The Company shall provide written notice to the
Shareholder of (x) any postponement or withdrawal of the filing or
effectiveness of a Registration Statement pursuant to this Section 2(e),
(y) the Company’s decision to file or seek effectiveness of such Registration
Statement following such withdrawal or postponement and (z) the effectiveness
of such Registration Statement. The Company may defer the filing of a
particular Registration Statement pursuant to this Section 2(d) only
once.

 

(f)           
Selection of Underwriters.  If any of the Registrable Common
Stock covered by a Demand Registration or a Shelf Registration pursuant to Section 4
hereof is to be sold in an underwritten offering, the Shareholder, if it is the
Holder who instructed the Demand Registration or Shelf Registration, or in the
case of a transaction representing a “shelf takedown”, the Holder initiating
such transaction, shall have the right to select the managing underwriter(s) to
administer the offering subject to the approval of the Company, which will not
be unreasonably withheld; provided,
however, that the Company shall have the right to select the
managing underwriter, subject to the approval of the Holder, which shall not be
unreasonably withheld, in the event of any underwritten offering pursuant to a
Demand Registration or “shelf takedown” where the Company is bearing the
expenses of such Demand Registration or “shelf takedown”.

 

(g)          
Effective Period of Demand
Registrations.  After
any Demand Registration filed pursuant to this Agreement has become effective,
the Company shall use its best efforts to keep such Demand Registration
effective until such time as the Registrable Common Stock registered thereon
has been disposed of pursuant thereto.  If the Company shall withdraw any
Demand Registration pursuant to subsection (e) of this

 

5

 

Section 2 before any of the Shareholders
Registrable Common Shares covered by the withdrawn Demand Registration are
unsold (a “Withdrawn Demand Registration”), the Shareholder shall be entitled
to a replacement Demand Registration that (subject to the provisions of this Article 2)
the Company shall use its best efforts to keep effective until such time as the
Registrable Common Stock registered thereon has been disposed of pursuant
thereto.  Such additional Demand Registration otherwise shall be subject
to all of the provisions of this Agreement.

 

(h)          
Other
Company Stock.  In no event shall the Company agree to register
Common Stock or any other securities for issuance by the Company or for resale
by any Persons other than the Shareholder in any registration statement filed
pursuant to Section 2(b), without the express written consent of Vornado
Realty L.P., which consent shall be entirely discretionary.

 

(i)           
Conversion to Form S-3.  In the event that at any time a
Demand Registration Statement is in effect and the Company is eligible to
register on Form S-3 or any successor thereto then available, the Company
shall as promptly as reasonably practicable convert such registration statement
to Form S-3 or such successor form.

 

6

 

3.            
PIGGYBACK REGISTRATIONS.

 

(a)          
Right to Piggyback.  At any time after the Redemption
Date, whenever the Company proposes to register any of its common equity
securities under the Securities Act (other than the Initial Registration
Statement, or a registration statement on Form S-8 or on Form S-4 or
any similar successor forms thereto), whether for its own account or for the
account of one or more stockholders of the Company, and the registration form
to be used may be used for any registration of Registrable Common Stock (a “Piggyback
Registration”), the Company shall give prompt written notice (in any event
within 10 business days after its receipt of notice of any exercise of other
demand registration rights) to the Holder of its intention to effect such a
registration and, subject to Sections 3(b) and 3(c), shall include in such
registration all Registrable Common Stock of the Shareholder with respect to
which the Company has received written requests for inclusion therein within 20
days after the receipt of the Company’s notice. The Company may postpone or
withdraw the filing or the effectiveness of a Piggyback Registration at any
time in its sole discretion.

 

(b)          
Priority on Primary
Registrations.  If a
Piggyback Registration is an underwritten primary registration on behalf of the
Company, and the managing underwriters advise the Company in writing that in
their opinion the number of securities requested to be included in such
registration exceeds the number that can be sold in such offering and/or that
the number of shares of Registrable Common Stock proposed to be included in any
such registration would adversely affect the price per share of the Company’s
equity securities to be sold in such offering, the underwriting shall be
allocated among the Company and all Holders pro rata on the basis of the Common
Stock and Registrable Common Stock offered for such registration by the Company
and each Holder, respectively, electing to participate in such registration.

 

(c)          
Priority on Secondary
Registrations.  If a
Piggyback Registration is an underwritten secondary registration on behalf of a
holder of the Company’s securities other than Registrable Common Stock (“Non-Holder
Securities”), and the managing underwriters advise the Company in writing that
in their opinion the number of securities requested to be included in such
registration exceeds the number that can be sold in such offering and/or that
the number of shares of Registrable Common Stock proposed to be included in any
such registration would adversely affect the price per share of the Company’s
equity securities to be sold in such offering, the underwriting shall be
allocated among the holders of Non-Holder Securities and all Holders pro rata
on the basis of the Non-Holder Securities and Registrable Common Stock offered
for such registration by the holder of Non-Holder Securities and each Holder,
respectively, electing to participate in such registration.

 

(d)          
Selection of Underwriters.  If any Piggyback Registration is an
underwritten primary offering, the Company shall have the right to select the
managing underwriter or underwriters to administer any such offering.

 

7

 

(e)          
Other Registrations.  If the Company has previously filed a
Registration Statement with respect to shares of Registrable Common Stock
pursuant to Sections 2 (other than Section 2(a)) or 4 hereof or pursuant
to this Section 3, and if such previous registration has not been
withdrawn or abandoned, the Company shall not be obligated to cause to become
effective any other registration of such same shares of Registrable Common
Stock or any of its securities under the Securities Act, whether on its own
behalf or at the request of any holder or holders of such securities.

 

4.            
SHELF REGISTRATIONS.

 

(a)          
After the Redemption Date, at
the Holder’s election (such election to be made if the Holder may not elect to
exercise any Demand Registrations, subject to Section 4(b) below), if
at any time that the Company is eligible to use Form S-3 or any successor
thereto then available to the Company providing for the resale pursuant to Rule 415
from time to time by the Shareholder of any and all Registrable Common Stock
held by the Shareholder (a “Shelf Registration Statement”) the Shareholder
requests that the Company file a Shelf Registration Statement for a public
offering of all or any portion of the Registrable Common Stock held by the
Holder, then the Company shall use its best efforts to register under the
Securities Act pursuant to a Shelf Registration Statement, for public sale in
accordance with the method of disposition specified in such notice, the number
of shares of Registrable Common Stock specified in such notice. Whenever the
Company is required by this Section 4 to use its best efforts to effect
the registration of Registrable Common Stock, each of the procedures and
requirements of Section 2 (including but not limited to the requirement
that the Company notify all Holders from whom notice has not been received and
provide them with the opportunity to participate in the offering) shall apply
to such registration. The Company shall use its commercially reasonable efforts
to keep the Shelf Registration Statement effective until the earliest to occur
of the date on which all of the Registrable Common Stock ceases to be
Registrable Common Stock.

 

(b)          
If at any time the Company is
not eligible to use a Shelf Registration Statement, a Holder may during such
time exercise Demand Registration Rights, regardless of any previous exercise
of their rights under Section 4(a).

 

(c)          
A filing pursuant to this Section 4
shall not relieve the Company of any obligation to effect registration of
Registrable Common Stock pursuant to Section 2 or Section 3 hereof,
except as provided therein.

 

5.            
REGISTRATION PROCEDURES.

 

Whenever the Holder requests
that any of its Registrable Common Stock be registered pursuant to this
Agreement, the Company shall use its best efforts to effect the registration
and the sale of such Registrable Common Stock in accordance with the intended
methods of disposition thereof, and pursuant thereto the Company shall as
expeditiously as possible:

 

8

 

(a)          
prepare and file with the SEC a
Registration Statement with respect to such Registrable Common Stock and use
its best efforts to cause such Registration Statement to become effective as
soon as practicable thereafter; and before filing a Registration Statement or
Prospectus or any amendments or supplements thereto, furnish to the Shareholder
and the underwriter or underwriters, if any, copies of all such documents
proposed to be filed, including documents incorporated by reference in the
Prospectus and, if requested by the Shareholder, the exhibits incorporated by
reference, and the Shareholder shall have the opportunity to object to any information
pertaining to the Shareholder that is contained therein and the Company will
make the corrections reasonably requested by the Shareholder with respect to
such information prior to filing any Registration Statement or amendment
thereto or any Prospectus or any supplement thereto;

 

(b)          
prepare and file with the SEC
such amendments and supplements to such Registration Statement and the
Prospectus used in connection therewith as may be necessary to keep such
Registration Statement effective for such period as is necessary to complete
the distribution of the securities covered by such Registration Statement and
comply with the provisions of the Securities Act with respect to the
disposition of all securities covered by such Registration Statement during
such period in accordance with the intended methods of disposition by the
sellers thereof set forth in such Registration Statement;

 

(c)          
furnish to each seller of
Registrable Common Stock such number of copies of such Registration Statement,
each amendment and supplement thereto, the Prospectus included in such
Registration Statement (including each preliminary Prospectus) and such other
documents as such seller may reasonably request in order to facilitate the
disposition of the Registrable Common Stock owned by such seller;

 

(d)          
use its commercially reasonable
efforts to become and remain eligible to file registration statements on Form S-3
or any successor thereto then available, and if applicable to utilize “well
known seasoned issuer status”, and to register or qualify such Registrable
Common Stock under such other securities or blue sky laws of such jurisdictions
as any seller reasonably requests and do any and all other acts and things
which may be reasonably necessary or advisable to enable such seller to
consummate the disposition in such jurisdictions of the Registrable Common
Stock owned by such seller (provided, that the Company will not be required to (i) qualify
generally to do business in any jurisdiction where it would not otherwise be
required to qualify but for this subparagraph (d), (ii) subject itself to
taxation in any such jurisdiction or (iii) consent to general service of
process in any such jurisdiction);

 

(e)          
notify each seller of such
Registrable Common Stock, at any time when a Prospectus relating thereto is
required to be delivered under the Securities Act, of the occurrence of any
event as a result of which the Prospectus included in such Registration
Statement contains an untrue statement of a material fact or omits any fact
necessary to make the statements therein not misleading, and prepare a
supplement or amendment to such Prospectus so that such Prospectus shall not
contain an untrue statement of a

 

9

 

material fact or omit to state any material fact
necessary to make the statements therein not misleading;

 

(f)           
in the case of an underwritten
offering, enter into such customary agreements together with the Operating
Partnership (including underwriting agreements in customary form) and take all
such other actions as the underwriters, if any, reasonably request in order to
expedite or facilitate the disposition of such Registrable Common Stock
(including, without limitation, effecting a stock split or a combination of
shares and making members of senior management of the Company available to
participate in, and cause them to cooperate with the underwriters in connection
with, “road-show” and other customary marketing activities (including
one-on-one meetings with prospective purchasers of the Registrable Common
Stock)) and cause to be delivered to the underwriters and the sellers, if any,
opinions of counsel to the Company and the Operating Partnership in customary
form, as well as closing certificates and other customary documents covering
such matters as are customarily covered by opinions for and certificates in an
underwritten public offering as the underwriters may request and addressed to
the underwriters and the sellers; provided,
however,  that notwithstanding anything else contained in
this Agreement, the Company shall not be obligated to effect an aggregate of
more than three underwritten offerings or participate in more than two “road
shows” (which, for the purposes of this sentence shall not include
presentations that involve only telephonic or internet-based marketing and do
not require any travel by the Company’s management) in any twenty-four (24)
month period, and not more than one underwritten offering every six (6) months
under this Agreement or under the Other Registration Rights Agreements; and provided further, however, that if
an underwritten public offering (including a public sale to a registered
broker-dealer) is effected at the request of Apollo or First Union under the
Other Registration Rights Agreements, the Shareholder shall have the right to
participate in such offering, and Apollo shall have the right to participate in
any underwritten public offering effected at the request of the Shareholder
under this Agreement; and if the managing underwriters or broker-dealers of any
such underwritten offering advise Apollo, First Union and the Holder in writing
that in their opinion the number of shares of Registrable Common Stock proposed
to be included in any such offering exceeds the number of securities that can
be sold in such offering and/or that the number of shares of Registrable Common
Stock proposed to be included in any such offering would materially adversely
affect the price per share of the Company’s equity securities to be sold in
such offering, Apollo, First Union and the Holder shall include in such
offering only the number of shares of Registrable Common Stock that, in the
opinion of such managing underwriters (or registered broker-dealer), can be
sold.  If the number of shares that can be sold exceeds the number of
shares of Registrable Common Stock proposed to be sold, such excess shall be
allocated pro rata among the holders of Common Stock desiring to participate in
such offering based on the amount of such Common Stock initially requested to
be registered by such holders or as such holders may otherwise agree.

 

Only Apollo, the
Shareholder, First Union, and their affiliates holding Registrable Common Stock
shall be entitled to participate in any public underwritten offerings pursuant
to this Agreement with respect to Registrable Common Stock (which for

 

10

 

purposes of this paragraph (f) includes
Registrable Common Stock as defined in the Other Registration Rights
Agreements)

 

If any of Apollo, the
Shareholder or First Union determines not to participate in an underwritten
offering with respect to which it is entitled hereunder to participate in
hereunder or under the Other Registration Rights Agreements, then the
non-participating party shall agree to such lockup period with respect to its
Common Stock as the managing underwriters or broker dealer deems reasonably
necessary for purposes of effecting the public offering.

 

(g)          
make available, for inspection
by any seller of Registrable Common Stock, any underwriter participating in any
disposition pursuant to such Registration Statement, and any attorney,
accountant or other agent retained by any such seller or underwriter, all
financial and other records, pertinent corporate documents and properties of
the Company, and cause the Company’s officers, directors, employees and
independent accountants to supply all information reasonably requested by any
such seller, underwriter, attorney, accountant or agent in connection with such
Registration Statement;

 

(h)          
to use its best efforts to cause
all such Registrable Common Stock to be listed on each securities exchange on
which securities of the same class issued by the Company are then listed or, if
no such similar securities are then listed, on Nasdaq or a national securities
exchange selected by the Company;

 

(i)           
provide a transfer agent and
registrar for all such Registrable Common Stock not later than the effective
date of such Registration Statement;

 

(j)           
if requested, cause to be
delivered, immediately prior to the effectiveness of the Registration Statement
(and, in the case of an underwritten offering, at the time of delivery of any
Registrable Common Stock sold pursuant thereto), letters from the Company’s
independent certified public accountants addressed to the Shareholder (unless
the Shareholder does not provide to such accountants the appropriate
representation letter required by rules governing the accounting profession)
and each underwriter, if any, stating that such accountants are independent
public accountants within the meaning of the Securities Act and the applicable rules and
regulations adopted by the SEC thereunder, and otherwise in customary form and
covering such financial and accounting matters as are customarily covered by
letters of the independent certified public accountants delivered in connection
with primary or secondary underwritten public offerings, as the case may be;

 

(k)          
make generally available to its
stockholders a consolidated earnings statement (which need not be audited) for
the 12 months beginning after the effective date of a Registration Statement as
soon as reasonably practicable after the end of such period, which earnings statement
shall satisfy the requirements of an earning statement under Section 11(a) of
the Securities Act;

 

11

 

(l)           
promptly notify the Shareholder
and the underwriter or underwriters, if any:

 

(i)           
when the Registration Statement,
any pre-effective amendment, the Prospectus or any Prospectus supplement or
post-effective amendment to the Registration Statement has been filed and, with
respect to the Registration Statement or any post-effective amendment, when the
same has become effective;

 

(ii)          
of any SEC comments applicable
to the Registration Statement or Prospectus or written request from the SEC for
any amendments or supplements to the Registration Statement or Prospectus;

 

(iii)         
of the notification to the
Company by the SEC of its initiation of any proceeding with respect to the
issuance by the SEC of any stop order suspending the effectiveness of the
Registration Statement;

 

(iv)         
of the receipt by the Company of
any notification with respect to the suspension of the qualification of any
Registrable Common Stock for sale under the applicable securities or blue sky
laws of any jurisdiction;

 

(v)          
of the existence of, any fact or
the happening of any event that makes any statement of material fact made in
any registration statement filed pursuant to this Agreement or related
prospectus untrue in any material respect, or that requires the making of any
changes in such registration statement so that, in the case of the registration
statement, it will not contain any untrue statement of a material fact or omit
to state any material fact required to be stated therein or necessary to make
the statements therein not misleading and that, in the case of the prospectus,
such prospectus will not contain any untrue statement of a material fact or
omit to state any material fact required to be stated therein or necessary to
make the statements therein, in light of the circumstances under which they
were made, not misleading; and

 

(vi)         
of the determination by the
Company that a post-effective amendment to a registration statement filed
pursuant to this Agreement will be filed with the SEC.

 

The Company shall file all
reports required to be filed by it under the Securities Act and the Exchange
Act and the rules and regulations adopted by the SEC thereunder, and take
such further action as the Shareholder may reasonably request, all to the
extent required to enable the Shareholder to be eligible to sell Registrable Common
Stock pursuant to Rule 144 (or any similar rule then in effect).

 

In connection with any
registration pursuant to which any of a Holder’s Registrable Common Stock is to
be sold, the Company may require that the Holder furnish to the Company any
other information regarding the Holder and the distribution of such securities
as the Company may from time to time reasonably request in writing.

 

12

 

The Holders agree by having
their stock treated as Registrable Common Stock hereunder that, upon notice of
the happening of any event described in l(v) above (a “Suspension Notice”),
the Holders will forthwith discontinue disposition of Registrable Common Stock
until the Shareholder is advised in writing by the Company that the use of the
Prospectus may be resumed and is furnished with a supplemented or amended
Prospectus as contemplated by Section 5(e) hereof, and, if so
directed by the Company, the Holders will deliver to the Company (at the
Company’s expense) all copies, other than permanent file copies then in the
Holder’s possession, of the Prospectus covering such Registrable Common Stock
current at the time of receipt of such notice; provided, however, that such
postponement of sales of Registrable Common Stock shall not exceed ninety (90)
days in the aggregate in any one year; provided, further, however, that not
later than the last day of such ninety (90) day period or such shorter period
as may apply, the Company shall have provided to the Holders a supplemented or
amended Prospectus as contemplated by Section 5(e) hereof.  If
the Company shall give any notice to suspend the disposition of Registrable
Common Stock pursuant to a Prospectus, the Company shall extend the period of
time during which the Company is required to maintain the Registration
Statement effective pursuant to this Agreement by the number of days during the
period from and including the date of the giving of such notice to and
including the date the Shareholder either is advised by the Company that the
use of the Prospectus may be resumed or receives the copies of the supplemented
or amended Prospectus contemplated by Section 5(e). In any event, the
Company shall not be entitled to deliver more than one (1) Suspension
Notice in any one year.

 

13

 

6.            
REGISTRATION EXPENSES.

 

(a)          
All expenses incident to the
Company’s performance of or compliance with this Agreement, including, without
limitation, all registration and filing fees, , underwriting discounts and
commissions, NASD fees, fees and expenses of compliance with securities or blue
sky laws, listing application fees, printing expenses, transfer agent’s and
registrar’s fees, cost of distributing Prospectuses in preliminary and final
form as well as any supplements thereto, and fees and disbursements of counsel
for the Company and all independent certified public accountants and other
Persons retained by the Company (all such expenses being herein called “Registration
Expenses”), shall be borne by the Shareholder; provided, however, that the Company shall bear the
expenses, exclusive of underwriting discounts and commissions, incident to the
Initial Registration Statement, one Registration Statement filed pursuant to Section 4(a),
including up to three “shelf takedowns” or offerings pursuant to Rule 430A
under the Securities Act, if applicable, and up to three Demand Registrations
pursuant to Section 2(b), but in no event shall the Company be obligated
to bear the expense of more than three offerings (exclusive of the expenses
incident to the Initial Registration Statement and one Registration Statement
filed pursuant to Section 4(a)) pursuant to this Section 6(a) (or
four offerings if the Shareholder is unable, through its commercially
reasonable efforts, to dispose of all its Registrable Common Stock after such
three offerings).  The Company shall pay its internal expenses (including,
without limitation, all salaries and expenses of its officers and employees
performing legal or accounting duties), and the expense of any annual audit or
quarterly review, and the expense of any liability insurance.

 

7.            
INDEMNIFICATION.

 

(a)          
The Company and the Operating
Partnership shall indemnify, to the fullest extent permitted by law, each
Holder, its officers, directors, trustees, partners, and Affiliates and each
Person who controls such Holder (within the meaning of the Securities Act)
against all losses, claims, damages, expenses and liabilities, joint or
several, actions or proceedings, to which each such indemnified party may
become subject under the Securities Act or otherwise, insofar as such losses,
claims, damages, expenses or liabilities (or actions or proceedings in respect
thereof) arise out of or based upon any untrue or alleged untrue statement of
material fact contained in any Registration Statement, Prospectus or any
amendment thereof or supplement thereto or any omission or alleged omission of
a material fact required to be stated therein or necessary to make the
statements therein not misleading or any violation or alleged violation by the
Company of the Securities Act, the Exchange Act or applicable “blue sky” laws
and the Company and the Operating Partnership will reimburse each such Holder
and each such director, trustee, officer, partner, agent, employee or
affiliate, underwriter and controlling person for any legal or other expenses
reasonably incurred by them in connection with investigating or defending any
such loss, claim, damage, expense, liability action or proceeding, except
insofar as the same are made in reliance and in conformity with information
relating to the Shareholder furnished in writing to the Company by the
Shareholder expressly for use therein or caused by the Shareholder’s failure to
deliver to the Shareholder’s immediate purchaser a copy of the Registration
Statement or Prospectus

 

14

 

or any amendments or supplements thereto (if the
same was required by applicable law to be so delivered) after the Company has
furnished the Shareholder with a sufficient number of copies of the same. In
connection with an underwritten offering, the Company shall indemnify such
underwriters, their officers and directors and each Person who controls such underwriters
(within the meaning of the Securities Act) to the same extent as provided above
with respect to the indemnification of the Shareholder.

 

(b)          
In connection with any
Registration Statement in which the Shareholder is participating, the Shareholder
shall furnish to the Company in writing such information and affidavits as the
Company reasonably requests for use in connection with any such Registration
Statement or Prospectus and, shall indemnify, to the fullest extent permitted
by law, the Company, its officers, directors, Affiliates, and each Person who
controls the Company (within the meaning of the Securities Act) against all
losses, claims, damages, expenses and liabilities joint or several, actions or
proceedings, to which each such indemnified party may become subject under the
Securities Act or otherwise, insofar as such losses, claims, damages, expenses
or liabilities (or actions or proceedings in respect thereof) arise out of or
based upon any untrue or alleged untrue statement of material fact contained in
the Registration Statement, Prospectus or preliminary Prospectus or any
amendment thereof or supplement thereto or any omission or alleged omission of
a material fact required to be stated therein or necessary to make the statements
therein not misleading, and the Holder will reimburse each of the Company and
the Operating Partnership and each such director, trustee, officer, partner,
agent, employee or affiliate, underwriter and controlling person for any legal
or other expenses reasonably incurred by them in connection with investigating
or defending any such loss, claim, damage, expense, liability action or
proceeding, but only to the extent that the same are made in reliance and in
conformity with information relating to the Shareholder furnished in writing to
the Company by the Shareholder expressly for use therein or caused by the
Shareholder’s failure to deliver to the Shareholder’s immediate purchaser a
copy of the Registration Statement or Prospectus or any amendments or supplements
thereto (if the same was required by applicable law to be so delivered) after
the Company has furnished the Shareholder with a sufficient number of copies of
the same.

 

(c)          
Any Person entitled to
indemnification hereunder shall (i) give prompt written notice to the
indemnifying party of any claim with respect to which it seeks indemnification
and (ii) unless in such indemnified party’s reasonable judgment a conflict
of interest between such indemnified and indemnifying parties may exist with
respect to such claim, permit such indemnifying party to assume the defense of
such claim with counsel reasonably satisfactory to the indemnified party. If
such defense is assumed, the indemnifying party shall not be subject to any
liability for any settlement made by the indemnified party without its consent
(but such consent will not be unreasonably withheld). An indemnifying party who
is not entitled to, or elects not to, assume the defense of a claim shall not
be obligated to pay the fees and expenses of more than one counsel for all
parties indemnified by such indemnifying party with respect to such claim,
unless in the reasonable judgment of any indemnified party there may be one or
more legal or equitable defenses available to such indemnified party which are
in addition to or may conflict with those available to another indemnified
party with respect to such claim.

 

15

 

Failure to give prompt written notice shall not
release the indemnifying party from its obligations hereunder.

 

(d)          
The indemnification provided for
under this Agreement shall remain in full force and effect regardless of any
investigation made by or on behalf of the indemnified party or any officer,
director or controlling Person of such indemnified party and shall survive the
transfer of securities.

 

(e)          
If the indemnification provided
for in or pursuant to this Section 7 is due in accordance with the terms
hereof, but is held by a court to be unavailable or unenforceable in respect of
any losses, claims, damages, liabilities or expenses referred to herein, then
each applicable indemnifying party, in lieu of indemnifying such indemnified
party, shall contribute to the amount paid or payable by such indemnified Person
as a result of such losses, claims, damages, liabilities or expenses in such
proportion as is appropriate to reflect the relative fault of the indemnifying
party on the one hand and of the indemnified party on the other in connection
with the statements or omissions which result in such losses, claims, damages,
liabilities or expenses as well as any other relevant equitable considerations.
The relative fault of the indemnifying party on the one hand and of the
indemnified Person on the other shall be determined by reference to, among
other things, whether the untrue or alleged untrue statement of a material fact
or the omission or alleged omission to state a material fact relates to
information supplied by the indemnifying party or by the indemnified party, and
by such party’s relative intent, knowledge, access to information and
opportunity to correct or prevent such statement or omission. In no event shall
the liability of any selling Holder be greater in amount than the amount of net
proceeds received by such Holder upon such sale or the amount for which such
indemnifying party would have been obligated to pay by way of indemnification
if the indemnification provided for under Section 7(a) or 7(b) hereof
had been available under the circumstances.

 

(f)           
In the event
that advances are not made pursuant to this Section 8 or payment has not
otherwise been timely made, each indemnified party shall be entitled to seek a
final adjudication in an appropriate court of competent jurisdiction of the
entitlement of the indemnified party to indemnification or advances hereunder.

 

The Company, the Operating Partnership and the Holders
agree that they shall be precluded from asserting that the procedures and
presumptions of this Section 7 are not valid, binding and
enforceable.  The Company, the Operating Partnership and the Holders
further agree to stipulate in any such court that the Company, the Operating
Partnership, and the Holders are bound by all the provisions of this Section 7
and are precluded from making any assertion to the contrary.

 

To the extent deemed appropriate by the court, interest
shall be paid by the indemnifying party to the indemnified party at a
reasonable interest rate for amounts which the indemnifying party has not
timely paid as the result of its indemnification and contribution obligations
hereunder.

 

16

 

In the event that any indemnified
party is a party to or intervenes in any proceeding to which the validity or
enforceability of this Section 7 is at issue or seeks an adjudication to
enforce the rights of any indemnified party under, or to recover damages for
breach of, this Section 7, the indemnified party, if the indemnified party
prevails in whole in such action, shall be entitled to recover from the
indemnifying party and shall be indemnified by the indemnifying party against,
any expenses incurred by the indemnified party.  If it is determined that
the indemnified party is entitled to indemnification for part (but not all) of
the indemnification so requested, expenses incurred in seeking enforcement of
such partial indemnification shall be reasonably prorated among the claims,
issues or matters for which the indemnified party is entitled to
indemnification and for such claims, issues or matters for which the
indemnified party is not so entitled.

 

The indemnity agreements
contained in this Section 7 shall be in addition to any other rights (to
indemnification, contribution or otherwise) which any indemnified party may
have pursuant to law or contract and shall remain operative and in full force
and effect regardless of any investigation made or omitted by or on behalf of
any indemnified party and shall survive the transfer of any Registrable Common
Stock by any Holder.

 

8.            
PARTICIPATION IN UNDERWRITTEN
REGISTRATIONS.

 

No Person may participate in
any registration hereunder that is underwritten unless such Person (a) agrees
to sell such Person’s securities on the basis provided in any underwriting
arrangements approved by the Person or Persons entitled hereunder to approve
such arrangements and (b) completes and executes all questionnaires,
powers of attorney, indemnities, underwriting agreements and other documents
required under the terms of such underwriting arrangements.

 

9.            
RULE 144.

 

The Company covenants that
it will file the reports required to be filed by it under the Securities Act
and the Exchange Act and the rules and regulations adopted by the SEC
thereunder, and it will take such further action as the Shareholder may
reasonably request to make available adequate current public information with
respect to the Company meeting the current public information requirements of Rule 144(c) under
the Securities Act (to the extent such information is available), to the extent
required to enable the Shareholder to sell Registrable Common Stock without
registration under the Securities Act within the limitation of the exemptions
provided by (i) Rule 144 under the Securities Act, as such Rule may
be amended from time to time, or (ii) any similar rule or regulation
hereafter adopted by the SEC. Upon the request of the Shareholder, the Company
will deliver to the Shareholder a written statement as to whether it has
complied with such information and requirements.

 

10.          MISCELLANEOUS.

 

(a)          
Notices.  All notices, requests and other
communications to any party hereunder shall be in writing (including facsimile
or similar writing) and shall be given,

 

17

 

If to the Company:

 

Newkirk
Realty Trust, Inc.

7
Bulfinch Place

Suite 500

Boston,
Massachusetts 02114

Attn: 
Carolyn Tiffany

Fax: 
(617) 742-4643

 

with a copy to:

 

Katten
Muchin Rosenman

575
Madison Avenue

New
York, New York 10022

Attn:

Fax:

 

If to the Shareholder:

 

Vornado
Realty Trust

Address:
888 Seventh Avenue

New
York, NY 10019

Facsimile
No.: (212) 894-7035

ATTN:
Cliff Broser

 

With
a copy to

Sullivan &
Cromwell LLP

125
Broad Street

New
York, New York 10004

Attn:
William G. Farrar

Facsimile
No. (212) 558-1600

 

or such other address or facsimile number as such
party (or transferee) may hereafter specify for the purpose by notice to the
other parties. Each such notice, request or other communication shall be
effective (a) if given by facsimile, when such facsimile is transmitted to
the facsimile number specified in this Section and the appropriate
facsimile confirmation is received or (b) if given by any other means,
when delivered at the address specified in this Section.

 

(b)          
No Waivers.  No failure or delay by any party in
exercising any right, power or privilege hereunder shall operate as a waiver
thereof nor shall any single or partial exercise thereof preclude any other or
further exercise thereof or the exercise of any other right, power or privilege.
The rights and remedies herein provided shall be cumulative and not exclusive
of any rights or remedies provided by law.

 

18

 

(c)          
Expenses.  Except as otherwise provided for
herein or otherwise agreed to in writing by the parties, all costs and expenses
incurred in connection with the preparation of this Agreement shall be paid by
the Company.

 

(d)          
Successors and Assigns.  The provisions of this Agreement
shall be binding upon and inure to the benefit of the parties hereto and their
respective successors and assigns; provided,
however, that neither party may assign its rights or obligations
under this Agreement without the prior written consent of the other party,
except that the Shareholder may assign its rights hereunder to any Affiliate.

 

(e)          
Governing Law.  This Agreement shall be construed in
accordance with and governed by the law of the State of New York, without
regard to principles of conflicts of law.

 

(f)           
Jurisdiction.  Any suit, action or proceeding
seeking to enforce any provision of, or based on any matter arising out of or
in connection with, this Agreement or the transactions contemplated hereby may
be brought in any federal or state court located in the County and State of New
York, and each of the parties hereby consents to the jurisdiction of such
courts (and of the appropriate appellate courts therefrom) in any such suit,
action or proceeding and irrevocably waives, to the fullest extent permitted by
law, any objection which it may now or hereafter have to the laying of the
venue of any such suit, action or proceeding in any such court or that any such
suit, action or proceeding which is brought in any such court has been brought
in an inconvenient forum. Process in any such suit, action or proceeding may be
served on any party anywhere in the world, whether within or without the
jurisdiction of any such court. Without limiting the foregoing, each party
agrees that service of process on such party as provided in Section 10(a) shall
be deemed effective service of process on such party.

 

(g)          
Waiver of Jury Trial.

 

EACH OF THE PARTIES HERETO
HEREBY IRREVOCABLY WAIVES ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL
PROCEEDING ARISING OUT OF OR RELATED TO THIS AGREEMENT OR THE TRANSACTIONS
CONTEMPLATED HEREBY.

 

(h)          
Counterparts; Effectiveness.  This Agreement may be signed in any
number of counterparts, each of which shall be an original, with the same
effect as if the signatures thereto and hereto were upon the same instrument.

 

(i)           
Entire Agreement.  This Agreement constitutes the entire
agreement between the parties with respect to the subject matter of this
Agreement and supersedes all prior agreements and understandings, both oral and
written, between the parties with respect to the transactions contemplated
herein. No provision of this Agreement or any other agreement contemplated
hereby is intended to confer on any Person other than the parties hereto any
rights or remedies.

 

19

 

(j)           
Captions.  The captions herein are included for
convenience of reference only and shall be ignored in the construction or
interpretation hereof.

 

(k)          
Severability.  If any term, provision, covenant or
restriction of this Agreement is held by a court of competent jurisdiction or
other authority to be invalid, void or unenforceable, the remainder of the
terms, provisions, covenants and restrictions of this Agreement shall remain in
full force and effect and shall in no way be affected, impaired or invalidated
so long as the economic or legal substance of the transactions contemplated
hereby is not affected in any manner materially adverse to any party. Upon such
a determination, the parties shall negotiate in good faith to modify this
Agreement so as to effect the original intent of the parties as closely as
possible in an acceptable manner in order that the transactions contemplated
hereby be consummated as originally contemplated to the fullest extent
possible.

 

(l)           
Amendments.  The provisions of this Agreement,
including the provisions of this sentence, may not be amended, modified or
supplemented, and waivers or consents to departures from the provisions hereof
may not be given without the prior written consent of the parties hereto.

 

(m)         
Aggregation of Stock.  All Registrable Common Stock held by
or acquired by any Affiliated Persons will be aggregated together for the
purpose of determining the availability of any rights under this Agreement.

 

(n)          
Equitable Relief.  The parties hereto agree that legal
remedies may be inadequate to enforce the provisions of this Agreement and that
equitable relief, including specific performance and injunctive relief, may be
used to enforce the provisions of this Agreement.

 

(o)          
No
Inconsistent Agreements.  None of the Company or the Operating
Partnership has entered and neither of them will enter into any agreement that
is inconsistent with the rights granted to the Shareholder in this Agreement or
that otherwise conflicts with the provisions hereof.  The rights granted
to the Shareholder hereunder do not in any way conflict with and are not
inconsistent with the rights granted to the holders of the Company’s or the
Operating Partnership’s other issued and outstanding securities under any such
agreements. From and after the date of this Agreement, neither the Company nor
the Operating Partnership will enter into any agreement with any holder or
prospective holder of any securities of the Company or the Operating
Partnership which would grant such holder or prospective holder more favorable
rights than those granted to the Shareholder hereunder or substantially similar
or equivalent rights to those granted to the Shareholder.  Notwithstanding
the foregoing, the provisions of this Section 10(o) shall not apply to the
Other Registration Rights Agreements.

 

(p)          
No Adverse Action Affecting
the Registrable Common Stock. 
Neither the Company nor the Operating Partnership shall take any action with
respect to the Registrable Common Stock with an intent to adversely affect or
that does adversely affect

 

20

 

the ability of any of the Holders to include such
Registrable Common Stock in a registration undertaken pursuant to this
Agreement or their offer and sale.  Notwithstanding the foregoing, the
provisions of this Section 10(p) shall not apply to the Other Registration
Rights Agreements.

 

IN WITNESS WHEREOF, this Registration
Rights Agreement has been duly executed by each of the parties hereto as of the
date first written above.

 

 

	
  VORNADO REALTY L.P.

  
	
   

  
	
   

  	
   

  
	
  By:

  	
  /s/

  	
   

  
	
  Name:

  	
   

  
	
  Title:

  	
   

  
	
   

  
	
   

  
	
  NEWKIRK REALTY TRUST, INC.

  
	
   

  
	
   

  
	
  By:

  	
  /s/ Peter Braverman

  	
   

  
	
  Name:

  	
  Peter Braverman

  
	
  Title:

  	
  President

  
					

 

21

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