Document:

EX-10.5

 Exhibit 10.5 

EMPLOYEE AND DIRECTOR LONG-TERM INCENTIVE PLAN 

OF 
 STRATEGIC STORAGE
GROWTH TRUST, INC. 

 TABLE OF CONTENTS 

 

									
	 1.
		 PURPOSES OF THE PLAN AND DEFINITIONS
		 	1	 
			 1.1
		PURPOSES		 	1	 
			 1.2
		DEFINITIONS		 	1	 
	 2.
		 PARTICIPANTS
		 	6	 
	 3.
		 SHARES OF STOCK SUBJECT TO THIS PLAN
		 	6	 
	 4.
		 ADMINISTRATION
		 	7	 
			 4.1
		COMMITTEE		 	7	 
			 4.2
		DURATION, REMOVAL, ETC		 	7	 
			 4.3
		MEETINGS AND ACTIONS OF COMMITTEE		 	8	 
			 4.4
		COMMITTEE’S POWERS		 	8	 
			 4.5
		TERM OF PLAN		 	9	 
	 5.
		 GRANT OF OPTIONS
		 	9	 
			 5.1
		WRITTEN AGREEMENT		 	9	 
			 5.2
		ANNUAL $100,000 LIMITATION ON ISOS		 	9	 
	 6.
		 CERTAIN TERMS AND CONDITIONS OF OPTIONS AND OTHER AWARDS 
		 	9	  
			 6.1
		ALL AWARDS		 	10	 
			 6.2
		TERMS AND CONDITIONS TO WHICH ONLY NQOS ARE SUBJECT		 	13	 
			 6.3
		TERMS AND CONDITIONS TO WHICH ONLY ISOS ARE SUBJECT		 	13	 
			 6.4
		SURRENDER OF OPTIONS		 	13	 
	 7.
		 RESTRICTED STOCK
		 	14	 
			 7.1
		GRANT		 	14	 
			 7.2
		RESTRICTIONS		 	14	 
			 7.3 
		DISTRIBUTIONS		 	14	 
			 7.4
		AUTOMATIC GRANTS TO NON-EMPLOYEE DIRECTORS		 	14	 
	 8.
		 STOCK APPRECIATION RIGHTS
		 	15	 
	 9.
		 DIVIDEND EQUIVALENT RIGHTS
		 	15	 
			 9.1
		GENERAL		 	15	 
			 9.2
		RIGHTS AND OPTIONS		 	15	 
			 9.3
		PAYMENTS		 	15	 
	 10.
		 OTHER EQUITY-BASED AWARDS
		 	16	 
			 10.1
		GRANT		 	16	 
			 10.2
		TERMS AND CONDITIONS		 	16	 
			 10.3
		PAYMENT OR SETTLEMENT		 	16	 
	 11.
		 COMPLIANCE WITH LAWS
		 	16	 
	 12.
		 EMPLOYMENT OR OTHER RELATIONSHIP
		 	17	 
	 13.
		 AMENDMENT, SUSPENSION AND TERMINATION OF THIS PLAN
		 	17	 
	 14.
		 LIABILITY AND INDEMNIFICATION OF THE COMMITTEE
		 	17	 
	 15.
		 SECURITIES LAW LEGENDS
		 	17	 
	 16.
		 SEVERABILITY
		 	18	 
	 17.
		 EFFECTIVE DATE AND STOCKHOLDER APPROVAL
		 	18	 
	 18.
		 MISCELLANEOUS
		 	18	  
			 18.1
		LOANS		 	18	  
			 18.2
		FORFEITURE PROVISIONS		 	18	  
			 18.3
		LIMITATIONS APPLICABLE TO SECTION 16		 	18	  

  
 i 

									
			 18.4
		EFFECT OF PLAN UPON OTHER INCENTIVE AND COMPENSATION PLANS		 	19	 
			 18.5
		GOVERNING LAW		 	19	  
			 18.6
		NO ASSIGNMENT		 	19	  
			 18.7
		SECTION 83(B) ELECTION PROHIBITED		 	19	  

  
 ii 

 EMPLOYEE AND DIRECTOR LONG-TERM INCENTIVE PLAN 

OF 
 STRATEGIC STORAGE
GROWTH TRUST, INC. 
  

	1.	PURPOSES OF THE PLAN AND DEFINITIONS 

 1.1. Purposes. The purposes of the
Employee and Director Long-Term Incentive Plan (the “Plan”) of Strategic Storage Growth Trust, Inc. (the “Company”) are to: 

(a) provide incentives to individuals chosen to receive share-based awards because of their ability to improve operations and increase
profits; 
 (b) encourage selected persons to accept or continue employment or other service relationship with the Company, an Affiliate, a
Subsidiary or any Advisor or Affiliate of the Company; and 
 (c) increase the interest of Directors in the Company’s welfare through
their participation in the growth in value of the Company’s Stock. 
 To accomplish these purposes, this Plan provides a means whereby
Employees that the Committee deems important to the Company’s long-term success, Directors and other enumerated persons may receive Awards. 

1.2. Definitions. For purposes of this Plan, the following terms have the following meanings: 

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

“Affiliate” means any Person (other than an Advisor), whose employees (as such term is defined in the Form S-8 registration
statement under the Securities Act) are eligible to receive Awards under the Plan. The determination of whether a Person is an Affiliate shall be made by the Committee acting in its sole and absolute discretion. 

“Applicable Laws” means the requirements relating to the administration of Awards under U.S. state corporate laws, U.S. Federal and
state securities laws, the Code, any stock exchange or quotation system on which the shares of Stock are listed or quoted and the applicable laws of any foreign country or jurisdiction where Awards are, or will be, granted under the Plan. 

“Articles of Incorporation” means the articles of incorporation of the Company as the same may be amended from time to time. 

“Award” means any award under this Plan, including any grant of Options, Restricted Shares, Stock Appreciation Rights, Distribution
Equivalent Rights or Other Equity-Based Awards. 

  
 1 

 “Award Agreement” means, with respect to each Award, the written agreement executed by
the Company and the Participant or other written document approved by the Committee setting forth the terms and conditions of the Award. 

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

“Cause,” unless otherwise defined in an Employee’s employment agreement, means matters which, in the judgment of the Committee,
constitute any one or more of the following (i) gross negligence or willful misconduct in the carrying out of the Participant’s duties, (ii) an uncured breach of any of the Employee’s material duties under his or her employment
agreement, (iii) fraud or other conduct against the material best interests of his or her employer or the Company, or (iv) a conviction of a felony, if such conviction has a material adverse effect on his or her employer or the
Company. If “Cause” is otherwise defined in an Employee’s employment agreement, the definition in the employment agreement shall be effective for purposes of the Plan with respect to the Employee in question. 

“Code” means the Internal Revenue Code of 1986, as amended from time to time, and any successor statute. 

“Committee” has the meaning given it in Section 4.1. 

“Common Stock” or “Stock” means common shares of capital stock of the Company, $0.001 par value per share. 

“Company” has the meaning given it in Section 1.1. 

“Consultant” means a person providing services to the Company or Affiliate in a capacity other than as an Employee or Director. 

“Director” means a person elected or appointed and serving as director of the Company in accordance with the Articles of
Incorporation and the Maryland General Corporation Law. 
 “Distribution Equivalent Right” means an Award of rights pursuant to
Section 8. 
 “Effective Date” has the meaning given it in Section 17. 

“Employee” means an employee or prospective employee of the Company or an Affiliateor Subsidiary of the Company or an Advisor or
Affiliate of an Advisor, as “employee” is defined for purposes of Section 3401(c) of the Code and the Treasury Regulations adopted under that Section.

“Employment Termination” means that a Participant has ceased, for any reason and with or without Cause, to be an Employee or
Director of, or a consultant to the Company, an Affiliate, a Subsidiary, or the Advisor. However, the term “Employment Termination” shall not include a Non-Employee Director’s ceasing to be a Director or a transfer of a
Participant from the Company to an Affiliate, a Subsidiary, or the Advisor or vice versa, or among one another, or a duly authorized leave of absence, unless the Committee has provided otherwise. 

“Exchange Act” means the Securities Exchange Act of 1934, as amended from time to time, and any successor statute. 

  
 2 

 “Exercise Notice” has the meaning given it in Section 6.1(f). 

“Fair Market Value” means with respect to Stock: 

(i) if the Stock is listed on any established stock exchange or a national market system, including, without limitation, the NASDAQ National
Market System, the Fair Market Value of shares of Stock shall be the closing sales price for the Stock, or the mean between the high bid and low asked prices if no sales were reported, as quoted on such system or exchange (or, if the Stock is listed
on more than one exchange, then on the largest such exchange) for the date the value is to be determined (or if there are no sales or bids for such date, then for the last preceding business day on which there were sales or bids), as reported in The
Wall Street Journal or similar publication; or 
 (ii) if the Stock is regularly quoted by a recognized securities dealer but selling
prices are not reported, or if there is no market for the Stock, the Fair Market Value of the shares of Stock shall be determined in good faith by the Committee by the reasonable application of a reasonable valuation method, with reference to all
information material to the value of the Company, including by way of example, the Company’s net worth, prospective earning power, distribution-paying capacity and other relevant factors, including the goodwill of the Company, the economic
outlook in the Company’s industry, the Company’s position in the industry and its management, and the values of stock of other enterprises in the same or similar lines of business; 

provided, however, that for purposes of granted Nonqualified Share Options or Stock Appreciation Rights, Fair Market Value of Stock shall be determined in
accordance with the requirements of Code Section 409A, and for purposes of granting Incentive Stock Options, Fair Market Value of Stock shall be determined in accordance with the requirements of Code Section 422. 

“Grant Date” has the meaning given it in Section 6.1(c). 

“Incentive Stock Option” or “ISO” means any Option means an option to purchase Common Stock from the Company that is
granted under Section 5 of the Plan and that is intended to meet the requirements of Section 422 of the Code or any successor provision thereto. To the extent the aggregate Fair Market Value (determined at the time the Incentive Stock
Option is granted) of the Common Stock with respect to which all Incentive Stock Options are exercisable for the first time by an Employee during any calendar year (under all plans described in subsection (d) of Section 422 of the Code of
the Employee’s employer corporation and its parent and Subsidiaries) exceeds $100,000, such Options shall be treated as Non-Qualified Stock Options. 

“Non-Employee Director” means a person who is a non-employee director as defined in Rule 16b-3 or a person who is an outside
director as defined in Treasury Regulation 1.162-27(e)(3). 
 “Non-Qualified Share Option” or “NQO” means any Option
that is not an Incentive Stock Option. 
 “Option” means an ISO or an NQO granted under Section 5. 

  
 3 

 “Other Equity-Based Award” means any award other than an Option, Stock Appreciation
Right or Distribution Equivalent Right Award which, subject to such terms and conditions as may be prescribed by the Committee, entitles a Participant to receive shares of Common Stock or rights or units valued in whole or in part by reference to,
or otherwise based on, shares of Common Stock or distributions on shares of Common Stock. 
 “Participant” means an eligible
person who is granted an Award. 
 “Performance Goals” means any one or more of the following performance goals, intended by the
Committee to constitute objective goals for purposes of Code Section 162(m), either individually, alternatively or in any combination, applied to either the Company as a whole or to a business unit or Affiliate, either individually,
alternatively or in combination, and measured either quarterly, annually or cumulatively over a period of quarters or years, on an absolute basis or relative to a pre-established target, to previous quarter’s or years’ results or to a
designated comparison group, any of which may be measured on an aggregate or per share basis, in each case as specified by the Committee in the Award Agreement: 

(i) earnings before any one or more of the following: interest, taxes, depreciation or amortization, 

(ii) net income (loss) (either before or after interest, taxes, depreciation and/or amortization), 

(iii) changes in the market price of the Stock (on a per share or aggregate basis), 

(iv) economic value added, 

(v) funds from operations or similar measure, 

(vi) sales or revenue, 
 (vii)
acquisitions or strategic transactions, 
 (viii) operating income (loss), 

(ix) cash flow (including, but not limited to, operating cash flow and free cash flow), 

(x) return on capital, assets, equity, or investment, 

(xi) stockholder returns (including total returns calculated to include aggregate Stock appreciation and total dividends paid, assuming full
reinvestment of dividends, during the applicable period), 
 (xii) cash available, 

(xiii) return on sales, 

(xiv) gross or net profit levels, 

(xv) productivity, 

  
 4 

 (xvi) expense levels or management, 

(xvii) margins, 
 (xviii)
operating efficiency, 
 (xix) customer/tenant satisfaction, 

(xx) working capital, 
 (xxi)
earnings (loss) per share of Stock, 
 (xxii) revenue or earnings growth, 

(xxiii) number of securities sold, 

(xxiv) the Company’s ranking against selected peer groups, 

(xxv) “same-store” performance from period to period, 

(xxvi) leasing or occupancy rates, 

(xxvii) objectively determinable capital deployment, 

(xxviii) objectively determined expense management, 

(xxix) sales or market shares, 

(xxx) number of customers, 

(xxxi) productivity of employees as measured by revenues, cost, or earnings per employee, 

(xxxii) establishment of a trading market for the Company’s Stock, and 

(xxxiii) any combination of the foregoing. 

The Committee may appropriately adjust any evaluation of performance under a Performance Goal to remove the effect of equity compensation expense under FAS
123R, amortization of acquired technology and intangibles, asset write-downs; litigation or claim judgments or settlements; the effect of changes in or provisions under tax law, accounting principles or other such laws or provisions affecting
reported results; accruals for reorganization and restructuring programs; discontinued operations; and any items that are extraordinary, unusual in nature, non-recurring or infrequent in occurrence, except where such action would result in the loss
of the otherwise available exemption of the Award under Section 162(m) of the Code, if applicable. 
 “Performance Period”
means, with respect to an Award, a period of time within which the Performance Goals relating to such Award are to be measured. The Performance Period will be established by the Committee at the time the Award is granted. 

“Person” means a corporation, partnership, trust, association or any other entity. 

  
 5 

 “Related Corporation” means a parent or subsidiary corporation of the Company, as those
terms are defined in Sections 424(e) and (f) of the Code. 
 “Restricted Stock” means an Award granted under
Section 7.“Rule 16b-3” means Rule 16b-3 adopted under Section 16(b) of the Exchange Act or any successor rule, as it may be amended from time to time, and references to paragraphs or clauses of Rules 16b-3 refer to the
corresponding paragraphs or clauses of Rule 16b-3 as it exists at the Effective Date or the comparable paragraph or clause of Rule 16b-3 or successor rule, as that paragraph or clause may thereafter be amended. 

“Section 16(b)” means Section 16(b) under the Exchange Act. 

“Securities Act” means the Securities Act of 1933, as amended from time to time, and any successor statute. 

“Stock Appreciation Right” means an Award granted under Section 8. 

“Subsidiary” means a corporation or other business entity in which the Company directly or indirectly has an ownership interest of
50% or more. 
 “Ten Percent Stockholder” means any person who, at the time this definition is being applied, owns, directly or
indirectly (or is treated as owning by reason of attribution rules currently set forth in Code Section 424 or any successor statute), shares of the Company constituting more than 10% of the total combined voting power of all classes of
outstanding capital stock of the Company or any Related Corporation. 
  

	2.	PARTICIPANTS 

 Any Employee, Consultant or Director shall be eligible to be designated a Participant; provided, however, that Incentive
Stock Options may only be granted to an Employee of the Company or a Related Corporation. 
  

	3.	SHARES OF STOCK SUBJECT TO THIS PLAN 

 The maximum number of shares of Stock that may be issued under Awards is a number of shares equal to ten percent
(10%) of the Company’s outstanding Stock, but may never exceed ten million (10,000,000) shares. The maximum number of shares of Stock with respect to which ISOs may be granted under the Plan is the lesser of the total number of
shares of Stock that may be issued under Awards or ten million (10,000,000) shares. Such shares of Stock may consist, in whole or in part, of authorized and unissued Stock or shares of Stock reacquired in private transactions or open
market purchases, but all shares of Stock issued under the Plan, regardless of their source, shall be counted against the Stock limitation. 

Any shares of Common Stock related to Awards that are settled in cash in lieu of Common Stock shall be available again for grant under the
Plan. Similarly, any shares of Common Stock related to Awards that terminate by expiration, forfeiture, cancellation or otherwise without the issuance of the related shares or are exchanged with the Committee’s permission for Awards not
involving Common Stock, shall be available again for grant under the Plan. 

  
 6 

 Further, any shares of Common Stock that are used by a Participant for the full or partial
payment to the Company of the purchase price of Common Stock upon exercise of a stock option, or for withholding taxes due as a result of that exercise, shall again be available for Awards under the Plan. The shares of Common Stock available for
issuance under the Plan may be authorized and unissued shares. 
 Any shares of Stock subject to unexercised portions of Options granted
under the Plan which shall have been terminated, cancelled or that have expired may again be subject to Options hereunder. Awards settled in cash will not reduce the maximum aggregate number of shares of Common Stock that may be issued under
the Plan. The number of shares of Stock reserved for issuance under this Plan is subject to adjustment in accordance with the provisions for adjustment in Section 6.1. To the extent required under Section 162(m) of the Code and the
regulations thereunder, as applicable, for compensation to be treated as qualified performance-based compensation, subject to adjustment in accordance with Section 6.1, the maximum number of shares of Stock with respect to which
(a) Options, (b) Stock Appreciation Rights, or (c) other Awards to the extent they are granted with the intent that they qualify as qualified performance-based compensation under Section 162(m) of the Code may be granted during
any calendar year to any employee may not exceed one million (1,000,000). If, after grant, an Option is cancelled, the cancelled Option shall continue to be counted against the maximum number of shares for which options may be granted to an employee
during any calendar year as described in this Section 3. If, after grant, the exercise price of an Option is reduced or the base amount on which a Stock Appreciation Right is calculated is reduced, the transaction shall be treated as the
cancellation of the Option or the Stock Appreciation Right, as applicable, and the grant of a new Option or Stock Appreciation Right, as applicable. If an Option or Stock Appreciation Right is deemed to be cancelled as described in the preceding
sentence, the Option or Stock Appreciation Right that is deemed to be canceled and the Option or Stock Appreciation Right that is deemed to be granted shall both be counted against the maximum number of shares for which Options or Stock Appreciation
Rights may be granted to an employee during any calendar year as described in this Section 3. 
  

	4.	ADMINISTRATION 

 4.1. Committee. 

(a) In General. This Plan shall be administered by the compensation committee (the “Committee”) appointed by the Board. The
number of persons who shall constitute the Committee shall be determined from time to time by a majority of all the members of the Board; provided, however, that the Committee shall not consist of fewer than two persons. 

(b) Section 162(m). To the extent the Board desires to qualify Awards granted under this Plan as “performance based
compensation” within the meaning of Section 162(m) of the Code, the Plan shall be administered by a Committee of two or more “outside directors” as defined in Treasury Regulation 1.162-27(e)(3). 

(c) Rule 16b-3. To the extent desirable to qualify transactions under this Plan as exempt under Rule 16b-3, a Committee consisting solely
of two or more “non-employee directors” as defined in Rule 16b-3, must approve such transactions. 
 4.2. Duration, Removal,
Etc. The members of the Committee shall serve at the pleasure of the Board, which shall have the power, at any time and from time to time, to remove members from or add members to the Committee. Removal from the Committee
may be with or 

  
 7 

 
without cause. Any individual serving as a member of the Committee shall have the right to resign from the Committee by giving at least three days’ prior written notice to the
Board. The Board, and not the remaining members of the Committee, shall have the power and authority to fill vacancies on the Committee, however caused. The Board shall promptly fill any vacancy that causes the number of members of the
Committee to be fewer than two or any other minimum number required to comply with Rule 16b-3 or Section 162(m) of the Code, (unless the Board expressly determines not to have Awards under the Plan comply with Rule 16b-3 or Section 162(m)
of the Code, respectively). 
 4.3. Meetings and Actions of Committee. The Board shall designate which of the Committee
members shall be the chairperson of the Committee. If the Board fails to designate a chairperson for the Committee, the members of the Committee shall elect one of the Committee members as chairperson, who shall act as chairperson until he or
she ceases to be a member of the Committee or until the Board (or the Committee) elects a new chairperson. The Committee may make any rules and regulations for the conduct of its business that are not inconsistent with this Plan, the Articles
of Incorporation, the Bylaws of the Company or Applicable Laws. 
 4.4. Committee’s Powers. Subject to the express
provisions of this Plan, the Committee shall have the authority, in its sole discretion: 
 (a) to grant Awards upon such terms and
conditions (not inconsistent with the provisions of this Plan), as the Committee may consider appropriate; 
 (b) to adopt, amend and
rescind administrative and interpretive rules and regulations relating to the Plan; 
 (c) to determine the eligible persons to whom, and
the time or times at which, Awards shall be granted; 
 (d) to determine the number of shares of Stock that shall be the subject of each
Award; 
 (e) to determine the terms and provisions of each Award Agreement (which need not be identical) and any amendments thereto,
including provisions defining or otherwise relating to: 
 (i) the period or periods and extent of exercisability of any Option or Stock
Appreciation Right; 
 (ii) the methods by which the exercise price of an Option may be paid, the form of payment, including, without
limitation, cash, Stock, or other property (including “cashless exercise” arrangements), and the methods by which Stock shall be delivered or deemed to be delivered to Participants; provided, however, that if Stock is used to pay the
exercise price of an Option, such Stock must have been held by the Participant for at least six months; 
 (iii) the extent to which the
transferability of shares of Stock issued or transferred pursuant to any Award is restricted; 
 (iv) the effect of Employment Termination
on an Award; and 
 (v) the effect of approved leaves of absence; 

  
 8 

 (f) to accelerate the time of exercisability of any Option, Distribution Equivalent Right, Stock
Appreciation Right or Other Equity-Based Award; 
 (g) to construe the respective Award Agreements and the Plan; 

(h) to make determinations of the Fair Market Value of shares of Stock; 

(i) to waive any provision, condition or limitation set forth in an Award Agreement; 

(j) to delegate its duties under the Plan to such agents as it may appoint from time to time; provided, however, that the Committee may not
delegate its duties with respect to making or exercising discretion with respect to Awards to eligible persons if such delegation would cause Awards not to qualify for the exemptions provided by Rule 16b-3 or Section 162(m) of the Code (unless
the Board expressly determines not to have Awards under the Plan comply with Rule 16b-3 or Section 162(m) of the Code, respectively); and 

(k) to make all other determinations, perform all other acts and exercise all other powers and authority necessary or advisable for
administering the Plan. 
 The Committee may discriminate among Participants and among Awards granted to a Participant in exercising its
discretion pursuant to this Plan. The Committee may correct any defect, supply any omission or reconcile any inconsistency in the Plan, in any Award or in any Award Agreement in the manner and to the extent it deems necessary or desirable to
implement the Plan, and the Committee shall be the sole and final judge of that necessity or desirability. The determinations of the Committee on the matters referred to in this Section 4.4 shall be final and conclusive. 

4.5. Term of Plan. No Awards shall be granted under this Plan after 10 years from the Effective Date of this Plan.

  

	5.	GRANT OF OPTIONS 

 5.1. Written Agreement. Each Option shall be evidenced by an Award Agreement. The Award Agreement
shall specify whether each Option it evidences is an NQO or an ISO. 
 5.2. Annual $100,000 Limitation on ISOs. To the
extent that the aggregate Fair Market Value of shares of Stock with respect to which ISOs first become exercisable by a Participant in any calendar year exceeds $100,000, taking into account ISOs granted under this Plan and any other plan of the
Company or any Related Corporation, the Options covering such additional shares of Stock becoming exercisable in that year shall cease to be ISOs and thereafter be NQOs. For this purpose, the Fair Market Value of shares of Stock subject to
Options shall be determined as of the date the Options were granted. In reducing the number of Options treated as ISOs to meet this $100,000 limit, the most recently granted Options shall be reduced first. 

 

	6.	 	CERTAIN TERMS AND CONDITIONS OF OPTIONS AND OTHER AWARDS 

 Each Option shall be
designated as an ISO or an NQO and shall be subject to the terms and conditions set forth in Section 6.1. The Committee may provide for different terms and conditions in any Award Agreement or amendment thereto as provided in
Section 4.4 to the extent not inconsistent with the terms of the Plan. 

  
 9 

 6.1. All Awards. All Options and other Awards shall be subject to the
following terms and conditions: 
 (a) Changes in Capital Structure. If the number of outstanding shares of Stock is increased or
decreased by means of a nonreciprocal transaction between an entity and its shareholders that causes the per-share Fair Market Value of the shares of Stock underlying an Award to change, such as a stock dividend, stock split, spinoff, rights
offering, or recapitalization through a large, nonrecurring cash dividend, (each an “Equity Restructuring”) then, from and after the record date for such Equity Restructuring, the number of shares of Stock and class of Stock subject to
this Plan and each outstanding Award shall be adjusted in proportion to such increase or decrease in outstanding Stock and the then-applicable exercise price of each outstanding Award shall be correspondingly decreased or increased, as applicable.

 (b) Certain Corporate Transactions. In the case of any reclassification or change of outstanding Stock issuable upon exercise of an
outstanding Award or in the case of any consolidation or merger of the Company with or into another entity (other than a merger in which the Company is the surviving entity and which does not result in any reclassification or change in the
then-outstanding Stock) or in the case of any sale or conveyance to another entity of the property of the Company as an entirety or substantially as an entirety, in each case that is not an Equity Restructuring, then, as a condition of such
reclassification, change, consolidation, merger, sale or conveyance, the Company or such successor or purchasing entity, as the case may be, shall make lawful and adequate provision whereby the holder of each outstanding Award shall thereafter have
the right, on exercise of such Award, to receive the kind and amount of securities, property and/or cash receivable upon such reclassification, change, consolidation, merger, sale or conveyance by a holder of the number of securities issuable upon
exercise of such Award immediately before such reclassification, change, consolidation, merger, sale or conveyance. Such provision shall include adjustments that shall be as nearly equivalent as may be practicable to the adjustments provided
for in Section 6.1(a). Notwithstanding the foregoing, if such a transaction occurs, in lieu of causing such rights to be substituted for outstanding Awards, the Committee may, upon 20 days’ prior written notice to Participants in its
sole discretion: (i) shorten the period during which Awards are exercisable, provided they remain exercisable, to the extent otherwise exercisable, for at least 20 days after the date the notice is given, or (ii) cancel an Award upon
payment to the Participant in cash, with respect to each Award to the extent then exercisable, of an amount which, in the sole discretion of the Committee, is determined to be equivalent to the amount, if any, by which the Fair Market Value (at the
effective time of the transaction) of the consideration that the Participant would have received if the Award had been exercised before the effective time exceeds the exercise price of the Award. The actions described in this
Section 6.1(b) may be taken without regard to any resulting tax consequences to the Participant. 
 (c) Grant Date. Each Award
Agreement shall specify the date as of which it shall be effective (the “Grant Date”), which shall not be earlier than the date on which the Committee has approved the terms and conditions of the Award and has determined the recipient of
the Award and the number of shares, if any, covered by the Award, and has taken all such other actions necessary to complete the grant of the Award. 

(d) Time of Exercise; Vesting. Awards may, in the sole discretion of the Committee, be exercisable or may vest, and restrictions may
lapse, including without limitation, upon the achievement of any Performance Goals, if any, that may be established by the Committee as a condition to vesting or settlement of the Award, as the case may be, at such times and in such amounts as may
be specified by the Committee in the grant of the Award 

  
 10 

 
Performance Goals, if any, shall be established before twenty-five percent (25%) of the Performance Period has elapsed, but in no event later than within ninety (90) days after the
first day of a Performance Period. At the time any Performance Goals are established, the outcome as to whether the Performance Goals will be met must be substantially uncertain. If any Performance Goals are established as a condition to vesting or
settlement of an Award and such Performance Goal is not based solely on the increase in the Fair Market Value of the Stock, the Committee shall certify in writing that the applicable Performance Goals were in fact satisfied before such Award is
vested or settled, as applicable. To the extent an Award is subject to Performance Goals with the intent that the Award constitute performance-based compensation under Code Section 162(m), the Committee shall comply with all applicable
requirements under Code Section 162(m) and the rules and regulations promulgated thereunder in granting, modifying, and settling such Award. The Committee may, but is not required to, structure any Award so as to qualify as performance-based
compensation under Code Section 162(m) and may establish other performance criteria that do not qualify as Performance Goals hereunder. 

(e) Nonassignability of Rights. Awards shall not be transferable other than with the consent of the Committee (which consent will not be
granted in the case of ISOs unless the conditions for transfer of ISOs specified in the Code have been satisfied) or by will or the laws of the descent and distribution. Awards requiring exercise shall be exercisable during the
Participant’s lifetime, only by the Participant; or in the event the Participant is disabled (within the meaning of Section 22(e)(3) of the Code), by the legal representative of the Participant; or in the event of death of the Participant,
by the legal representative of the Participant’s estate or if no legal representative has been appointed within ninety (90) days of the Participant’s death, by the person(s) taking under the laws of descent and distribution governing
the State in which the Participant was domiciled at the time of the Participant’s death; except to the extent that the Committee may provide otherwise as to any Awards other than Incentive Stock Options. 

(f) Notice and Payment. To the extent it is exercisable, an Award shall be exercisable only by written or recorded electronic notice of
exercise, in the manner specified by the Committee from time to time, delivered to the Company or its designated agent during the term of the Award (the “Exercise Notice”). The Exercise Notice shall: (i) state the number of
shares of Stock with respect to which the Award is being exercised; (ii) be signed by the holder of the Award or by the person authorized to exercise the Award pursuant to Section 6.1(e); and (iii) include such other information,
instruments and documents as may be required to satisfy any other condition to exercise set forth in the Award Agreement. Except as provided below, payment in full, in cash or check, shall be made for all shares of Stock purchased at the time
notice of exercise of an Award is given to the Company. The proceeds of any payment shall constitute general funds of the Company. At the time an Award is granted or before it is exercised, the Committee, in the exercise of its sole
discretion, may authorize any one or more of the following additional methods of payment: 
 (i) for all Participants other than officers
of the Company, its Affiliates or Subsidiaries, and Directors, acceptance of each such Participant’s full recourse promissory note for some or all (to the extent permitted by law) of the exercise price of the Stock being acquired, payable on
such terms and rate of interest as determined by the Committee, and secured in such manner, if at all, as the Committee shall approve, including, without limitation, by a security interest in the Stock which are the subject of the Award or other
securities; 
 (ii) for all Participants, delivery by each such Participant of Stock already owned by such Participant for all or part of
the exercise price of the Award being exercised, provided that the Fair Market Value of such Stock is equal on the date of exercise to the exercise price of the Award being exercised, or such portion thereof as the Participant is authorized to pay
and elects to pay by delivery of such shares of Stock; 

  
 11 

 (iii) for all Participants, surrender by each such Participant, or withholding by the Company
from the Stock issuable upon exercise of the Award, of a number of shares of Stock subject to the Award being exercised with a Fair Market Value equal to some or all of the exercise price of the Stock being acquired, together with such documentation
as the Committee and the broker, if applicable, shall require; or 
 (iv) for all Participants, payment may be made pursuant to a cashless
exercise arrangement approved by the Committee. 
 (g) Termination of Employment; Removal of a Director for Cause. The Committee shall
establish, in respect of each Award when granted, the effect of an Employment Termination on the rights and benefits thereunder and in so doing may, but need not, make distinctions based upon the cause of termination (such as retirement, death,
disability or other factors) or which party effected the termination (the employer or the Employee). All Awards granted to a Director whether or not an Employee will lapse on the date the Director ceases to be a Director as a result of his
removal for Cause. Notwithstanding any other provision in this Plan or the Award Agreement, the Committee may decide, in its discretion at the time of any Employment Termination (or within a reasonable time thereafter), to extend the exercise
period of an Award (but not beyond the period specified in Section 6.2(b) or 6.3(b), as applicable) and not decrease the number of shares of Stock covered by the Award with respect to which the Award is exercisable or vested. A transfer of
a Participant from the Company to an Affiliate, a Subsidiary, or the Advisor or its Affiliate or vice versa, or among one another, or a duly authorized leave of absence duly, shall not be deemed an Employment Termination or a break in continuous
employment unless the Committee has provided otherwise. 
 (h) Other Provisions. Each Award Agreement may contain such other terms,
provisions and conditions not inconsistent with this Plan, as may be determined by the Committee, and each ISO granted under this Plan shall include such provisions and conditions as are necessary to qualify such Option as an “incentive stock
option” within the meaning of Section 422 of the Code. 
 (i) Withholding and Employment Taxes. At the time of exercise of an
Award, the lapse of restrictions on an Award, the Participant shall remit to the Company in cash all applicable Federal and state withholding and employment taxes. If and to the extent authorized and approved by the Committee in its sole
discretion, a Participant may elect, by means of a form of election to be prescribed by the Committee, to have shares of Stock which are acquired upon exercise of an Award withheld by the Company or tender other shares of Stock owned by the
Participant to the Company at the time that the amount of such taxes is determined, in order to pay the amount of such tax obligations, subject to any limitations as the Committee determines are necessary or appropriate. Any shares of Stock so
withheld or tendered shall be valued by the Company as of the date they are withheld or tendered. 
 (j) Employee Status. If the terms
of any Award provides that it may be earned or exercised only during employment or continued service or within a specified period of time after termination of employment or continued service, the Committee may decide to what extent leaves of absence
for governmental or military service, illness, temporary disability or other reasons shall not be deemed interruptions of continuous employment or service. 

  
 12 

 (k) Stockholder Rights. A Participant, as a result of receiving an Award, shall not have any
rights as a stockholder until, and then only to the extent that, the Award is earned and settled in shares of Common Stock. 
 6.2.
Terms and Conditions to Which Only NQOs Are Subject. Options granted under this Plan which are designated as NQOs shall be subject to the following terms and conditions: 

(a) Exercise Price. The exercise price of an NQO shall be determined by the Committee; provided, however, that the exercise price of an
NQO shall not be less than the Fair Market Value of the Stock subject to the Option on the Grant Date. 
 (b) Option Term. Unless the
Committee specifies an earlier expiration date at the Grant Date, each NQO shall expire 10 years after the Grant Date. 
 6.3. Terms
and Conditions to Which Only ISOs Are Subject. Options granted under this Plan which are designated as ISOs shall be subject to the following terms and conditions: 

(a) Exercise Price. The exercise price of an ISO shall be determined in accordance with the applicable provisions of the Code and shall
in no event be less than the Fair Market Value of the Stock covered by the ISO at the Grant Date; provided, however, that the exercise price of an ISO granted to a Ten Percent Stockholder shall not be less than 110% of such fair market value. 

(b) Option Term. Unless an earlier expiration date is specified by the Committee at the Grant Date, each ISO shall expire 10 years after
the Grant Date; provided, however, that an ISO granted to a Ten Percent Stockholder shall expire no later than five years after the Grant Date. 

(c) Disqualifying Dispositions. If shares of Stock acquired by exercise of an ISO are disposed of within two years after the Grant Date
or within one year after the transfer of the Stock to the optionee, the holder of the Stock immediately before the disposition shall promptly notify the Company in writing of the date and terms of the disposition, shall provide such other
information regarding the disposition as the Company may reasonably require. 
 (d) Termination of Employment. All vested ISOs must be
exercised within three months of the Employment Termination of the optionee, or at any time specified in the Award Agreement that is otherwise permissible in the case of a Participant who dies while employed or within three months of Employment
Termination, unless such Employment Termination is due to the employee’s being disabled (within the meaning of Section 22(e)(3) of the Code), in which case the ISO shall be exercised within one year of the Employment Termination; provided,
however, that such time limits may be exceeded by the Committee under the terms of the Award, in which case, the ISO will be a NQO if it is exercised after the time limits that would otherwise apply. 

6.4. Surrender of Options. The Committee, acting in its sole discretion, may include a provision in an Award Agreement
allowing the optionee to surrender the Option covered by the agreement, in whole or in part in lieu of exercise in whole or in part, on any date that the Fair Market Value of the Stock subject to the Option exceeds the exercise price and the Option
is exercisable (to the extent being surrendered). The surrender shall be effected by the 

  
 13 

 
delivery of the Award Agreement, together with a signed statement which specifies the number of shares of Stock as to which the optionee is surrendering the Option, together with a request for
such type of payment. Upon such surrender, the optionee shall receive (subject to any limitations imposed by Rule 16b-3), at the election of the Committee, payment in cash or shares of Stock, or a combination of the two, equal to (or equal in
Fair Market Value to) the excess of the Fair Market Value of the shares of Stock covered by the portion of the Option being surrendered on the date of surrender over the exercise price for such shares of Stock. The Committee, acting in its sole
discretion, shall determine the form of payment, taking into account such factors as it deems appropriate. To the extent necessary to satisfy Applicable Laws, the Committee may terminate an optionee’s rights to receive payments in cash for
fractional shares of Stock. Any Award Agreement providing for such surrender privilege shall also incorporate such additional restrictions on the exercise or surrender of Options as may be necessary to satisfy Applicable Law. 

 

	7.	RESTRICTED STOCK 

 Restricted Stock shall be subject to the following terms and conditions: 

7.1. Grant. The Committee may grant one or more Awards of Restricted Stock to any Participant. Each Award of Restricted Stock
shall specify the number of shares of Stock to be issued to the Participant, the date of issuance and the restrictions imposed on the shares of Stock including the conditions of release or lapse of such restrictions. Pending the lapse of
restrictions, certificates evidencing Restricted Stock (if any) shall bear a legend referring to the restrictions and shall be held by the Company. Upon the issuance of Restricted Stock, the Participant may be required to furnish such additional
documentation or other assurances as the Committee may require in order to enforce the restrictions applicable thereto. 
 7.2.
Restrictions. Except as specifically provided elsewhere in this Plan or the Award Agreement regarding Restricted Stock, Restricted Stock may not be sold, assigned, transferred, pledged or otherwise disposed of or encumbered, either
voluntarily or involuntarily, until the restrictions have lapsed and the rights to the shares of Restricted Stock have vested. The Committee may in its sole discretion provide for the lapse of such restrictions in installments and may accelerate or
waive such restrictions, in whole or in part, based on service, performance or such other factors or criteria as the Committee may determine. 

7.3. Distributions. Unless otherwise determined by the Committee, cash distributions with respect to Restricted Stock shall be
paid to the recipient of the Award of Restricted Stock on the normal distribution payment dates, and distributions payable in shares of Stock shall be paid in the form of Restricted Stock having the same terms as the Restricted Stock upon which such
distribution is paid. Each Award Agreement for Awards of Restricted Stock shall specify whether and, if so, the extent to which the Participant shall be obligated to return to the Company any cash distributions paid with respect to any shares of
Restricted Stock which are subsequently forfeited. 
 7.4. Automatic Grants to Non-Employee Directors. Each individual
who is elected or re-elected to the Board (whether through stockholder meeting or by Directors to fill a vacancy on the Board) shall be granted a minimum of 1,000 shares of Restricted Stock (the “Director Restricted Stock”) on the date of
such election or re-election, subject to increase in the discretion of the Committee. The Director Restricted Stock shall fully vest if the Non-Employee Director completes the term or partial term for which he or she was elected. Except as provided
otherwise in this Section 7.4, such Director Restricted Stock shall be subject to the same terms and conditions as are applicable to Restricted Stock. 

  
 14 

	8.	STOCK APPRECIATION RIGHTS 

 The Committee may grant Stock Appreciation Rights to eligible persons. A Stock Appreciation Right shall entitle its
holder to receive from the Company, at the time of exercise of the right, an amount in cash equal to (or, at the Committee’s discretion, shares of Stock equal in Fair Market Value to) the excess of the Fair Market Value (at the date of
exercise) of a share of Stock over a specified price fixed by the Committee in the governing Award Agreement multiplied by the number of shares of Stock as to which the holder is exercising the Stock Appreciation Right. The specified price
fixed by the Committee shall not be less than the Fair Market Value of the shares of Stock on the Grant Date of the Stock Appreciation Right. Stock Appreciation Rights may be granted in tandem with any previously or contemporaneously granted
Option or independent of any Option. The specified price of a tandem Stock Appreciation Right shall be the exercise price of the related Option. Any Stock Appreciation Rights granted in connection with an ISO shall contain such terms as
may be required to comply with Section 422 of the Code. 
  

	9.	DISTRIBUTION EQUIVALENT RIGHTS 

 9.1. General. The Committee shall have the authority to grant Distribution Equivalent Rights to
Participants upon such terms and conditions as it shall establish, subject in all events to the following limitations and provisions of general application set forth in this Plan. Each Distribution Equivalent Right shall entitle a holder to
receive, for a period of time to be determined by the Committee, a payment equal to the periodic distributions declared and paid by the Company on one share of Stock. If the Distribution Equivalent Right relates to a specific Option, the period
shall not extend beyond the earliest of the date the Option is exercised, the date any Stock Appreciation Right related to the Option is exercised, or the expiration date set forth in the Option. To the extent the Committee deems advisable, it shall
structure the Distribution Equivalent Rights such that they are either exempt from or compliant with Code Section 409A. 
 9.2.
Rights and Options. Each Distribution Equivalent Right may relate to a specific Option granted under this Plan and may be granted to the optionee either concurrently with the grant of such Option or at such later time as determined
by the Committee, or each Distribution Equivalent Right may be granted independent of any Option. 
 9.3. Payments. The
Committee shall determine at the time of grant whether payment pursuant to a Distribution Equivalent Right shall be immediate or deferred and if immediate, the Company shall make payments pursuant to each Distribution Equivalent Right concurrently
with the payment of the periodic distributions to holders of Common Stock. If deferred, the payments shall not be made until a date or the occurrence of an event specified by the Committee and then shall be made within 30 days after the
occurrence of the specified date or event, unless the Distribution Equivalent Right is forfeited under the terms of the Plan or applicable Award Agreement; provided, however, that the Committee may not make payment of a Distribution Equivalent Right
contingent upon the exercise of the related Option or Stock Appreciation Right, to the extent the Committee desires to preserve such Option’s or Stock Appreciation Right’s exemption from Section 409A of the Code. The Committee
shall also determine in its sole discretion whether any portion of any payment shall be made in shares of Stock. 

  
 15 

	10.	OTHER EQUITY-BASED AWARDS 

 10.1. Grant. The Committee may grant one or more Other Equity-Based Awards to any Participant. Each
Award will specify the number of shares of Common Stock or other equity interests covered by such awards. 
 10.2. Terms and
Conditions. The Committee, at the time an Other Equity-Based Award is made, shall specify the terms and conditions which govern the award. The terms and conditions of an Other Equity-Based Award may prescribe that a Participant’s
rights in the Other Equity-Based Award shall be forfeitable, nontransferable or otherwise restricted for a period of time or subject to such other conditions as may be determined by the Committee, in its discretion and set forth in the Agreement.
Other Equity-Based Awards may be granted to Participants, either alone or in addition to other awards granted under the Plan, and Other Equity-Based Awards may be granted in the settlement of other Awards granted under the Plan. To the extent the
Committee deems advisable, it shall structure such Other Equity-Based Awards such that they are either exempt from or compliant with Code Section 409A. 

10.3. Payment or Settlement. Other Equity-Based Awards valued in whole or in part by reference to, or otherwise based on,
shares of Common Stock, shall be payable or settled in shares of Common Stock, cash or a combination of Common Stock and cash, as determined by the Committee in its discretion. Other Equity-Based Awards denominated as equity interests other than
shares of Common Stock may be paid or settled in shares or units of such equity interests or cash or a combination of both as determined by the Committee in its discretion. 
  

	11.	COMPLIANCE WITH LAWS 

 This Plan, the granting and vesting of Awards under this Plan, the issuance and delivery of Stock, and the payment of money
or other consideration allowable under this Plan or under Awards awarded hereunder are subject to compliance with all applicable federal and state laws, rules and regulations (including, but not limited to, state and federal securities laws and
federal margin requirements) and to such approvals by any listing, regulatory or governmental authority as may, in the opinion of counsel for the Committee, the Board or the Company, be necessary or advisable in connection therewith. Without
limiting the generality of the foregoing, the Committee may, in its sole discretion, rescind, limit, amend, suspend, or alter any Award or limit a Participant’s ability to exercise, or refuse to settle, any Award hereunder to the extent that
the granting, issuance, or exercise of such Award (or any settlement thereof) or any term of such Award would jeopardize the status of the Company as a “real estate investment trust” under the Code or other applicable state or federal
laws. Any securities delivered under this Plan shall be subject to such restrictions, and the person acquiring such securities shall, if requested by the Company, provide such assurances and representations to the Company as the Committee, the
Board or the Company may deem necessary or desirable to assure compliance with all applicable legal requirements. To the extent permitted by applicable law, the Plan shall be deemed amended to the extent necessary to conform to such laws, rules
and regulations. Nothing in this Plan or in any Award or Award Agreement shall require the Company to issue any Stock with respect to any Award if, in the opinion of counsel for the Company, that issuance could constitute a violation of any
Applicable Laws. As a condition to the grant or exercise of any Award, the Company may require the Participant (or, in the event of the Participant’s death, the Participant’s legal representatives, heirs, legatees or distributees) to
provide written representations concerning the Participant’s (or such other person’s) intentions with regard to the retention or disposition of the Stock covered by the Award and written covenants as to the manner of disposal of such Stock
as may be necessary or useful to ensure that the grant, exercise or disposition thereof will not 

  
 16 

 
violate the Securities Act, any other law or any rule of any applicable securities exchange or securities association then in effect. The Company shall not be required to register any Stock
under the Securities Act or register or qualify any Stock under any state or other securities laws. 
  

	12.	EMPLOYMENT OR OTHER RELATIONSHIP 

 Nothing in this Plan or any Award shall in any way interfere with or limit the right of the Company or its Affiliateor
Subsidiary or the Advisor or its Affiliate to terminate any Participant’s employment or status as a consultant or Director at any time, nor confer upon any Participant any right to continue in the employ of, or as a Director or consultant of,
the Companyor its Affiliateor Subsidiary or the Advisor or its Affiliate. 
  

	13.	AMENDMENT, SUSPENSION AND TERMINATION OF THIS PLAN 

 The Board may at any time amend, suspend or discontinue this Plan provided that such amendment, suspension or discontinuance
meets the requirements of Applicable Laws, including without limitation, the requirements for stockholder approval. Notwithstanding the above, an amendment, alteration, suspension or discontinuation shall not be made if it would impair the
rights of any Participant under any Award previously granted, without the Participant’s consent, except to conform this Plan and Awards granted to the requirements of Applicable Laws or as permitted under Section 11 hereof. 

 

	14.	LIABILITY AND INDEMNIFICATION OF THE COMMITTEE 

 No person constituting, or member of the group constituting, the Committee shall be liable for any act or omission on such
person’s part, including but not limited to the exercise of any power or discretion given to such member under this Plan, except for those acts or omissions resulting from such member’s gross negligence or willful misconduct. The
Company shall indemnify each present and future person constituting, or member of the group constituting, the Committee against, and each person or member of the group constituting the Committee shall be entitled without further act on his or her
part to indemnity from the Company for, all expenses (including the amount of judgments and the amount of approved settlements made with a view to the curtailment of costs of litigation) reasonably incurred by such person in connection with or
arising out of any action, suit or proceeding to the fullest extent permitted by law and by the Articles of Incorporation and Bylaws of the Company. 
  

	15.	SECURITIES LAW LEGENDS 

 Certificates of shares of Stock and Restricted Stock, if issued, may have the following legend and statements of other
applicable restrictions endorsed thereon: 
 THE SHARES OF STOCK REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED, OR ANY STATE LAWS. THE SHARES MAY NOT BE OFFERED FOR SALE, SOLD, PLEDGED, TRANSFERRED OR OTHERWISE DISPOSED OF UNTIL THE HOLDER HEREOF PROVIDES EVIDENCE SATISFACTORY TO OF THE ISSUER (WHICH, IN THE SOLE
DISCRETION THE ISSUER, MAY INCLUDE AN OPINION OF COUNSEL SATISFACTORY TO THE ISSUER) THAT SUCH OFFER, SALE, PLEDGE, TRANSFER OR OTHER DISPOSITION WILL NOT VIOLATE ANY APPLICABLE FEDERAL OR STATE SECURITIES LAWS. 

  
 17 

 This legend shall not be required for any shares of Stock issued pursuant to an effective
registration statement under the Securities Act. 
  

	16.	SEVERABILITY 

 If any provision of this Plan is held to be illegal or invalid for any
reason, that illegality or invalidity shall not affect the remaining portions of the Plan, but such provision shall be fully severable and the Plan shall be construed and enforced as if the illegal or invalid provision had never been included in
this Plan. Such an illegal or invalid provision shall be replaced by a revised provision that most nearly comports to the substance of the illegal or invalid provision. If any of the terms or provisions of this Plan or any Award Agreement
conflict with the requirements of Applicable Laws, those conflicting terms or provisions shall be deemed inoperative to the extent they conflict with Applicable Law. 
  

	17.	EFFECTIVE DATE 

 The effective date of this Plan is the later of the date this Plan was originally approved by the Company’s Board
(December 12, 2014) or the date it was approved in that form by the holders of a majority of the Company’s voting stock (January 15, 2015) (the “Effective Date”). 

 

	18.	MISCELLANEOUS 

 18.1. Loans. An employer may, in its discretion, extend one or more loans to Employees in connection with
the exercise or receipt of an Award granted under this Plan, to the extent not prohibited by law or the terms of the Plan. The terms and conditions of any such loan shall be set by the board of directors of the employer. 

18.2. Forfeiture Provisions. Pursuant to its general authority to determine the terms and conditions applicable to Awards
granted under the Plan, the Committee shall have the right (to the extent consistent with the applicable exemptive conditions of Rule 16b-3) to provide, in the terms of an Award Agreement, or by separate written instrument, that (i) any
proceeds, gains or other economic benefit actually or constructively received by a Participant upon the receipt or exercise of the Award, or upon the receipt or resale of any Stock underlying such Award, must be paid to the Company, and
(ii) the Award shall terminate and any unexercised portion of such Award (whether or not vested) shall be forfeited, if (a) Employment Termination occurs prior to a specified date, or within a specified time period following receipt or
exercise of the Award, or (b) the Participant, at any time, or during a specified time period, engages in any activity in competition with his employer or the Company, or which is inimical, contrary or harmful to the interests of his employer
or the Company, as may be further defined from time to time by the Committee. 
 18.3. Limitations Applicable to
Section 16. Notwithstanding any other provision of this Plan, this Plan, and any Award granted to any individual who is then subject to Section 16 of the Exchange Act, shall be subject to any additional limitations set forth
in any applicable exemptive rule under Section 16 of the Exchange Act (including any amendment to Rule 16b-3) that are requirements for the application of such exemptive rule. To the extent permitted by applicable law, the Plan shall be
deemed amended to the extent necessary to conform to such applicable exemptive rule. 

  
 18 

 18.4. Effect of Plan Upon Other Incentive and Compensation Plans. The adoption
of this Plan shall not affect any other options or compensation or incentive plans in effect for the Company. Nothing in this Plan shall be construed to limit the right of the Company (i) to establish any other forms of incentives or
compensation for employees of the Company, the Advisor or its Affiliates, or (ii) to grant or assume options or other rights or awards otherwise than under this Plan in connection with any proper corporate purpose including, but not by way of
limitation, the grant or assumption of options in connection with the acquisition by purchase, lease, merger, consolidation or otherwise of the business, stock or assets of any corporation, partnership, limited liability company, firm or
association. 
 18.5. Governing Law This Plan shall be governed by and construed in accordance with the laws of the State of
Maryland, except as superseded by applicable Federal law. 
 18.6. No Assignment No Awards (other than unrestricted Stock
Awards) or any other payment under the Plan shall be subject in any manner to alienation, anticipation, sale, transfer (except by will or the laws of descent and distribution), assignment, pledge, or encumbrance; however, the Committee may (but need
not) permit other transfers where the Committee concludes that transferability (i) does not result in accelerated taxation, (ii) does not cause any Option intended to be an ISO to fail to be described in Code Section 422(b), and
(iii) is otherwise appropriate and desirable, taking into account any state or federal securities laws applicable to transferable Awards. During the lifetime of the Participant no Award shall be payable to or exercisable by anyone other than
the Participant to whom it was granted, other than (a) the duly appointed conservator or other lawfully designated representative of the Participant in the case of a permanent disability involving a mental incapacity or (b) the transferee
in the case of an Award transferred in accordance with the preceding sentence 
 18.7. Section 83(b) Election
Prohibited. No Participant may make an election under Section 83(b) of the Code with respect to any Award granted under this Plan without the Company’s consent. Each Award for which an election under Section 83(b) of the
Code could be made without regard to this Section 18.5 shall, to the extent the Committee deems advisable, contain an acknowledgment by the Participant that such election may not be made without the Company’s consent. 

[End of Plan.] 

  
 19CPA 18 2014 Q4 10-K EXH 10.5

Exhibit 10.5

AMENDED AND RESTATED
AGREEMENT OF LIMITED PARTNERSHIP 
OF CPA:18 LIMITED PARTNERSHIP

THIS AMENDED AND RESTATED AGREEMENT OF LIMITED PARTNERSHIP OF CPA:18 LIMITED PARTNERSHIP, a Delaware limited partnership (the “Partnership”), dated as of January 1, 2015 (the “Effective Date”), is entered into by and among Corporate Property Associates 18 - Global Incorporated, a Maryland corporation holding both general partner and limited partner interests in the Partnership (the “General Partner”), and WPC-CPA:18 Holdings, LLC, a Delaware limited liability company holding a special general partner interest in the Partnership (the “Special General Partner”), together with any other Persons who become Partners in the Partnership as provided herein.
WHEREAS, the Partnership was formed when a Certificate of Limited Partnership was filed and accepted by the Secretary of State of the State of Delaware; and
WHEREAS, the Partners entered into that certain Agreement of Limited Partnership of CPA:18 Limited Partnership, dated May 7, 2013 (the “Original Partnership Agreement”), and the Partners desire re to amend and restate the Original Partnership Agreement on the terms set forth herein; and
WHEREAS, Section 7.3B of the Original Partnership Agreement provides that the General Partner may amend the Original Partnership Agreement with the Consent of the Partners, which consent is evidenced by the execution of this Agreement by the General Partner;
NOW, THEREFORE, BE IT RESOLVED, that for good and adequate consideration, the receipt of which is hereby acknowledged, the parties hereto agree as follows:
Article 1 
DEFINED TERMS
Section 1.1    Definitions.
The following definitions shall be for all purposes, unless otherwise clearly indicated to the contrary, applied to the terms used in this Agreement.
“Act” means the Delaware Revised Uniform Limited Partnership Act (6 Del. C. Section 17-101 et seq.), as it may be amended from time to time, and any successor to such statute.
“Additional Funds” shall have the meaning set forth in Section 4.4.A.
“Additional Limited Partner” means a Person admitted to the Partnership as a Limited Partner pursuant to Section 12.2 and who is shown as such on the books and records of the Partnership.
“Adjusted Capital Account Deficit” means, with respect to any Partner, the deficit balance, if any, in such Partner’s Capital Account as of the end of the relevant fiscal year, after giving effect to the following adjustments:
(i)    such deficit shall be decreased by any amounts which such Partner is obligated to restore pursuant to this Agreement or is deemed to be obligated to restore pursuant to Regulations Section 1.704-1(b)(2)(ii)(c) or the penultimate sentence of each of Regulations Sections 1.704-2(i)(5) and 1.704-2(g)(1); and

	
			
	 
	 
	 

(ii)    such deficit shall be increased by the items described in Regulations Section 1.704-1(b)(2)(ii)(d)(4), (5) and (6).
The foregoing definition of Adjusted Capital Account Deficit is intended to comply with the provisions of Regulations Section 1.704-1(b)(2)(ii)(d) and shall be interpreted consistently therewith.  A positive balance in a Partner’s Capital Account, after giving effect to the adjustments described above in clauses (i) and (ii), is referred to in this Agreement as an “Adjusted Capital Account Balance.”
“Adjustment Date” means, with respect to any Capital Contribution, the close of business on the Business Day last preceding the date of the Capital Contribution, provided, that if such Capital Contribution is being made by the General Partner in respect of the proceeds from the issuance of REIT Shares (or the issuance of the General Partner’s securities exercisable for, convertible into or exchangeable for REIT Shares), then the Adjustment Date shall be as of the close of business on the Business Day last preceding the date of the issuance of such securities.
“Advisor” means Carey Asset Management Corp., a Delaware corporation.
“Advisory Agreement” means that certain Advisory Agreement between the Advisor and the General Partner entered into contemporaneously with this Agreement.
“Affiliate” means, with respect to any Person, any Person directly or indirectly controlling, controlled by or under common control with such Person.  Control of any Person means the power to direct the management and policies of such Person, directly or indirectly, whether through the ownership of voting securities, by contract or otherwise, and the terms “controlling” and “controlled” have meanings correlative to the foregoing.
“Agreed Value” means (i) in the case of any Contributed Property set forth in Exhibit A and as of the time of its contribution to the Partnership, the Agreed Value of such property as set forth in Exhibit A; (ii) in the case of any Contributed Property not set forth in Exhibit A and as of the time of its contribution to the Partnership, the fair market value of such property or other consideration as determined by the General Partner, reduced by any liabilities either assumed by the Partnership upon such contribution or to which such property is subject when contributed; and (iii) in the case of any property distributed to a Partner by the Partnership, the fair market value of such property as determined by the General Partner at the time such property is distributed, reduced by any liabilities either assumed by such Partner upon such distribution or to which such property is subject at the time of the distribution as determined under Section 752 of the Code and the Regulations thereunder.
“Agreement” means this Agreement of Limited Partnership, as it may be amended, modified, supplemented or restated from time to time.
“Appraisal” means with respect to any assets, the opinion of an independent third party experienced in the valuation of similar assets, selected by the General Partner and the Special General Partner in good faith; such opinion may be in the form of an opinion by such independent third party that the value for such property or asset as set by the General Partner is fair, from a financial point of view, to the Partnership.
“Assignee” means a Person to whom one or more OP Units have been transferred in a manner permitted under this Agreement, but who has not become a Substituted Limited Partner, and who has the rights set forth in Section 11.5.

	
			
	 
	2
	 

“Available Cash” means, with respect to any period for which such calculation is being made, the cash flow generated by Partnership operations and investments as determined in the reasonable discretion of the General Partner, taking into account all cash available for distribution from all sources excluding Capital Proceeds, after the payment of regular debt payments (including, without limitation, regularly scheduled payments of interest and amortization, but excluding balloon payments and early prepayment of debt principal) and Operating Expenses of the Partnership (as defined in the Advisory Agreement) but before the payment of distributions to Partners.  Notwithstanding the foregoing, the operating cash flow of any entity in which the Partnership owns, directly or indirectly, less than a 100% interest shall be multiplied by the percentage ownership of such entity held, directly or indirectly, by the Partnership.
“Available Cash from Investments” means that portion of Available Cash attributable to Investments (other than Available Cash from Real Estate Securities), as determined by the General Partner in its reasonable discretion.
“Available Cash from Real Estate Securities” means that portion of Available Cash attributable to the Partnership’s investments in readily marketable real estate securities, as determined by the General Partner in its reasonable discretion.
“Business Day” means any day except a Saturday, Sunday or other day on which commercial banks in New York, New York are authorized or required by law to be closed.
“Capital Account” means, with respect to any Partner, the Capital Account maintained for such Partner in accordance with the following provisions:
(a)    To each Partner’s Capital Account there shall be added such Partner’s Capital Contributions, such Partner’s share of Net Income and any items in the nature of income or gain which are specially allocated pursuant to Section 6.3, and the amount of any Partnership liabilities assumed by such Partner or which are secured by any property distributed to such Partner.
(b)    From each Partner’s Capital Account there shall be subtracted the amount of cash and the Gross Asset Value of any property distributed to such Partner pursuant to any provision of this Agreement, such Partner’s distributive share of Net Loss and any items in the nature of expenses or losses which are specially allocated pursuant to Section 6.3, and the amount of any liabilities of such Partner assumed by the Partnership or which are secured by any property contributed by such Partner to the Partnership (except to the extent already reflected in the amount of such Partner’s Capital Contribution).
(c)    In the event any interest in the Partnership is transferred in accordance with the terms of this Agreement, the transferee shall succeed to the Capital Account of the transferor to the extent it relates to the transferred interest.
(d)    In determining the amount of any liability for purposes of subsections (a) and (b) hereof, there shall be taken into account Code Section 752(c) and any other applicable provisions of the Code and Regulations.
(e)    The foregoing provisions and the other provisions of this Agreement relating to the maintenance of Capital Accounts are intended to comply with Regulations Sections 1.704-1(b) and 1.704-2, and shall be interpreted and applied in a manner consistent with such Regulations.  In the event the General Partner shall determine that it is prudent to modify the manner in which the Capital Accounts, or any debits or credits thereto (including, without limitation, debits or credits relating to liabilities which are secured by contributed or distributed property or which are assumed by the Partnership, the General 

	
			
	 
	3
	 

Partner, or the Limited Partners) are computed in order to comply with such Regulations, the General Partner may make such modification, provided that it is not likely to have a material effect on the amounts distributable to any Person pursuant to Article 13 of this Agreement upon the dissolution of the Partnership.  The General Partner also shall (i) make any adjustments that are necessary or appropriate to maintain equality between the Capital Accounts of the Partners and the amount of Partnership capital reflected on the Partnership’s balance sheet, as computed for book purposes, in accordance with Regulations Section 1.704-1(b)(2)(iv)(q), and (ii) make any appropriate modifications in the event unanticipated events might otherwise cause this Agreement not to comply with Regulations Section 1.704-1(b) or Section 1.704-2.
“Capital Contribution” means, with respect to any Partner, the amount of money and the initial Gross Asset Value of any property (other than money) contributed to the Partnership by such Partner (net of any liabilities assumed by the Partnership relating to such property and any liability to which such property is subject).
“Capital Proceeds” means the gross receipts received by the Partnership from a Capital Transaction, Change of Control Event or a Listing Event (including any borrowing or other transaction entered into in connection with, or as part of, a Capital Transaction, Change of Control Event or a Listing Event), less any expenses related to the Capital Transaction, Change of Control Event or a Listing Event.
“Capital Transaction” means any transaction outside the ordinary course of the Partnership’s business involving the sale, exchange, other disposition, or refinancing of any Partnership asset.
“Cash Amount” means, with respect to any OP Units subject to a Redemption, an amount of cash equal to the Deemed Partnership Interest Value attributable to such OP Units.
“Certificate” means the Certificate of Limited Partnership relating to the Partnership filed in the office of the Secretary of the State of the State of Delaware, as amended from time to time in accordance with the terms hereof and the Act.
“Change of Control” shall be deemed to have occurred at such time as (i) the date a “person” or “group” (within the meaning of Sections 13(d) and 14(d) of the Exchange Act) becomes the ultimate “beneficial owner” (as defined in Rules 13d-3 and 13d-5 under the Exchange Act, except that a person or group shall be deemed to have beneficial ownership of all shares of voting stock that such person or group has the right to acquire regardless of when such right is first exercisable), directly or indirectly, of voting stock representing more than 50% of the total voting power of the total voting stock of the General Partner; (ii) the date the General Partner sells, transfers or otherwise disposes of all or substantially all of its assets; or (iii) the date of the consummation of a merger or share exchange of the General Partner with another entity where the General Partner’s stockholders immediately prior to the merger or share exchange would not beneficially own, immediately after the merger or share exchange, shares representing 50% or more of all votes (without consideration of the rights of any class of stock to elect directors by a separate group vote) to which all stockholders of the corporation issuing cash or securities in the merger or share exchange would be entitled in the election of directors, or where members of the board of directors of the General Partner immediately prior to the merger or share exchange would not immediately after the merger or share exchange constitute a majority of the board of directors of the corporation issuing cash or securities in the merger or share exchange.
“Change of Control Event” means (i) the date on which another Person acquires more than fifty percent (50%) of the aggregate ordinary voting power represented by the equity securities of the General Partner by purchase or by merger provided that the indirect ownership of the General Partner immediately 

	
			
	 
	4
	 

after the acquisition differs from the direct ownership of the General Partner immediately before the acquisition by more than a de minimis amount; or (ii) the date on which the General Partner merges with another Person provided that the ownership of the entity surviving the merger immediately after the merger differs from the ownership of the General Partner immediately before the merger by more than a de minimis amount.
“Charter” means the Articles of Incorporation of the General Partner filed with the State Department of Assessments and Taxation of Maryland on September 7, 2012, as amended or restated from time to time.
“Class” means a class of REIT Shares or OP Units, as the context may require.
“Class A REIT Shares” means the REIT Shares classified as “Class A” shares in the Charter.
“Class A OP Unit” means an OP Unit entitling the holder thereof to the rights of a holder of a Class A OP Unit as provided in this Agreement.
“Class C REIT Shares” means the REIT Shares classified as “Class C” shares in the Charter.
“Class C OP Unit” means an OP Unit entitling the holder thereof to the rights of a holder of a Class C OP Unit as provided in this Agreement.
“Code” means the Internal Revenue Code of 1986, as amended from time to time or any successor statute thereto.  Any reference herein to a specific section or sections of the Code shall be deemed to include a reference to any corresponding provision of future law.
“Consent” means the consent to, approval of, or vote on a proposed action by a Partner given in accordance with Article 14.
“Consent of the Limited Partners” means the Consent of a Majority in Interest of the Limited Partners, which Consent shall be obtained prior to the taking of any action for which it is required by this Agreement and may be given or withheld by a Majority in Interest of the Limited Partners, unless otherwise expressly provided herein, in their sole and absolute discretion.
“Consent of the Partners” means the Consent of Partners holding Percentage Interests that in the aggregate are equal to or greater than fifty percent (50%) of the aggregate Percentage Interests of all Partners, which Consent shall be obtained prior to the taking of any action for which it is required by this Agreement and may be given or withheld by such Partners, in their sole and absolute discretion.
“Constructively Own” means ownership under the constructive ownership rules described in the Charter.
“Contributed Property” means each property or other asset, in such form as may be permitted by the Act, but excluding cash, contributed or deemed contributed to the Partnership.
“Debt” means, as to any Person, as of any date of determination, (i) all indebtedness of such Person for borrowed money or for the deferred purchase price of property or services; (ii) all amounts owed by such Person to banks or other Persons in respect of reimbursement obligations under letters of credit, surety bonds, guarantees and other similar instruments guaranteeing payment or other performance of obligations by such Person; (iii) all indebtedness for borrowed money or for the deferred purchase 

	
			
	 
	5
	 

price of property or services secured by any lien on any property owned by such Person, to the extent attributable to such Person’s interest in such property, even though such Person has not assumed or become liable for the payment thereof; and (iv) lease obligations of such Person which, in accordance with generally accepted accounting principles, should be capitalized.
“Deemed Partnership Interest Value” means, as of any date with respect to any class of Partnership Interests, the Deemed Value of the Partnership Interests of such class multiplied by the Partner’s relative Percentage Interest of such class.
“Deemed Value of the Partnership Interests” means, as of any date with respect to any class or series of Partnership Interests, (i) the total number of OP Units of the General Partner issued and outstanding as of the close of business on such date multiplied by the Fair Market Value determined as of such date of a share of common stock of the General Partner which corresponds to such Partnership Interest, as adjusted (x) pursuant to Section 7.5 (in the event the General Partner acquires material assets, other than on behalf of the Partnership) and (y) for stock dividends and distributions, stock splits and subdivisions, reverse stock splits and combinations, distribution of warrants or options and distributions of evidences of indebtedness or assets not received by the General Partner pursuant to a pro rata distribution by the Partnership; (ii) divided by the Percentage Interest of the General Partner on such date; provided, that if no outstanding shares of capital stock of the General Partner correspond to a class or series of Partnership Interests, the Deemed Value of the Partnership Interests with respect to such class or series shall be equal to an amount reasonably determined by the General Partner.
“Depreciation” means, for each fiscal year or other period, an amount equal to the depreciation, amortization or other cost recovery deduction allowable with respect to an asset for such year or other period, except that if the Gross Asset Value of an asset differs from its adjusted basis for federal income tax purposes at the beginning of such year or other period, Depreciation shall be an amount which bears the same ratio to such beginning Gross Asset Value as the federal income tax depreciation, amortization or other cost recovery deduction for such year or other period bears to such beginning adjusted tax basis; provided, however, that if the federal income tax depreciation, amortization or other cost recovery deduction for such year is zero, Depreciation shall be determined with reference to such beginning Gross Asset Value using any reasonable method selected by the General Partner.
“ERISA” means the Employee Retirement Income Security Act of 1974, as amended.
“Exchange Act” means the Securities Exchange Act of 1934, as amended, and the rules and regulations of the Securities and Exchange Commission promulgated thereunder and any successor statute thereto.
“Fair Market Value” means, with respect to any share of capital stock of the General Partner, (i) if such shares are listed or admitted to trading on any securities exchange or automated quotation system, the average of the daily market price for the ten (10) consecutive trading days immediately preceding the date with respect to which “Fair Market Value” must be determined hereunder or, if such date is not a Business Day, the immediately preceding Business Day, using as the market price for each such trading day the closing price, regular way, on such day, or if no such sale takes place on such day, the average of the closing bid and asked prices on such day, or (ii) if such shares are not listed or admitted to trading on any securities exchange or automated quotation system, the price at which such shares are then being offered to the public pursuant to any public offering of the General Partner or pursuant to its distribution reinvestment plan (before giving effect to any discounts in effect and made available to participants in such plan); provided that, if there is no ongoing public offering or if the General Partner is not then 

	
			
	 
	6
	 

offering its shares pursuant to a distribution reinvestment plan, the Fair Market Value of such shares shall be determined by the General Partner acting in good faith on the basis of the most recent, publicly reported net asset value of the General Partner and other information as it considers, in its reasonable judgment, appropriate.  In the event the REIT Shares Amount for such shares includes rights that a holder of such shares would be entitled to receive, then the Fair Market Value of such rights shall be determined by the General Partner acting in good faith on the basis of such quotations and other information as it considers, in its reasonable judgment, appropriate; and provided, further that, in connection with determining the Deemed Value of the Partnership Interests for purposes of determining the number of additional OP Units issuable upon a Capital Contribution funded by an underwritten public offering of shares of capital stock of the General Partner, the Fair Market Value of such shares shall be the public offering price per share of such class of capital stock sold.  Notwithstanding the foregoing, the General Partner in its reasonable discretion may use a different “Fair Market Value” for purposes of making the determinations under subparagraph (b) of the definition of “Gross Asset Value” and Section 4.4.D in connection with the contribution of Property or cash to the Partnership by a third party, provided such value shall be based upon the value per REIT Share (or per OP Unit) agreed upon by the General Partner and such third party for purposes of such contribution.
“General Partner Interest” means a Partnership Interest held by the General Partner.  A General Partner Interest may be expressed as a number of OP Units.
“General Partner Net Current Investment” means the General Partner’s total Capital Contributions then paid to the Partnership, plus the amount of any Partnership liabilities assumed by the General Partner (or which are secured by Partnership property distributed to the General Partner), less (i) the amount of any liabilities of the General Partner assumed by the Partnership (or which are secured by property contributed by the General Partner to the Partnership), (ii) all amounts actually distributed to the General Partner pursuant to Section 5.1.B(2), and (iii) all amounts representing a return of capital to the General Partner, including, but not limited to, the portion of any redemption proceeds distributed to the General Partner pursuant to Section 11.8 which represents a return of capital to the General Partner.
“General Partner Priority Return” means an amount equal to six percent (6%) per annum of the Weighted Average General Partner Net Current Investment, payable to the General Partner annually on a cumulative basis.
“General Partner Unpaid Priority Return” means the excess, if any, of the General Partner Priority Return over all amounts previously paid to the General Partner under Section 5.1.A, or paid in respect of the General Partner Priority Return under Section 5.1.B(1) as of the time in question.
“Gross Asset Value” means, with respect to any asset, the asset’s adjusted basis for federal income tax purposes, except as follows:
(a)    The initial Gross Asset Value of any asset contributed by a Partner to the Partnership shall be the gross fair market value of such asset, as determined by the contributing Partner and the General Partner (as set forth on Exhibit A attached hereto, as such Exhibit may be amended from time to time); provided, that if the contributing Partner is the General Partner, then, except with respect to the General Partner’s initial Capital Contribution which shall be determined as set forth on Exhibit A, the determination of the fair market value of the contributed asset shall be determined (i) by the price paid by the General Partner if the asset is acquired by the General Partner contemporaneously with its contribution to the Partnership, (ii) by Appraisal, if otherwise acquired by the General Partner, (iii) by the 

	
			
	 
	7
	 

amount of cash if the asset is cash, and (iv) as reasonably determined by the General Partner if the asset is REIT Shares or other shares of capital stock of the General Partner.
(b)    The Gross Asset Values of all Partnership assets shall be adjusted to equal their respective gross fair market values, as determined by the General Partner using such reasonable method of valuation as it may adopt, provided, however, that for such purpose, the net value of all of the Partnership assets, in the aggregate, shall be equal to the Deemed Value of the Partnership Interests of all classes of Partnership Interests then outstanding, regardless of the method of valuation adopted by the General Partner, immediately prior to the times listed below:
(i)    the acquisition of an additional interest in the Partnership by a new or existing Partner in exchange for more than a de minimis Capital Contribution, if the General Partner reasonably determines that such adjustment is necessary or appropriate to reflect the relative economic interests of the Partners in the Partnership;
(ii)    the distribution by the Partnership to a Partner of more than a de minimis amount of Partnership property as consideration for an interest in the Partnership if the General Partner reasonably determines that such adjustment is necessary or appropriate to reflect the relative economic interests of the Partners in the Partnership;
(iii)    the liquidation of the Partnership within the meaning of Regulations Section 1.704-1(b)(2)(ii)(g);
(iv)    at such other times as the General Partner shall reasonably determine necessary or advisable in order to comply with Regulations Sections 1.704-1(b) and 1.704-2; and
(v)    in connection with the grant of an interest in the Partnership (other than a de minimis interest) as consideration for the provision of services to or for the benefit of the Partnership by an existing Partner acting in a partner capacity or by a new Partner acting in a partner capacity or in anticipation of becoming a Partner.
(c)    The Gross Asset Value of any Partnership asset distributed to a Partner shall be the gross fair market value of such asset on the date of distribution as determined by the distributee and the General Partner, or if the distributee and the General Partner cannot agree on such a determination, by Appraisal.
(d)    The Gross Asset Values of Partnership assets shall be increased (or decreased) to reflect any adjustments to the adjusted basis of such assets pursuant to Code Section 734(b) or Code Section 743(b), but only to the extent that such adjustments are taken into account in determining Capital Accounts pursuant to Regulations Section 1.704-1(b)(2)(iv)(m); provided, however, that Gross Asset Values shall not be adjusted pursuant to this subparagraph (d) to the extent that the General Partner reasonably determines that an adjustment pursuant to subparagraph (b) is necessary or appropriate in connection with a transaction that would otherwise result in an adjustment pursuant to this subparagraph (d).
(e)    If the Gross Asset Value of a Partnership asset has been determined or adjusted pursuant to subparagraph (a), (b) or (d), such Gross Asset Value shall thereafter be adjusted by the Depreciation taken into account with respect to such asset for purposes of computing Net Income and Net Loss.
“Immediate Family Member” means, with respect to any natural Person, such natural Person’s estate or heirs or current spouse or former spouse, parents, parents-in-law, children (whether natural, adopted or by marriage), siblings and grandchildren and any trust or estate, all of the beneficiaries of 

	
			
	 
	8
	 

which consist of such Person or such Person’s spouse or former spouse, parents, parents-in-law, children, siblings or grandchildren.
“Incapacity” or “Incapacitated” means, (i) as to any individual Partner, death, total physical disability or entry by a court of competent jurisdiction adjudicating him or her incompetent to manage his or her Person or his or her estate; (ii) as to any corporation which is a Partner, the filing of a certificate of dissolution, or its equivalent, for the corporation or the revocation of its charter; (iii) as to any partnership which is a Partner, the dissolution and commencement of winding up of the partnership; (iv) as to any estate which is a Partner, the distribution by the fiduciary of the estate’s entire interest in the Partnership; (v) as to any trustee of a trust which is a Partner, the termination of the trust (but not the substitution of a new trustee); or (vi) as to any Partner, the bankruptcy of such Partner.  For purposes of this definition, bankruptcy of a Partner shall be deemed to have occurred when (a) the Partner commences a voluntary proceeding seeking liquidation, reorganization or other relief under any bankruptcy, insolvency or other similar law now or hereafter in effect, (b) the Partner is adjudged as bankrupt or insolvent, or a final and nonappealable order for relief under any bankruptcy, insolvency or similar law now or hereafter in effect has been entered against the Partner, (c) the Partner executes and delivers a general assignment for the benefit of the Partner’s creditors, (d) the Partner files an answer or other pleading admitting or failing to contest the material allegations of a petition filed against the Partner in any proceeding of the nature described in clause (b) above, (e) the Partner seeks, consents to or acquiesces in the appointment of a trustee, receiver or liquidator for the Partner or for all or any substantial part of the Partner’s properties, (f) any proceeding seeking liquidation, reorganization or other relief under any bankruptcy, insolvency or other similar law now or hereafter in effect has not been dismissed within 120 days after the commencement thereof, (g) the appointment without the Partner’s consent or acquiescence of a trustee, receiver or liquidator has not been vacated or stayed within 90 days of such appointment, or (h) an appointment referred to in clause (g) is not vacated within 90 days after the expiration of any such stay.
“Indemnitee” means (i) any Person subject to a claim or demand or made or threatened to be made a party to, or involved or threatened to be involved in, an action, suit or proceeding by reason of his or her status as (A) the General Partner or (B) a director, officer or employee of the Partnership or the General Partner, and (ii) such other Persons (including Affiliates of the General Partner or the Partnership) as the General Partner may designate from time to time (whether before or after the event giving rise to potential liability), in its sole and absolute discretion.
“Investments” means investments made by the Partnership, directly or indirectly, in a Property, Loan or Other Permitted Investment Asset.
“IRS” means the United States Internal Revenue Service.
“Limited Partner” means any Person named as a Limited Partner in Exhibit A attached hereto, as such Exhibit may be amended from time to time, or any Substituted Limited Partner or Additional Limited Partner, in such Person’s capacity as a Limited Partner in the Partnership.
“Limited Partner Interest” means a Partnership Interest of a Limited Partner representing a fractional part of the Partnership Interests of all Limited Partners and includes any and all benefits to which the holder of such a Partnership Interest may be entitled as provided in this Agreement, together with all obligations of such Person to comply with the terms and provisions of this Agreement.  A Limited Partner Interest may be expressed as a number of OP Units.
“Liquidating Event” shall have the meaning set forth in Section 13.1.

	
			
	 
	9
	 

“Liquidator” shall have the meaning set forth in Section 13.2.A.
“Listing Event” means the date on which the REIT Shares are first listed on a national securities exchange or admitted for trading in an automated quotation system.
“Listed Market Value” means the average closing price of the REIT Shares as reported by the primary securities exchange or automated quotations system in which such securities are then listed or admitted to trading for the thirty (30) trading days beginning with the first trading day after the one hundred and eightieth (180th) day after such securities are first listed or admitted to trading; provided, however, that if no sales take place on any of such thirty (30) days, the average of the closing bid and asked prices on such day shall be used.
“Loans” means notes and other evidences of indebtedness or obligations acquired, originated or entered into, directly or indirectly, by the Partnership as lender, noteholder, participant, note purchaser or other capacity, including but not limited to first or subordinate mortgage loans, construction loans, development loans, loan participations, loans secured by capital stock or any other assets or form of equity interest and any other type of loan or financial arrangement, such as providing or arranging for letters of credit, providing guarantees of obligations to third parties, or providing commitments for loans.  Loans shall not include leases which are not recognized as leases for federal income tax reporting purposes.
“Majority in Interest of the Limited Partners” means Limited Partners holding in the aggregate Percentage Interests that are greater than fifty percent (50%) of the aggregate Percentage Interests of all Limited Partners.
“Net Income” or “Net Loss” means for each fiscal year of the Partnership, an amount equal to the Partnership’s taxable income or loss for such fiscal year, determined in accordance with Code Section 703(a) (for this purpose, all items of income, gain, loss, or deduction required to be stated separately pursuant to Code Section 703(a)(1) shall be included in taxable income or loss), with the following adjustments:
(a)    Any income of the Partnership that is exempt from federal income tax and not otherwise taken into account in computing Net Income or Net Loss pursuant to this definition of Net Income or Net Loss shall be added to such taxable income or loss;
(b)    Any expenditures of the Partnership described in Code Section 705(a)(2)(B) or treated as Code Section 705(a)(2)(B) expenditures pursuant to Regulations Section 1.704-1(b)(2)(iv)(i), and not otherwise taken into account in computing Net Income or Net Loss pursuant to this definition of Net Income or Net Loss shall be subtracted from such taxable income or loss;
(c)    In the event the Gross Asset Value of any Partnership asset is adjusted pursuant to subparagraph (b) or subparagraph (c) of the definition of Gross Asset Value, the amount of such adjustment shall be taken into account as gain or loss from the disposition of such asset for purposes of computing Net Income or Net Loss;
(d)    Gain or loss resulting from any disposition of property with respect to which gain or loss is recognized for federal income tax purposes shall be computed by reference to the Gross Asset Value of the property disposed of, notwithstanding that the adjusted tax basis of such property differs from its Gross Asset Value;

	
			
	 
	10
	 

(e)    In lieu of the depreciation, amortization, and other cost recovery deductions taken into account in computing such taxable income or loss, there shall be taken into account Depreciation for such fiscal year;
(f)    To the extent an adjustment to the adjusted tax basis of any Partnership asset pursuant to Code Section 734(b) or Code Section 743(b) is required pursuant to Regulations Section 1.704-1(b)(2)(iv)(m)(4) to be taken into account in determining Capital Accounts as a result of a distribution other than in liquidation of a Partner’s interest in the Partnership, the amount of such adjustment shall be treated as an item of gain (if the adjustment increases the basis of the asset) or loss (if the adjustment decreases the basis of the asset) from the disposition of the asset and shall be taken into account for purposes of computing Net Income or Net Loss; and
(g)    Notwithstanding any other provision of this definition of Net Income or Net Loss, any items which are specially allocated pursuant to Section 6.3 shall not be taken into account in computing Net Income or Net Loss.  The amounts of the items of Partnership income, gain, loss, or deduction available to be specially allocated pursuant to Section 6.3 shall be determined by applying rules analogous to those set forth in this definition of Net Income or Net Loss.
“Net Income from a Capital Transaction” means that portion of Net Income attributable to a Capital Transaction.
“Net Income from Investments” means that portion of Net Income attributable to Investments (other than Net Income from Real Estate Securities), as determined by the General Partner in its reasonable discretion.
“Net Income from Real Estate Securities” means that portion of Net Income attributable to the Partnership’s investments in readily marketable real estate securities, as determined by the General Partner in its reasonable discretion.
“Net Loss from a Capital Transaction” means that portion of Net Loss attributable to a Capital Transaction.
“New Securities” means (i) any rights, options, warrants or convertible or exchangeable securities having the right to subscribe for or purchase REIT Shares or other shares of common stock of the General Partner, or (ii) any Debt issued by the General Partner that provides any of the rights described in clause (i).
“Nonrecourse Deductions” shall have the meaning set forth in Regulations Section 1.704-2(b)(1), and the amount of Nonrecourse Deductions for a Partnership Year shall be determined in accordance with the rules of Regulations Section 1.704-2(c).
“Nonrecourse Liability” shall have the meaning set forth in Regulations Section 1.752-1(a)(2).
“Notice of Redemption” means the Notice of Redemption substantially in the form of Exhibit B to this Agreement.
“OP Unit” means a fractional share of the Partnership Interests of all Partners issued pursuant to Article 4,  including Class A OP Units and Class C OP Units. The allocation of OP Units of each Class among the Partners shall be as set forth on Exhibit A, as such Exhibit may be amended from time to time.

	
			
	 
	11
	 

“Other Permitted Investment Asset” means assets, other than cash, cash equivalents, short term bonds, auction rate securities and similar short term investments, acquired by the Partnership for investment purposes that is not a Loan or a Property and is consistent with the investment objectives and policies of the Partnership.
“Partner” means a General Partner, a Special General Partner, or a Limited Partner, and “Partners” means the General Partner, the Special General Partner and the Limited Partners.
“Partner Minimum Gain” means an amount, with respect to each Partner Nonrecourse Debt, equal to the Partnership Minimum Gain that would result if such Partner Nonrecourse Debt were treated as a Nonrecourse Liability, determined in accordance with Regulations Section 1.704-2(i)(3).
“Partner Nonrecourse Debt” shall have the meaning set forth in Regulations Section 1.704-2(b)(4).
“Partner Nonrecourse Deductions” shall have the meaning set forth in Regulations Section 1.704-2(i)(2), and the amount of Partner Nonrecourse Deductions with respect to a Partner Nonrecourse Debt for a Partnership Year shall be determined in accordance with the rules of Regulations Section 1.704-2(i)(2).
“Partnership” means the limited partnership formed under the Act and pursuant to this Agreement, and any successor thereto.
“Partnership Interest” means, an ownership interest in the Partnership of either a Limited Partner, the Special General Partner, or the General Partner and includes any and all benefits to which the holder of such a Partnership Interest may be entitled as provided in this Agreement, together with all obligations of such Person to comply with the terms and provisions of this Agreement.  There may be one or more classes or series of Partnership Interests as provided in Section 4.4.  Except as otherwise provided for in this Agreement, a Partnership Interest may be expressed as a number of OP Units.  
“Partnership Minimum Gain” shall have the meaning set forth in Regulations Section 1.704-2(b)(2), and the amount of Partnership Minimum Gain, as well as any net increase or decrease in Partnership Minimum Gain, for a Partnership Year shall be determined in accordance with the rules of Regulations Section 1.704-2(d).
“Partnership Record Date” means the record date established by the General Partner for the distribution of Available Cash pursuant to Section 5.1 which record date shall be the same as the record date established by the General Partner for a distribution to its stockholders of some or all of its portion of such distribution.
“Partnership Year” means the fiscal year of the Partnership, which shall be the calendar year.
“Percentage Interest” means, as to a Partner holding a class or series of Partnership Interests, its interest as determined, as of the first day of each Partnership Year, by dividing such Partner’s Adjusted Capital Account Balance by aggregate Adjusted Capital Account Balances of all Partners.  For purposes of the preceding sentence, the Adjusted Capital Account Balances of the Partners shall be determined after giving effect to all allocations of Net Income and Net Loss for all preceding Partnership Years, including allocations of Net Income and Net Loss resulting from adjustments to the Gross Asset Value of the Partnership’s assets pursuant to the definition of Gross Asset Value.

	
			
	 
	12
	 

“Person” means an individual, corporation, partnership, limited liability company, trust, unincorporated organization, association or other entity.
“Plan Asset Regulation” means the regulations promulgated by the United States Department of Labor in Title 29, Code of Federal Regulations, Part 2510, Section 101.3, and any successor regulations thereto.
“Pledge” shall have the meaning set forth in Section 11.3.A.
“Property” or “Properties” means a partial or entire interest in real property (including leasehold interests) and personal or mixed property connected therewith.  An Investment which obligates the Partnership to acquire a Property will be treated as a Property for purposes of this Agreement.
“Qualifying Party” means (a) an Additional Limited Partner; (b) an Immediate Family Member, or a lending institution as the pledgee of a Pledge, who is the transferee in a permitted transfer pursuant to Section 11.3; or (c) a Substituted Limited Partner succeeding to all or part of the Limited Partner Interest of (i) an Additional Limited Partner or (ii) an Immediate Family Member, or a lending institution who is the pledgee of a Pledge, who is the transferee in a permitted transfer pursuant to Section 11.3.
“Qualified REIT Subsidiary” means any Subsidiary of the General Partner that is a “qualified REIT subsidiary” within the meaning of Section 856(i) of the Code.
“Qualified Transferee” means an “Accredited Investor” as such term is defined in Rule 501 promulgated under the Securities Act.
“Redemption” shall have the meaning set forth in Section 8.6.A.
“Regulations” means the Treasury Regulations promulgated under the Code, as such regulations may be amended from time to time (including corresponding provisions of succeeding regulations).
“Regulatory Allocations” shall have the meaning set forth in Section 6.3.
“REIT” means a real estate investment trust, as defined under Sections 856 through 860 of the Code.
“REIT Requirements” shall have the meaning set forth in Section 5.1.
“REIT Share” means a share of common stock, par value $0.001 per share, of the General Partner, including Class A REIT Shares and Class C REIT Shares.
“REIT Shares Amount” means, with respect to Tendered Units of a Class, as of any date, an aggregate number of the corresponding Class of REIT Shares equal to the number of Tendered Units of such Class, as adjusted (x) pursuant to Section 7.5 (in the event the General Partner acquires material assets, other than on behalf of the Partnership) and (y) for stock dividends and distributions, stock splits and subdivisions, reverse stock splits and combinations, distributions of rights, warrants or options, and distributions of evidences of indebtedness or assets relating to assets not received by the General Partner pursuant to a pro rata distribution by the Partnership.
“Securities Act” means the Securities Act of 1933, as amended, and the rules and regulations of the Securities and Exchange Commission promulgated thereunder and any successor statute thereto.

	
			
	 
	13
	 

“Special Fees” means fees or expenses that are required or intended to be borne entirely or disproportionately by one or more particular Classes of OP Units, including but not limited to, selling commissions, dealer manager fees and distribution and shareholder servicing fees.
“Special General Partner Interest” means a Partnership Interest held by the Special General Partner.  A Special General Partner Interest may be expressed as a number of OP Units, but only to the extent that the Special General Partner makes Capital Contributions to the Partnership.

“Special GP Value” means, as of any date of determination, the value of the Special General Partner Interest for purposes of Section 11.7, which shall be equal to the lesser of :  (i) 5.0 times the total distributions of Available Cash paid by the Partnership to the Special General Partner pursuant to Section 5.1.A. in respect of the last completed fiscal year of the Partnership immediately preceding the date of determination; and (ii) the discounted value of expected future distributions of Available Cash payable to the Special General Partner pursuant to Section 5.1.A., based on projections prepared by the General Partner’s Advisor using reasonable assumptions, for the period from the date of determination until March 27, 2025, using as the discount rate for such calculation the weighted average discount rate used by the independent third-party valuation firm retained by the General Partner to determine the fair value of the General Partner’s investment portfolio for purposes of the General Partner’s most recently published estimated asset value per share prior to the date of determination, as adjusted to reflect any dispositions of assets that have occurred after the date as of which such estimated net asset value per share was determined to the date of determination.  
“Specified Redemption Date” means the day of receipt by the General Partner of a Notice of Redemption.
“Subsidiary” means, with respect to any Person, any corporation, partnership, limited liability company, joint venture or other entity of which a majority of (i) the voting power of the voting equity securities or (ii) the outstanding equity interests is owned, directly or indirectly, by such Person.
“Subsidiary Partnership” means any partnership or limited liability company that is a Subsidiary of the Partnership.
“Substituted Limited Partner” means a Person who is admitted as a Limited Partner to the Partnership pursuant to Section 11.4.
“Tax Items” shall have the meaning set forth in Section 6.4.A.
“Tenant” means any tenant from which the General Partner derives rent either directly or indirectly through partnerships, including the Partnership, or Qualified REIT Subsidiaries.
“Tendered Units” shall have the meaning set forth in Section 8.6.A.
“Tendering Partner” shall have the meaning set forth in Section 8.6.A.
“Weighted Average General Partner Net Current Investment” means the annual average balance of the General Partner Net Current Investment computed on a daily basis.

	
			
	 
	14
	 

ARTICLE 2     
ORGANIZATIONAL MATTERS
Section 2.1    Organization.
The Partnership is a limited partnership formed pursuant to the provisions of the Act and upon the terms and conditions set forth in this Agreement.  Except as expressly provided herein, the rights and obligations of the Partners and the administration and termination of the Partnership shall be governed by the Act.  The Partnership Interest of each Partner shall be personal property for all purposes.
Section 2.2    Name.
The name of the Partnership is CPA:18 Limited Partnership.  The Partnership’s business may be conducted under any other name or names deemed advisable by the General Partner, including the name of the General Partner or any Affiliate thereof.  The words “Limited Partnership,” “L.P.,” “Ltd.” or similar words or letters shall be included in the Partnership’s name where necessary for the purposes of complying with the laws of any jurisdiction that so requires.  The General Partner in its sole and absolute discretion may change the name of the Partnership at any time and from time to time and shall notify the Limited Partners of such change in the next regular communication to the Limited Partners.
Section 2.3    Registered Office and Agent; Principal Office.
The name and address of the registered office and registered agent of the Partnership is Corporation Service Company, 2711 Centerville Road, Suite 400, Wilmington, DE 19808.  The principal office of the Partnership is located at 50 Rockefeller Plaza, New York, New York 10020, or such other place as the General Partner may from time to time designate by notice to the other Partners.  The Partnership may maintain offices at such other place or places within or outside the State of Delaware as the General Partner deems advisable.
Section 2.4    Power of Attorney.
A.    Each Limited Partner and each Assignee constitutes and appoints the General Partner, any Liquidator, and authorized officers and attorneys-in-fact of each, and each of those acting singly, in each case with full power of substitution, as its true and lawful agent and attorney-in-fact, with full power and authority in its name, place and stead to:
(1)    execute, swear to, acknowledge, deliver, file and record in the appropriate public offices (a) all certificates, documents and other instruments (including, without limitation, this Agreement and the Certificate and all amendments or restatements thereof) that the General Partner or the Liquidator deems appropriate or necessary to form, qualify or continue the existence or qualification of the Partnership as a limited partnership (or a partnership in which the Limited Partners have limited liability) in the State of Delaware and in all other jurisdictions in which the Partnership may conduct business or own property; (b) all instruments that the General Partner or any Liquidator deems appropriate or necessary to reflect any amendment, change, modification or restatement of this Agreement in accordance with its terms; (c) all conveyances and other instruments or documents that the General Partner or any Liquidator deems appropriate or necessary to reflect the dissolution and liquidation of the Partnership pursuant to the terms of this Agreement, including, without limitation, a certificate of cancellation; (d) all instruments relating to the admission, withdrawal, removal or substitution of any Partner pursuant to, or other events described in, Articles 11, 12 or 13 or the Capital 

	
			
	 
	15
	 

Contribution of any Partner; and (e) all certificates, documents and other instruments relating to the determination of the rights, preferences and privileges of Partnership Interests; and
(2)    execute, swear to, acknowledge and file all ballots, consents, approvals, waivers, certificates and other instruments appropriate or necessary, in the sole and absolute discretion of the General Partner or any Liquidator, to make, evidence, give, confirm or ratify any vote, consent, approval, agreement or other action which is made or given by the Partners hereunder or is consistent with the terms of this Agreement or appropriate or necessary, in the sole discretion of the General Partner or any Liquidator, to effectuate the terms or intent of this Agreement.  Nothing contained herein shall be construed as authorizing the General Partner or any Liquidator to amend this Agreement except in accordance with Article 14 or as may be otherwise expressly provided for in this Agreement.
B.    The foregoing power of attorney is hereby declared to be irrevocable and a power coupled with an interest, in recognition of the fact that each of the Partners will be relying upon the power of the General Partner and any Liquidator to act as contemplated by this Agreement in any filing or other action by it on behalf of the Partnership, and it shall survive and not be affected by the subsequent Incapacity of any Limited Partner or Assignee and the transfer of all or any portion of such Limited Partner’s or Assignee’s OP Units and shall extend to such Limited Partner’s or Assignee’s heirs, successors, assigns and personal representatives.  Each such Limited Partner or Assignee hereby agrees to be bound by any representation made by the General Partner or any Liquidator, acting in good faith pursuant to such power of attorney; and each such Limited Partner or Assignee hereby waives any and all defenses which may be available to contest, negate or disaffirm the action of the General Partner or any Liquidator, taken in good faith under such power of attorney.  Each Limited Partner or Assignee shall execute and deliver to the General Partner or any Liquidator, within 15 days after receipt of the General Partner’s or Liquidator’s request therefor, such further designation, powers of attorney and other instruments as the General Partner or the Liquidator, as the case may be, deems necessary to effectuate this Agreement and the purposes of the Partnership.
Section 2.5    Term.
The term of the Partnership commenced on the date of its formation and the Partnership shall have a perpetual existence unless it is dissolved pursuant to the provisions of Article 13 or as otherwise provided by law.
ARTICLE 3     
PURPOSE
Section 3.1    Purpose and Business.
The purpose and nature of the business to be conducted by the Partnership is to (i) conduct any business that may be lawfully conducted by a limited partnership organized pursuant to the Act, (ii) enter into any partnership, joint venture or other similar arrangement to engage in any business described in the foregoing clause (i) or to own interests in any entity engaged, directly or indirectly, in any such business and (iii) do anything necessary or incidental to the foregoing, provided, however, that such business shall be limited to and conducted in such a manner as to permit the General Partner at all times to be classified as a REIT for federal income tax purposes, unless the General Partner ceases to qualify as a REIT for reasons other than the conduct of the business of the Partnership.  In connection with the foregoing, and without limiting the General Partner’s right in its sole discretion to cease qualifying as a REIT, the 

	
			
	 
	16
	 

Limited Partners acknowledge that the General Partner’s current status as a REIT inures to the benefit of all the Limited Partners and not solely the General Partner.
Section 3.2    Powers.
The Partnership is empowered to do any and all acts and things necessary, appropriate, proper, advisable, incidental to or convenient for the furtherance and accomplishment of the purposes and business described herein and for the protection and benefit of the Partnership, including, without limitation, full power and authority, directly or through its ownership interest in other entities, to enter into, perform and carry out contracts of any kind, borrow money and issue evidences of indebtedness, whether or not secured by mortgage, deed of trust, pledge or other lien, grant guarantees and/or indemnities, acquire, own, manage, improve and develop real property, and lease, sell, transfer and dispose of real property; provided, however, notwithstanding anything to the contrary in this Agreement, the Partnership shall not take, or refrain from taking, any action which, in the judgment of the General Partner, in its sole and absolute discretion, (i) could adversely affect the ability of the General Partner to continue to qualify as a REIT, (ii) absent the consent of the General Partner, which may be given or withheld in its sole and absolute discretion, could subject the General Partner to any taxes under Section 857 or Section 4981 of the Code, or (iii) could violate any law or regulation of any governmental body or agency having jurisdiction over the General Partner or its securities, unless any such action (or inaction) under the foregoing clauses (i), (ii) or (iii) shall have been specifically consented to by the General Partner in writing.
Section 3.3    Partnership only for Purposes Specified.
The Partnership shall be a partnership only for the purposes specified in Section 3.1, and this Agreement shall not be deemed to create a partnership among the Partners with respect to any activities whatsoever other than the activities within the purposes of the Partnership as specified in Section 3.1.  Except as otherwise provided in this Agreement, no Partner shall have any authority to act for, bind, commit or assume any obligation or responsibility on behalf of the Partnership, its properties or any other Partner.  No Partner, in its capacity as a Partner under this Agreement, shall be responsible or liable for any indebtedness or obligation of another Partner, nor shall the Partnership be responsible or liable for any indebtedness or obligation of any Partner, incurred either before or after the execution and delivery of this Agreement by such Partner, except as to those responsibilities, liabilities, indebtedness or obligations incurred pursuant to and as limited by the terms of this Agreement and the Act.
Section 3.4    Representations and Warranties by the Parties.
A.    Each Partner that is an individual represents and warrants to each other Partner that (i) such Partner has the legal capacity to enter into this Agreement and perform such Partner’s obligations hereunder, (ii) the consummation of the transactions contemplated by this Agreement to be performed by such Partner will not result in a breach or violation of, or a default under, any agreement by which such Partner or any of such Partner’s property is or are bound, or any statute, regulation, order or other law to which such Partner is subject, (iii) such Partner is a “United States person” within the meaning of Section 7701(a)(30) of the Code, and (iv) this Agreement is binding upon, and enforceable against, such Partner in accordance with its terms.
B.    Each Partner that is not an individual represents and warrants to each other Partner that (i) its execution and delivery of this Agreement and all transactions contemplated by this Agreement to be performed by it have been duly authorized by all necessary action, including without limitation, that of its general partner(s), committee(s), trustee(s), beneficiaries, directors and/or 

	
			
	 
	17
	 

stockholder(s), as the case may be, as required, (ii) the consummation of such transactions shall not result in a breach or violation of, or a default under, its certificate of limited partnership, partnership agreement, trust agreement, limited liability company operating agreement, charter or bylaws, as the case may be, any agreement by which such Partner or any of such Partner’s properties or any of its partners, beneficiaries, trustees or stockholders, as the case may be, is or are bound, or any statute, regulation, order or other law to which such Partner or any of such Partner’s properties or any of its partners, trustees, beneficiaries or stockholders, as the case may be, is or are subject, (iii) such Partner is a “United States person” within the meaning of Section 7701(a)(30) of the Code and (iv) this Agreement is binding upon, and enforceable against, such Partner in accordance with its terms.
C.    Each Partner represents, warrants, and agrees that it has acquired and continues to hold its interest in the Partnership for its own account for investment only and not for the purpose of, or with a view toward, the resale or distribution of all or any part thereof, nor with a view toward selling or otherwise distributing such interest or any part thereof at any particular time or under any predetermined circumstances.  Each Partner further represents and warrants that it is a sophisticated investor, able and accustomed to handling sophisticated financial matters for itself, particularly real estate investments, and that it has a sufficiently high net worth that it does not anticipate a need for the funds it has invested in the Partnership in what it understands to be a highly speculative and illiquid investment.  Each Partner represents, warrants and agrees that such Partner is an “accredited investor” (as such term is defined in Rule 501(a) of Regulation D under the Securities Act).
D.    Each Partner acknowledges that (i) the OP Units (and any REIT Shares that might be exchanged therefor) have not been registered under the Securities Act and may not be transferred unless they are subsequently registered under the Securities Act or an exemption from such registration is available (it being understood that the Partnership has no intention of so registering the OP Units), (ii) a restrictive legend in the form set forth in Exhibit C shall be placed on the certificates representing the OP Units, and (iii) a notation shall be made in the appropriate records of the Partnership indicating that the OP Units are subject to restrictions on transfer.
E.    Each Limited Partner further represents, warrants, covenants and agrees as follows:
(1)    Except as provided in Exhibit D, at any time such Partner actually or Constructively Owns a 25% or greater capital interest or profits interest in the Partnership, it does not and will not, without the prior written consent of the General Partner, actually own or Constructively Own (a) with respect to any Tenant that is a corporation, any stock of such Tenant, and (b) with respect to any Tenant that is not a corporation, any interests in either the assets or net profits of such Tenant.
(2)    Except as provided in Exhibit E, at any time such Partner actually or Constructively Owns a 25% or greater capital interest or profits interest in the Partnership, it does not, and agrees that it will not without the prior written consent of the General Partner, actually own or Constructively Own, any stock in the General Partner, other than any REIT Shares or other shares of capital stock of the General Partner such Partner may acquire as a result of an exchange of Tendered Units pursuant to Section 8.6, subject to the ownership limitations set forth in the General Partner’s Charter.
(3)    Upon request of the General Partner, it will disclose to the General Partner the amount of REIT Shares or other shares of capital stock of the General Partner that it actually owns or Constructively Owns.

	
			
	 
	18
	 

(4)    It understands that if, for any reason, (a) the representations, warranties or agreements set forth in E(1) or (2) above are violated, or (b) the Partnership’s actual or Constructive Ownership of REIT Shares or other shares of capital stock of the General Partner violates the limitations set forth in the Charter, then (x) some or all of the Redemption rights of the Partners may become non-exercisable, and (y) some or all of the REIT Shares owned by the Partners may be automatically transferred to a trust for the benefit of a charitable beneficiary, as provided in the Charter.
(5)    Without the consent of the General Partner, which may be given or withheld in its sole discretion, no Partner shall take any action that would cause the Partnership at any time to have more than 100 partners (including as partners those persons indirectly owning an interest in the Partnership through a partnership, limited liability company, S corporation or grantor trust (such entity, a “flow through entity”), but only if substantially all of the value of such person’s interest in the flow through entity is attributable to the flow through entity’s interest (direct or indirect) in the Partnership).
F.    The representations and warranties contained in Section 3.4 shall survive the execution and delivery of this Agreement by each Partner and the dissolution and winding-up of the Partnership.
G.    Each Partner hereby acknowledges that no representations as to potential profit, cash flows, funds from operations or yield, if any, in respect of the Partnership or the General Partner have been made by any Partner or any employee or representative or Affiliate of any Partner, and that projections and any other information, including, without limitation, financial and descriptive information and documentation, which may have been in any manner submitted to such Partner shall not constitute any representation or warranty of any kind or nature, express or implied.
Section 3.5    Certain ERISA Matters.
Each Partner acknowledges that the Partnership is intended to qualify as a “real estate operating company” (as such term is defined in the Plan Asset Regulation).  The General Partner may structure investments in, relationships with and conduct with respect to Investments and any other assets of the Partnership so that the Partnership will be a “real estate operating company” (as such term is defined in the Plan Asset Regulation).
ARTICLE 4     
CAPITAL CONTRIBUTIONS
Section 4.1    Capital Contributions of the Partners.
At the time of their respective execution of this Agreement, the Partners shall make or shall have made Capital Contributions as set forth in Exhibit A to this Agreement.  The Partners shall own OP Units of the class or series and in the amounts set forth in Exhibit A and shall have a Percentage Interest in the Partnership as set forth in Exhibit A, which Percentage Interest shall be adjusted in Exhibit A from time to time by the General Partner to the extent necessary to reflect accurately exchanges, redemptions, Capital Contributions, the issuance of additional OP Units or similar events having an effect on a Partner’s Percentage Interest.  Except as required by law, as otherwise provided in Sections 4.4, 4.5 and 10.5, or as otherwise agreed to by a Partner and the Partnership, no Partner shall be required or permitted to make any additional Capital Contributions or loans to the Partnership.

	
			
	 
	19
	 

Section 4.2    Classes of OP Units.  The General Partner is hereby authorized to cause the Partnership to issue OP Units designated as Class A OP Units and Class C OP Units. Each such Class shall have the rights and obligations attributed to that Class under this Agreement.  
Section 4.3    Loans by Third Parties.
Subject to Section 4.4, the Partnership may incur Debt, or enter into other similar credit, guarantee, financing or refinancing arrangements for any purpose (including, without limitation, in connection with any further acquisition of Investments) with any Person that is not the General Partner upon such terms as the General Partner determines appropriate; provided that, the Partnership shall not incur any Debt that is recourse to the General Partner, except to the extent otherwise agreed to by the General Partner in its sole discretion.
Section 4.4    Additional Funding and Capital Contributions.
A.    General.  The General Partner may, at any time and from time to time determine that the Partnership requires additional funds (“Additional Funds”) for the acquisition of additional Investments or for such other Partnership purposes as the General Partner may determine.  Additional Funds may be raised by the Partnership, at the election of the General Partner, in any manner provided in, and in accordance with, the terms of this Section 4.4.  No Person shall have any preemptive, preferential or similar right or rights to subscribe for or acquire any Partnership Interest, except as set forth in this Section 4.4.
B.    Issuance of Additional Partnership Interests.  The General Partner, in its sole and absolute discretion, may raise all or any portion of the Additional Funds by accepting additional Capital Contributions of cash.  The General Partner may also accept additional Capital Contributions of real property or any other non-cash assets.  In connection with any such additional Capital Contributions (of cash or property), the General Partner is hereby authorized to cause the Partnership from time to time to issue to Partners (including the General Partner) or other Persons (including, without limitation, in connection with the contribution of property to the Partnership) additional OP Units or other Partnership Interests in one or more classes, or one or more series of any of such classes, with such designations, preferences and relative, participating, optional or other special rights, powers, and duties, including rights, powers, and duties senior to then existing Limited Partner Interests, all as shall be determined by the General Partner in its sole and absolute discretion subject to Delaware law, and as set forth by amendment to this Agreement, including without limitation, (i) the allocations of items of Partnership income, gain, loss, deduction, and credit to such class or series of Partnership Interests; (ii) the right of each such class or series of Partnership Interests to share in Partnership distributions; (iii) the rights of each such class or series of Partnership Interests upon dissolution and liquidation of the Partnership; and (iv) the right to vote, including, without limitation, the Limited Partner approval rights set forth in Section 11.2.A; provided, that no such additional OP Units or other Partnership Interests shall be issued to the General Partner unless either (a)(1) the additional Partnership Interests are issued in connection with the grant, award, or issuance of shares of the General Partner pursuant to Section 4.4.C below, which shares have designations, preferences, and other rights (except voting rights) such that the economic interests attributable to such shares are substantially similar to the designations, preferences and other rights of the additional Partnership Interests issued to the General Partner in accordance with this Section 4.4.B, and (2) the General Partner shall make a Capital Contribution to the Partnership in an amount equal to the net proceeds raised in connection with such issuance, or (b) the additional Partnership Interests are issued to all Partners holding Partnership Interests in the same class in proportion to their respective Percentage Interests in such class.  The General Partner’s determination that consideration is 

	
			
	 
	20
	 

adequate shall be conclusive insofar as the adequacy of consideration relates to whether the Partnership Interests are validly issued and paid.  In the event that the Partnership issues additional Partnership Interests pursuant to this Section 4.4.B, the General Partner shall make such revisions to this Agreement (including but not limited to the revisions described in Section 5.4 and Section 8.6) as it determines are necessary to reflect the issuance of such additional Partnership Interests.  Without limiting the foregoing, the General Partner is expressly authorized to cause the Partnership to issue OP Units for less than fair market value, so long as the General Partner concludes in good faith that such issuance of Partnership Interests is in the best interests of the Partnership.
C.    Issuance of REIT Shares or Other Securities by the General Partner.  The General Partner shall not issue any additional REIT Shares, other shares of capital stock of the General Partner or New Securities (other than REIT Shares issued pursuant to Section 8.6 or such shares, stock or securities pursuant to a dividend or distribution (including any stock split) to all of its stockholders or all of its stockholders who hold a particular class of stock of the General Partner) unless (i) the General Partner shall cause the Partnership to issue to the General Partner, Partnership Interests or rights, options, warrants or convertible or exchangeable securities of the Partnership having designations, preferences and other rights, all such that the economic interests thereof are substantially similar to those of the REIT Shares, other shares of capital stock of the General Partner or New Securities issued by the General Partner and (ii) the General Partner shall make a Capital Contribution of the net proceeds from the issuance of such additional REIT Shares, other shares of capital stock or New Securities, as the case may be, and from the exercise of the rights contained in such additional New Securities, as the case may be.  Without limiting the foregoing, the General Partner is expressly authorized to issue REIT Shares of any Class (or combination of any Class), other shares of capital stock of the General Partner or New Securities for no tangible value or for less than fair market value, and the General Partner is expressly authorized to cause the Partnership to issue to the General Partner Partnership Interests of the corresponding Class, so long as (x) the General Partner concludes in good faith that such issuance of Partnership Interests is in the interests of the Partnership; and (y) the General Partner contributes all proceeds, if any, from such issuance and exercise to the Partnership.  In connection with the General Partner’s initial offering of REIT Shares, any other issuance of REIT Shares, other capital stock of the General Partner or New Securities, the General Partner shall contribute to the Partnership, any net proceeds raised in connection with such issuance; provided, that the General Partner may use a portion of the net proceeds from any offering to acquire OP Units or other assets (provided such other assets are contributed to the Partnership pursuant to the terms of this Agreement; and provided further that if the net proceeds actually received by the General Partner are less than the gross proceeds of such issuance as a result of any underwriter’s discount or other expenses paid or incurred in connection with such issuance then, except to the extent such net proceeds are used to acquire OP Units, the General Partner shall be deemed to have made a Capital Contribution to the Partnership in the amount equal to the sum of the net proceeds of such issuance plus the amount of such underwriter’s discount and other expenses paid by the General Partner (which discount and expense shall be treated as an expense for the benefit of the Partnership for purposes of Section 7.4)).
D.    Percentage Interest Adjustments in the Case of Capital Contributions for OP Units.  Upon the acceptance of additional Capital Contributions in exchange for OP Units, the Percentage Interest in such OP Units shall be equal to a fraction, the numerator of which is equal to the amount of cash and the Agreed Value of the Property contributed as of the time such additional Capital Contributions are made (i.e., the Adjustment Date) and the denominator of which is equal to the sum of (i) the Deemed Value of the Partnership Interests of such class or series (computed as of the Business Day immediately preceding the Adjustment Date) and (ii) the aggregate Agreed Value of additional Capital Contributions contributed by all Partners and/or third parties to the Partnership on such Adjustment Date in such class or series of Partnership Interests.  The Percentage Interest of each other Partner holding Partnership Interests 

	
			
	 
	21
	 

of such class or series not making a full pro rata Capital Contribution shall be adjusted to equal a fraction, the numerator of which is equal to the sum of (i) the Deemed Partnership Interest Value of such Limited Partner in respect of such class or series (computed as of the Business Day immediately preceding the Adjustment Date) and (ii) the Agreed Value of additional Capital Contributions, if any, made by such Partner to the Partnership in such class or series of Partnership Interests as of such Adjustment Date, and the denominator of which is equal to the sum of (i) the Deemed Value of the Partnership Interests of such class or series (computed as of the Business Day immediately preceding the Adjustment Date), plus (ii) the aggregate Agreed Value of additional Capital Contributions contributed by all Partners and/or third parties to the Partnership on such Adjustment Date in such class or series.  Provided, however, solely for purposes of calculating a Partner’s Percentage Interest pursuant to this Section 4.4.D, (i) in the case of cash Capital Contributions by the General Partner funded by an offering of REIT Shares or other shares of capital stock of the General Partner and (ii) in the case of the contribution of properties by the General Partner which were acquired by the General Partner in exchange for REIT Shares or other shares of capital stock of the General Partner immediately prior to such contribution, the General Partner shall be issued a number of OP Units equal and corresponding to the number of such shares issued by the General Partner in exchange for such cash or Investments, the OP Units held by the other Partners shall not be adjusted, and the Partners’ Percentage Interests shall be adjusted accordingly.  The General Partner shall promptly give each Partner written notice of its Percentage Interest, as adjusted.
E.    Reinvestment of Special General Partner Distributions.  The Special General Partner, in its sole and absolute discretion, may elect, on an annual basis, to reinvest all, or any portion, of the distributions of Available Cash and Capital Proceeds it receives under Section 5.1 in the Partnership in exchange for the issuance of OP Units.  If the Special General Partner elects to reinvest any portion of Available Cash and Capital Proceeds distributed to the Special General Partner under this Agreement, the Special General Partner shall be treated no differently than any Limited Partner making a Capital Contribution to the Partnership under Section 4.4.
Section 4.5    Other Contribution Provisions.
With the consent of the General Partner, in its sole discretion, one or more Limited Partners may enter into agreements with the Partnership, in the form of a guarantee or contribution agreement, which have the effect of providing a guarantee of certain obligations of the Partnership.
Section 4.6    No Preemptive Rights.
Except to the extent expressly granted by the Partnership pursuant to another agreement, no Person shall have any preemptive, preferential or other similar right with respect to (i) providing funds to the Partnership or (ii) issuance or sale of any OP Units or other Partnership Interests.
Section 4.7    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 4.8    Profits Interest of Special General Partner.
To the extent that the Special General Partner receives a Partnership Interest with a disproportionate interest in Partnership Net Income or Net Loss, such Partnership Interest shall be treated 

	
			
	 
	22
	 

as a “profits interest” received for services rendered, or to be rendered, within the meaning of IRS Rev. Proc. 93-27, 1993-2 C.B. 343. 
Section 4.9    Special Fees.
The Partners acknowledge and agree that the following Special Fees shall be borne by the Classes of OP Units as follows:
7.00% selling commission for each Class A OP Unit
1.50% selling commission for each Class C OP Unit
3.00% dealer manager fee for each Class A OP Unit
2.25% dealer manager fee for each Class C OP Unit
1.00% annual distribution and shareholder servicing fee for each Class C OP Unit (other than Class C OP Units issued in connection with Class C REIT Shares purchased through the General Partner’s distribution and reinvestment plan) 

ARTICLE 5     
DISTRIBUTIONS
Section 5.1    Requirement and Characterization of Distributions.
The General Partner shall cause the Partnership to distribute at least quarterly all, or such portion as the General Partner may in its discretion determine, Available Cash and Capital Proceeds generated by the Partnership to the Partners who are Partners on the applicable Partnership Record Date with respect to such distribution, in the following order and priority:
C.    Available Cash.
(1)    First, Available Cash from Investments shall be distributed ten percent (10%) to the Special General Partner, and ninety percent (90%) to the Partners in proportion to their respective Percentage Interests; and
(2)    Second, Available Cash from Real Estate Securities shall be distributed one hundred percent (100%) to the Partners in proportion to their respective Percentage Interests.
D.    Distribution of Capital Proceeds.  Subject to Section 5.1.C, Section 5.1.D and Section 13.2, distributions of Capital Proceeds shall be made as follows:
(1)    First, Capital Proceeds shall be distributed one hundred percent (100%) to the General Partner until the General Partner has received distributions under this Section 5.1.B(1) equal to the General Partner Unpaid Priority Return;
(2)    Second, Capital Proceeds shall be distributed one hundred percent (100%) to the General Partner until the General Partner Net Current Investment has been reduced to zero; and

	
			
	 
	23
	 

(3)    Third, any remaining Capital Proceeds shall be distributed fifteen percent (15%) to the Special General Partner and eighty-five percent (85%) to the Partners in proportion to their respective Percentage Interests.
Notwithstanding any other provision of this Article 5 to the contrary, the General Partner shall take such reasonable efforts, as determined by it in its sole and absolute discretion and consistent with its qualification as a REIT, to cause the Partnership to distribute sufficient amounts to enable the General Partner, for so long as the General Partner has determined to qualify as a REIT, to pay stockholder dividends that will (a) satisfy the requirements for qualifying as a REIT under the Code and Regulations (“REIT Requirements”), and (b) except to the extent otherwise determined by the General Partner, avoid the imposition of any federal income or excise tax liability on the General Partner.
E.    Distribution of Capital Proceeds – Listing Event.  As soon as possible following the determination of the Listed Market Value following a Listing Event, the General Partner shall cause the Partnership to make a special distribution of Capital Proceeds to the Special General Partner in an amount equal to the Capital Proceeds distributable solely to the Special General Partner under Section 5.1.B if the Partnership sold all of its assets on the date of the Listing Event for its Listed Market Value and distributed the net proceeds from such sale to the Partners pursuant to Section 5.1.B.  To avoid duplicating distributions to the Special General Partner, the General Partner shall take into account distributions made to the Special General Partner pursuant to this Section 5.1.C in determining the appropriate amount of any subsequent distributions of Capital Proceeds to the Special General Partner under Section 5.1.B(3) and Section 5.1.D. 
F.    Distribution of Capital Proceeds – Change of Control Event.  As soon as possible following the occurrence of a Change of Control Event, the General Partner, or its successor in interest, shall cause the Partnership, or its successor in interest, to make a special distribution of Capital Proceeds to the Special General Partner in an amount equal to the Capital Proceeds distributable solely to the Special General Partner under Section 5.1.B if the Partnership sold all of its assets for their fair value (less the amount of all indebtedness secured by such assets and less any fees payable to the Advisor under the Advisory Agreement) immediately prior to the Change of Control Event and distributed the net proceeds from such sale to the Partners pursuant to Section 5.1.B.  The fair value of any Property shall be its value as determined by an Appraisal.  To avoid duplicating distributions made to the Special General Partner, the General Partner shall take into account distributions made to the Special General Partner pursuant to this Section 5.1.D in determining the appropriate amount of any subsequent distributions of Capital Proceeds to the Special General Partner under Section 5.1.B(3) and Section 5.1.C. 
G.    Special Fees.  Consistent with Section 4.9, if the Partnership directly or indirectly incurs Special Fees, (i) Available Cash or Capital Proceeds, as the case may be, available for distribution under this Section 5.1 shall be increased by the Special Fees to the extent that Available Cash or Capital Proceeds have been previously reduced by such fees; and (ii) the amounts otherwise distributable among the Classes of OP Units shall then be reduced to reflect their appropriate shares of the Special Fees.  For example, if the Partnership has Available Cash of $1,000 after taking into account a distribution and shareholder servicing fee of $200 that is required to be borne entirely by the Partners holding Class C OP Units, Available Cash shall be increased to $1,200 for purposes of this Section 5.1 and the amounts otherwise distributable to the Class C OP Units under this Section 5.1 shall be reduced by $200.

	
			
	 
	24
	 

Section 5.2    Distributions in Kind.
Except as expressly provided herein, no right is given to any Partner to demand and receive property other than cash.  The General Partner may determine, in its sole and absolute discretion, to make a distribution in-kind to the Partners of Partnership assets, and such assets shall be distributed in such a fashion as to ensure that the fair market value is distributed and allocated in accordance with Articles 5, 6 and 10.
Section 5.3    Distributions upon Liquidation.
Notwithstanding Section 5.1, proceeds from a Liquidating Event shall be distributed to the Partners in accordance with Section 13.2.
Section 5.4    Distributions to Reflect Issuance of Additional Partnership Interests.
In the event that the Partnership issues additional Partnership Interests to the General Partner, the Special General Partner, or any Additional Limited Partner pursuant to Section 4.4.B, 4.4.C, or 4.4.E, the General Partner shall make such revisions to this Article 5 as it determines are necessary to reflect the issuance of such additional Partnership Interests.  In the absence of any agreement to the contrary, an Additional Limited Partner shall be entitled to the distributions set forth in Section 5.1 (without regard to this Section 5.4) with respect to the period during which the closing of its contribution to the Partnership occurs, multiplied by a fraction the numerator of which is the number of days from and after the date of such closing through the end of the applicable period, and the denominator of which is the total number of days in such period.
Section 5.5    Distribution Limitation.
Notwithstanding any other provision in this Article 5, the General Partner shall have the power, in its reasonable discretion, to adjust the distributions to the Special General Partner to the extent necessary to avoid violations of the “2%/25% Guidelines” as described in the Advisory Agreement.
ARTICLE 6     
ALLOCATIONS
Section 6.1    Timing and Amount of Allocations of Net Income and Net Loss.
Net Income and Net Loss of the Partnership shall be determined and allocated with respect to each Partnership Year of the Partnership as of the end of each such year.  Subject to the other provisions of this Article 6, an allocation to a Partner of a share of Net Income or Net Loss shall be treated as an allocation of the same share of each item of income, gain, loss or deduction that is taken into account in computing Net Income or Net Loss.

	
			
	 
	25
	 

Section 6.2    General Allocations.
F.    Allocation of Net Income and Net Loss Other Than From a Capital Transaction.
(1)    Net Income other than from a Capital Transaction.  Except as otherwise provided in Section 6.3, Net Income other than from a Capital Transaction for any Partnership Year shall be allocated to the Partners in the following manner and order of priority:
(a)    First, Net Income from Investments shall be allocated ten percent (10%) to the Special General Partner, and ninety percent (90%) to the Partners in proportion to their respective Percentage Interests; and
(b)    Second, Net Income from Real Estate Securities shall be allocated one hundred percent (100%) to the Partners in proportion to their respective Percentage Interests.
(2)    Net Loss other than from a Capital Transaction.  Except as otherwise provided in Section 6.3, Net Loss other than from a Capital Transaction for any Partnership Year shall be allocated to the Partners in the following manner and order of priority:
(a)    First, to the Partners, in proportion to their relative allocations of Net Income other than from a Capital Transaction pursuant to Section 6.2.A(1) until the aggregate allocations of Net Loss other than from a Capital Transaction pursuant to this Section 6.2.A(2) for all Partnership Years equal the aggregate allocations of Net Income other than from a Capital Transaction pursuant to Section 6.2.A(1) for all prior Partnership Years;
(b)    Second, to the Partners in proportion to their respective Adjusted Capital Account Balances until the Adjusted Capital Account Balance of each such Partner is zero; and
(c)    Third, to each of the Partners in proportion to their respective Percentage Interests.
G.    Allocation of Net Income and Net Loss From a Capital Transaction.
(1)    Net Income from a Capital Transaction.  Except as otherwise provided in Section 6.2.D and Section 6.3, Net Income from a Capital Transaction for any Partnership Year shall be allocated to the Partners in the following manner and order of priority:
(d)    First, to the Partners, in proportion to their relative allocations of Net Loss from a Capital Transaction pursuant to Section 6.2.B(2)(b) and (c) until the aggregate allocations of Net Income from a Capital Transaction pursuant to this Section 6.2.B(1)(a) for all Partnership Years equal the aggregate allocations of Net Loss from a Capital Transaction pursuant to Section 6.2.B(2)(b) and (c) for all prior Partnership Years;
(e)    Second, one hundred percent (100%) to the General Partner until the Adjusted Capital Account Balance of the General Partner equals the sum of the General Partner Net Current Investment and the General Partner Unpaid Priority Return; and

	
			
	 
	26
	 

(f)    Third, fifteen percent (15%) to the Special General Partner, and eighty-five percent (85%) to the Partners in proportion to their respective Percentage Interests.
(2)    Net Loss from a Capital Transaction.  Except as otherwise provided in Section 6.3, Net Loss from a Capital Transaction for any Partnership Year shall be allocated to the Partners in the following manner and order of priority:
(a)    First, to the Partners, in proportion to their relative allocations of Net Income from a Capital Transaction pursuant to Section 6.2.B(1)(c) until the aggregate allocations of Net Loss from a Capital Transaction pursuant to this Section 6.2.B(2)(a) for all Partnership Years equal the aggregate allocations of Net Income from a Capital Transaction pursuant to Section 6.2.B(1)(c) for all prior Partnership Years;
(b)    Second, to the Partners in proportion to their respective Adjusted Capital Account Balances until the Adjusted Capital Account Balance of each such Partner is zero; and
(c)    Third, to the Partners in proportion to their respective Percentage Interests.
H.    Allocations to Reflect Issuance of Additional Partnership Interests.  In the event that the Partnership issues additional Partnership Interests to the General Partner, the Special General Partner, a Limited Partner or any Additional Limited Partner pursuant to Section 4.4, the General Partner shall make such revisions to this Section 6.2 as it determines are necessary to reflect the terms of the issuance of such additional Partnership Interests, including making preferential allocations to certain classes of Partnership Interests, in accordance with any method selected by the General Partner.
I.    Allocations Related to a Listing Event.  If a Listing Event occurs, the Partnership shall allocate Net Income from a Capital Transaction first to the Special General Partner in an amount equal to the Net Income from a Capital Transaction allocable to the Special General Partner under Section 6.2.B(1) if the Partnership sold all of its assets on the date of the Listing Event for its Listed Market Value and allocated the gain from such sale to the Partners pursuant to Section 6.2.B(1).  To avoid duplicating allocations to the Special General Partner, the General Partner shall take into account allocations made to the Special General Partner pursuant to this Section 6.2.D in determining the appropriate amount of any subsequent allocations of Net Income from a Capital Transaction to the Special General Partner under Section 6.2.B(1) and Section 6.2.E.
J.    Allocations Related to a Change of Control Event.  If a Change of Control Event occurs, the Partnership shall allocate Net Income from a Capital Transaction first to the Special General Partner in an amount equal to the Net Income from a Capital Transaction allocable to the Special General Partner under Section 6.2.B(1) if the Partnership sold all of its assets on the date of the Change of Control Event for their fair value (less the amount of all indebtedness secured by such assets and less any fees payable to the Advisor under the Advisory Agreement) immediately prior to the Change of Control Event and allocated the gain from such sale to the Partners pursuant to Section 6.2.B(1).  To avoid duplicating allocations to the Special General Partner, the General Partner shall take into account allocations made to the Special General Partner pursuant to this Section 6.2.E in determining the appropriate amount of any subsequent allocations of Net Income from a Capital Transaction to the Special General Partner under Section 6.2.B(1) and Section 6.2.D.

	
			
	 
	27
	 

Section 6.3    Regulatory Allocations.
Notwithstanding the foregoing provisions of this Article 6:
(i)    Minimum Gain Chargeback.  Except as otherwise provided in Regulations Section 1.704-2(f), notwithstanding the provisions of Section 6.2, or any other provision of this Article 6, if there is a net decrease in Partnership Minimum Gain during any Partnership Year, each Partner shall be specially allocated items of Partnership income and gain for such year (and, if necessary, subsequent years) in an amount equal to such Partner’s share of the net decrease in Partnership Minimum Gain, as determined under Regulations Section 1.704-2(g).  Allocations pursuant to the previous sentence shall be made in proportion to the respective amounts required to be allocated to each Partner pursuant thereto.  The items to be allocated shall be determined in accordance with Regulations Sections 1.704-2(f)(6) and 1.704-2(j)(2).  This Section 6.3(i) is intended to qualify as a “minimum gain chargeback” within the meaning of Regulation Section 1.704-2(f) which shall be controlling in the event of a conflict between such Regulation and this Section 6.3(i).
(ii)    Partner Minimum Gain Chargeback.  Except as otherwise provided in Regulations Section 1.704-2(i)(4), and notwithstanding the provisions of Section 6.2, or any other provision of this Article 6 (except Section 6.3(i)), if there is a net decrease in Partner Minimum Gain attributable to a Partner Nonrecourse Debt during any Partnership Year, each Partner who has a share of the Partner Minimum Gain attributable to such Partner Nonrecourse Debt, determined in accordance with Regulations Section 1.704-2(i)(5), shall be specially allocated items of Partnership income and gain for such year (and, if necessary, subsequent years) in an amount equal to such Partner’s share of the net decrease in Partner Minimum Gain attributable to such Partner Nonrecourse Debt, determined in accordance with Regulations Section 1.704-2(i)(4).  Allocations pursuant to the previous sentence shall be made in proportion to the respective amounts required to be allocated to each Partner pursuant thereto.  The items to be so allocated shall be determined in accordance with Regulations Sections 1.704-2(i)(4) and 1.704-2(j)(2).  This Section 6.3(ii) is intended to qualify as a “chargeback of partner nonrecourse debt minimum gain” within the meaning of Regulation Section 1.704-2(i) which shall be controlling in the event of a conflict between such Regulation and this Section 6.3(ii).
(iii)    Nonrecourse Deductions and Partner Nonrecourse Deductions.  Any Nonrecourse Deductions for any Partnership Year shall be specially allocated to the Partners in accordance with their respective Percentage Interests.  Any Partner Nonrecourse Deductions for any Partnership Year shall be specially allocated to the Partner(s) who bears the economic risk of loss with respect to the Partner Nonrecourse Debt to which such Partner Nonrecourse Deductions are attributable, in accordance with Regulations Sections 1.704-2(b)(4) and 1.704-2(i).
(iv)    Qualified Income Offset.  If any Partner unexpectedly receives an adjustment, allocation or distribution described in Regulations Section 1.704-1(b)(2)(ii)(d)(4), (5) or (6), items of Partnership income and gain shall be allocated, in accordance with Regulations Section 1.704-1(b)(2)(ii)(d), to the Partner in an amount and manner sufficient to eliminate, to the extent required by such Regulations, the Adjusted Capital Account Deficit of the Partner as quickly as possible provided that an allocation pursuant to this Section 6.3(iv) shall be made if and only to the extent that such Partner would have an Adjusted Capital Account Deficit after all other allocations provided in this Article 6 have been tentatively made as if this Section 6.3(iv) were not in this Agreement.  It is intended that this Section 6.3(iv) qualify and be construed as a “qualified income offset” within the meaning of Regulations 1.704-1(b)(2)(ii)(d), which shall be controlling in the event of a conflict between such Regulations and this Section 6.3(iv).

	
			
	 
	28
	 

(v)    Gross Income Allocation.  In the event any Partner has a deficit Capital Account at the end of any Partnership Year which is in excess of the sum of (1) the amount (if any) such Partner is obligated to restore to the Partnership, and (2) the amount such Partner is deemed to be obligated to restore pursuant to Regulations Section 1.704-1(b)(2)(ii)(c) or the penultimate sentences of Regulations Sections 1.704-2(g)(1) and 1.704-2(i)(5), each such Partner shall be specially allocated items of Partnership income and gain in the amount of such excess as quickly as possible, provided, that an allocation pursuant to this Section 6.3(v) shall be made if and only to the extent that such Partner would have a deficit Capital Account in excess of such sum after all other allocations provided in this Article 6 have been tentatively made as if this Section 6.3(v) and Section 6.3(iv) were not in this Agreement.
(vi)    Limitation on Allocation of Net Loss.  To the extent any allocation of Net Loss would cause or increase an Adjusted Capital Account Deficit as to any Partner, such allocation of Net Loss shall be reallocated among the other Partners in accordance with their respective Percentage Interests, subject to the limitations of this Section 6.3(vi).
(vii)    Section 754 Adjustment.  To the extent an adjustment to the adjusted tax basis of any Partnership asset pursuant to Code Section 734(b) or Code Section 743(b) is required, pursuant to Regulations Section 1.704-1(b)(2)(iv)(m)(2) or Regulations Section 1.704-1(b)(2)(iv)(m)(4), to be taken into account in determining Capital Accounts as the result of a distribution to a Partner in complete liquidation of his interest in the Partnership, the amount of such adjustment to the Capital Accounts shall be treated as an item of gain (if the adjustment increases the basis of the asset) or loss (if the adjustment decreases such basis) and such gain or loss shall be specially allocated to the Partners in accordance with their interests in the Partnership in the event that Regulations Section 1.704-1(b)(2)(iv)(m)(2) applies, or to the Partners to whom such distribution was made in the event that Regulations Section 1.704-1(b)(2)(iv)(m)(4) applies.
(viii)    Curative Allocation.  The allocations set forth in Sections 6.3(i), (ii), (iii), (iv), (v), (vi), and (vii) (the “Regulatory Allocations”) are intended to comply with certain regulatory requirements, including the requirements of Regulations Sections 1.704-1(b) and 1.704-2.  Notwithstanding the provisions of Sections 6.1 and 6.2, the Regulatory Allocations shall be taken into account in allocating other items of income, gain, loss and deduction among the Partners so that, to the extent possible, the net amount of such allocations of other items and the Regulatory Allocations to each Partner shall be equal to the net amount that would have been allocated to each such Partner if the Regulatory Allocations had not occurred.  For purposes of determining a Partner’s proportional share of the “excess nonrecourse liabilities” of the Partnership within the meaning of Regulations Section 1.752-3(a)(3), each Partner’s interest in Partnership profits shall be such Partner’s Percentage Interest. 
(ix)    Special Allocation of Special Fees.  Consistent with Section 4.9, if the Partnership directly or indirectly incurs Special Fees, such Special Fees shall be specially allocated among the Classes of OP Units to correspond with their appropriate shares of such fees and then proportionately allocated among the Units within each burdened Class.  For example, if the Partnership incurs a distribution and shareholder servicing fee of $200 that is required to be borne entirely by the Partners holding Class C OP Units, the $200 servicing fee shall be specially allocated to the holders of Class C OP Units in proportion to their Class C OP Units.  To the extent that an allocation of Special Fees under this Section 6.3(ix) would create or increase an Adjusted Capital Account Deficit for a Partner, such allocation instead shall be made proportionately to the other Partners within the burdened Class who do not have Adjusted Capital Account Deficits.

	
			
	 
	29
	 

Section 6.4    Tax Allocations.
A.    In General.  Except as otherwise provided in this Section 6.4, for income tax purposes each item of income, gain, loss and deduction (collectively, “Tax Items”) shall be allocated among the Partners in the same manner as its correlative item of “book” income, gain, loss or deduction is allocated pursuant to Sections 6.2 and 6.3.
B.    Allocations Respecting Section 704(c) Revaluations.  Notwithstanding Section 6.4.A, Tax Items with respect to Partnership property that is contributed to the Partnership by a Partner with a Gross Asset Value that differs from its adjusted tax basis in the hands of the Contributing Partner immediately preceding the date of contribution shall be allocated among the Partners for income tax purposes pursuant to Regulations promulgated under Section 704(c) of the Code, so as to take into account the variation between book Capital Accounts and tax capital accounts.  The Partnership shall account for such variation under the “traditional method” under Regulations Section 1.704-3(b) with respect to Partnership property that is contributed to the Partnership in connection with the General Partner’s initial offering.  With respect to other properties contributed to the Partnership, the Partnership shall account for such variation under any reasonable method consistent with Section 704(c) of the Code and the applicable regulations as chosen by the General Partner.  In the event the Gross Asset Value of any Partnership asset is adjusted pursuant to subparagraph (b) of the definition of Gross Asset Value (provided in Article 1), subsequent allocations of Tax Items with respect to such asset shall take account of the variation, if any, between the adjusted basis of such asset and its Gross Asset Value in the same manner as under Section 704(c) of the Code and the applicable regulations consistent with the requirements of Regulations Section 1.704-1(b)(2)(iv)(g) using any method approved under Section 704(c) of the Code and the applicable regulations as chosen by the General Partner.
ARTICLE 7     
MANAGEMENT AND OPERATIONS OF BUSINESS
Section 7.1    Management.
K.    Except as otherwise expressly provided in this Agreement, all management powers over the business and affairs of the Partnership are and shall be exclusively vested in the General Partner, and no Limited Partner shall have any right to participate in or exercise control or management power over the business and affairs of the Partnership.  The General Partner may not be removed by the Limited Partners with or without cause, except with the consent of the General Partner.  In addition to the powers now or hereafter granted a general partner of a limited partnership under applicable law or which are granted to the General Partner under any other provision of this Agreement, the General Partner, subject to the other provisions hereof including Sections 7.3 and 11.2, shall have full power and authority to do all things deemed necessary or desirable by it to conduct the business of the Partnership (including, without limitation, all actions consistent with allowing the General Partner at all times to qualify as a REIT unless the General Partner voluntarily terminates its REIT status), to exercise all powers set forth in Section 3.2 and to effectuate the purposes set forth in Section 3.1, including, without limitation:
(1)    the making of any expenditures, the lending or borrowing of money (including, without limitation, making prepayments on loans and borrowing money to permit the Partnership to make distributions to its Partners in such amounts as will permit the General Partner (so long as the General Partner has determined to qualify as a REIT) to avoid the payment of any federal income tax (including, for this purpose, any excise tax pursuant to Section 4981 of the Code) and to make distributions to its stockholders sufficient to permit the General Partner to maintain REIT status), the 

	
			
	 
	30
	 

assumption or guarantee of, or other contracting for, indebtedness and other liabilities, the issuance of evidences of indebtedness (including the securing of same by mortgage, deed of trust or other lien or encumbrance on all or any of the Partnership’s assets) and the incurring of any obligations it deems necessary for the conduct of the activities of the Partnership;
(2)    the making of tax, regulatory and other filings, or rendering of periodic or other reports to governmental or other agencies having jurisdiction over the business or assets of the Partnership, the registration of any class of securities of the Partnership under the Exchange Act, and the listing of any debt securities of the Partnership on any exchange;
(3)    subject to the provisions of Section 11.2, the acquisition, disposition, mortgage, pledge, encumbrance, hypothecation or exchange of any assets of the Partnership or the merger or other combination of the Partnership with or into another entity;
(4)    the acquisition, disposition, mortgage, pledge, encumbrance or hypothecation of all or any assets of the Partnership, and the use of the assets of the Partnership (including, without limitation, cash on hand) for any purpose consistent with the terms of this Agreement and on any terms it sees fit, including, without limitation, the financing of the conduct or the operations of the General Partner or the Partnership, the lending of funds to other Persons (including, without limitation, the General Partner or any Subsidiaries of the Partnership) and the repayment of obligations of the Partnership, any of its Subsidiaries and any other Person in which it has an equity investment, and the making of capital contributions to its Subsidiaries;
(5)    the management, operation, leasing, landscaping, repair, alteration, demolition or improvement of any real property or improvements owned by the Partnership or any Subsidiary of the Partnership;
(6)    the negotiation, execution, and performance of any contracts, leases, conveyances or other instruments that the General Partner considers useful or necessary to the conduct of the Partnership’s operations or the implementation of the General Partner’s powers under this Agreement, including contracting with contractors, developers, consultants, accountants, legal counsel, other professional advisors and other agents and the payment of their expenses and compensation out of the Partnership’s assets;
(7)    the distribution of Partnership cash or other Partnership assets in accordance with this Agreement;
(8)    the establishment of one or more divisions of the Partnership, the selection and dismissal of employees of the Partnership (including, without limitation, employees having titles such as “president,” “vice president,” “secretary” and “treasurer”), and agents, outside attorneys, accountants, consultants and contractors of the Partnership, the determination of their compensation and other terms of employment or hiring, including waivers of conflicts of interest and the payment of their expenses and compensation out of the Partnership’s assets;
(9)    the maintenance of such insurance for the benefit of the Partnership and the Partners and directors and officers of the Partnership or the General Partner as it deems necessary or appropriate;
(10)    the formation of, or acquisition of an interest in, and the contribution of property to, any further limited or general partnerships, limited liability companies, joint ventures, 

	
			
	 
	31
	 

corporations or other relationships that it deems desirable (including, without limitation, the acquisition of interests in, and the contributions of property to any Subsidiary and any other Person in which it has an equity investment from time to time); provided, that, as long as the General Partner has determined to continue to qualify as a REIT, the Partnership may not engage in any such formation, acquisition or contribution that could cause the General Partner to fail to qualify as a REIT;
(11)    the control of any matters affecting the rights and obligations of the Partnership, including the settlement, compromise, submission to arbitration or any other form of dispute resolution, or abandonment of, any claim, cause of action, liability, debt or damages, due or owing to or from the Partnership, the commencement or defense of suits, legal proceedings, administrative proceedings, arbitration or other forms of dispute resolution, and the representation of the Partnership in all suits or legal proceedings, administrative proceedings, arbitrations or other forms of dispute resolution, the incurring of legal expense, and the indemnification of any Person against liabilities and contingencies to the extent permitted by law;
(12)    the undertaking of any action in connection with the Partnership’s direct or indirect investment in any Person (including, without limitation, contributing or loaning Partnership funds to, incurring indebtedness on behalf of, or guarantying the obligations of any such Persons);
(13)    subject to the other provisions in this Agreement, the determination of the fair market value of any Partnership property distributed in kind using such reasonable method of valuation as it may adopt, provided, that such methods are otherwise consistent with requirements of this Agreement;
(14)    the management, operation, leasing, landscaping, repair, alteration, demolition or improvement of any real property or improvements owned by the Partnership or any Subsidiary of the Partnership or any Person in which the Partnership has made a direct or indirect equity investment;
(15)    holding, managing, investing and reinvesting cash and other assets of the Partnership;
(16)    the collection and receipt of revenues and income of the Partnership;
(17)    the exercise, directly or indirectly through any attorney-in-fact acting under a general or limited power of attorney, of any right, including the right to vote, appurtenant to any asset or investment held by the Partnership;
(18)    the exercise of any of the powers of the General Partner enumerated in this Agreement on behalf of or in connection with any Subsidiary of the Partnership or any other Person in which the Partnership has a direct or indirect interest, or jointly with any such Subsidiary or other Person;
(19)    the exercise of any of the powers of the General Partner enumerated in this Agreement on behalf of any Person in which the Partnership does not have an interest pursuant to contractual or other arrangements with such Person;
(20)    the making, execution and delivery of any and all deeds, leases, notes, deeds to secure debt, mortgages, deeds of trust, security agreements, conveyances, contracts, guarantees, warranties, indemnities, waivers, releases or legal instruments or agreements in writing necessary or 

	
			
	 
	32
	 

appropriate in the judgment of the General Partner for the accomplishment of any of the powers of the General Partner enumerated in this Agreement;
(21)    the issuance of additional Partnership Interests, as appropriate, in connection with the contribution of Additional Funds pursuant to Section 4.4;
(22)    the distribution of cash to acquire OP Units held by a Limited Partner in connection with a Limited Partner’s exercise of its Redemption Right under Section 8.6 hereof;
(23)    the amendment and restatement of Exhibit A hereto to reflect accurately at all times the Capital Contributions and Percentage Interests of the Partners as the same are adjusted from time to time to the extent necessary to reflect redemptions, Capital Contributions, the issuance of OP Units, the admission of any Additional Limited Partner or any Substituted Limited Partner or otherwise, which amendment and restatement, notwithstanding anything in this Agreement to the contrary, shall not be deemed an amendment to this Agreement, as long as the matter or event being reflected in Exhibit A hereto otherwise is authorized by this Agreement;
(24)    the taking of any and all acts and things necessary or prudent to ensure that the Partnership will not be classified as a “publicly traded partnership” under Section 7704 of the Code; and
(25)    the delegation to another Person of any powers now or hereafter granted to the General Partner.
L.    Each of the Limited Partners agrees that the General Partner is authorized to execute, deliver and perform the above-mentioned agreements and transactions on behalf of the Partnership without any further act, approval or vote of the Partners, notwithstanding any other provisions of this Agreement (except as provided in Section 7.3 or 11.2), the Act or any applicable law, rule or regulation to the fullest extent permitted under the Act or other applicable law, rule or regulation.  The execution, delivery or performance by the General Partner or the Partnership of any agreement authorized or permitted under this Agreement shall not constitute a breach by the General Partner of any duty that the General Partner may owe the Partnership or the Limited Partners or any other Persons under this Agreement or of any duty stated or implied by law or equity.
M.    At all times from and after the date hereof, the General Partner may cause the Partnership to obtain and maintain (i) casualty, liability and other insurance on the Investments and (ii) liability insurance for the Indemnities hereunder.
N.    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.
O.    Each of the Limited Partners acknowledges that, in exercising its authority under this Agreement, the General Partner may, but shall be under no obligation to, take into account the tax consequences to any Partner (including the General Partner) of any action taken (or not taken) by the General Partner.  The General Partner and the Partnership shall not have liability to a Partner under this Agreement as a result of any income tax liability incurred by a Limited Partner as a result of an action (or inaction) by the General Partner pursuant to its authority under this Agreement.  There may be circumstances in which the fiduciary duties that the General Partner owes to the Limited Partners conflicts with any duties that the officers and directors of General Partner owe to its stockholders.  For so 

	
			
	 
	33
	 

long as the General Partner owns a controlling interest in the Partnership, any such conflict that cannot be resolved in a manner not adverse to either the stockholders or the Limited Partners shall be resolved in favor of the General Partner’s stockholders.
P.    Except as otherwise provided herein, to the extent the duties of the General Partner require expenditures of funds to be paid to third parties, the General Partner shall not have any obligations hereunder except to the extent that Partnership funds are reasonably available to it for the performance of such duties, and nothing herein contained shall be deemed to authorize or require the General Partner, in its capacity as such, to expend its individual funds for payment to third parties or to undertake any individual liability or obligation on behalf of the Partnership.
Section 7.2    Certificate of Limited Partnership.
To the extent that such action is determined by the General Partner to be reasonable and necessary or appropriate, the General Partner shall file amendments to and restatements of the Certificate and do all the things to maintain the Partnership as a limited partnership (or a partnership in which the limited partners have limited liability) under the laws of the State of Delaware and to maintain the Partnership’s qualification to do business as a foreign limited partnership in each other state, the District of Columbia or other jurisdiction, in which the Partnership may elect to do business or own property.  Subject to the terms of Section 8.5.A(4), the General Partner shall not be required, before or after filing, to deliver or mail a copy of the Certificate or any amendment thereto to any Limited Partner.  The General Partner shall use all reasonable efforts to cause to be filed such other certificates or documents as may be reasonable and necessary or appropriate for the formation, continuation, qualification and operation of a limited partnership (or a partnership in which the limited partners have limited liability) in the State of Delaware, any other state, or the District of Columbia or other jurisdiction, in which the Partnership may elect to do business or own property.
Section 7.3    Restrictions on General Partner’s Authority.
C.    The General Partner may not take any action in contravention of an express prohibition or limitation of this Agreement without the written Consent of the Limited Partners and the Special General Partner, and may not (i) perform any act that would subject a Limited Partner to liability as a general partner in any jurisdiction or any other liability except as provided herein or under the Act; or (ii) enter into any contract, mortgage, loan or other agreement that prohibits or restricts, or has the effect of prohibiting or restricting, the ability of a Limited Partner to exercise its rights to a Redemption in full, except in each case with the written consent of such Limited Partner.
D.    The General Partner shall not, without the prior Consent of the Partners (in addition to any Consent of the Limited Partners required by any other provision hereof), or except as provided in Section 7.3.D, amend, modify or terminate this Agreement.
E.    The General Partner may not cause the Partnership to take any action which the General Partner would be prohibited from taking directly under the General Partner’s bylaws as in effect from time to time.

	
			
	 
	34
	 

F.    Notwithstanding Section 7.3.B, the General Partner shall have the exclusive power to amend this Agreement as may be required to facilitate or implement any of the following purposes:
(1)    to add to the obligations of the General Partner or surrender any right or power granted to the General Partner or any Affiliate of the General Partner for the benefit of the Limited Partners;
(2)    to reflect the issuance of additional Partnership Interests pursuant to Sections 4.4.B, 5.4 and 6.2.B. or the admission, substitution, termination, or withdrawal of Partners in accordance with this Agreement (which may be effected through the replacement of Exhibit A with an amended Exhibit A);
(3)    to set forth or amend the designations, rights, powers, duties and preferences of the holders of any additional Partnership Interests issued pursuant to Article 4;
(4)    to reflect a change that is of an inconsequential nature and does not adversely affect the Limited Partners in any material respect, or to cure any ambiguity, correct or supplement any provision in this Agreement not inconsistent with law or with other provisions, or make other changes with respect to matters arising under this Agreement that will not be inconsistent with law or with the provisions of this Agreement;
(5)    to satisfy any requirements, conditions, or guidelines contained in any order, directive, opinion, ruling or regulation of a federal or state agency or contained in federal or state law;
(6)    to reflect such changes as are reasonably necessary for the General Partner to maintain its status as a REIT, including changes which may be necessitated due to a change in applicable law (or an authoritative interpretation thereof) or a ruling of the IRS;
(7)    to modify, as set forth in the definition of “Capital Account,” the manner in which Capital Accounts are computed; and
(8)    to amend or modify any provision of this Agreement to reflect a statutory or regulatory change regarding the federal income tax treatment of the “profits interest” of the Special General Partner or to ensure that the receipt of the Special General Partner’s profits interest will not result in taxation to the Special General Partner.
The General Partner will provide notice to the Limited Partners when any action under this Section 7.3.D is taken.
G.    Notwithstanding Sections 7.3.B and 7.3.D, this Agreement shall not be amended with respect to any Partner adversely affected, and no action may be taken by the General Partner, without the Consent of such Partner adversely affected if such amendment or action would (i) convert a Limited Partner’s interest in the Partnership into a general partner’s interest (except as the result of the General Partner acquiring such interest), (ii) modify the limited liability of a Limited Partner, (iii) alter rights of the Partner to receive distributions pursuant to Article 5 or Section 13.2.A(4), or the allocations specified in Article 6 (except as permitted pursuant to Sections 4.4, 5.4, 6.2.C and Section 7.3.D(2)), (iv) materially alter or modify the rights to a Redemption or the REIT Shares Amount as set forth in Section 8.6, and related definitions hereof, or (v) amend this Section 7.3.E.  Further, no amendment may alter the 

	
			
	 
	35
	 

restrictions on the General Partner’s authority set forth elsewhere in this Section 7.3 or in Section 11.2.A without the Consent specified in such section.  This Section 7.3.E does not require unanimous consent of all Partners adversely affected unless the amendment is to be effective against all partners adversely affected.
Section 7.4    Reimbursement of the General Partner.
A.    Except as provided in this Section 7.4 and elsewhere in this Agreement (including the provisions of Articles 5 and 6 regarding distributions, payments and allocations to which it may be entitled), the General Partner shall not be compensated for its services as general partner of the Partnership.
B.    The Partnership shall be responsible for and shall pay all expenses relating to the Partnership’s and the General Partner’s organization, the ownership of its assets and its operations.  The General Partner is hereby authorized to pay compensation for accounting, administrative, legal, technical, management and other services rendered to the Partnership.  Except to the extent provided in this Agreement, the General Partner and its Affiliates shall be reimbursed on a monthly basis, or such other basis as the General Partner may determine in its sole and absolute discretion, for all expenses that the General Partner and its Affiliates incur relating to the ownership and operation of, or for the benefit of, the Partnership (including, without limitation, administrative expenses); provided, that the amount of any such reimbursement shall be reduced by any interest earned by the General Partner with respect to bank accounts or other instruments or accounts held by it on behalf of the Partnership.  The Partners acknowledge that all such expenses of the General Partner are deemed to be for the benefit of the Partnership.  Such reimbursement shall be in addition to any reimbursement made as a result of indemnification pursuant to Section 7.7 hereof.  In the event that certain expenses are incurred for the benefit of the Partnership and other entities (including the General Partner), such expenses will be allocated to the Partnership and such other entities in such a manner as the General Partner in its sole and absolute discretion deems fair and reasonable.  All payments and reimbursements hereunder shall be characterized for federal income tax purposes as expenses of the Partnership incurred on its behalf, and not as expenses of the General Partner.
C.    If the General Partner shall elect to purchase from its stockholders REIT Shares for the purpose of delivering such REIT Shares to satisfy an obligation under any dividend reinvestment program adopted by the General Partner, any employee stock purchase plan adopted by the General Partner, or any similar obligation or arrangement undertaken by the General Partner in the future or for the purpose of retiring such REIT Shares, the purchase price paid by the General Partner for such REIT Shares and any other expenses incurred by the General Partner in connection with such purchase shall be considered expenses of the Partnership and shall be advanced to the General Partner or reimbursed to the General Partner, subject to the condition that:  (i) if such REIT Shares subsequently are sold by the General Partner, the General Partner shall pay to the Partnership any proceeds received by the General Partner for such REIT Shares (which sales proceeds shall include the amount of dividends reinvested under any dividend reinvestment or similar program; provided, that a transfer of REIT Shares for OP Units pursuant to Section 8.6 would not be considered a sale for such purposes); and (ii) if such REIT Shares are not retransferred by the General Partner within thirty (30) days after the purchase thereof, or the General Partner otherwise determines not to retransfer such REIT Shares, the General Partner, shall cause the Partnership to redeem a number of OP Units held by the General Partner equal to the number of such REIT Shares, as adjusted (x) pursuant to Section 7.5 (in the event the General Partner acquires material assets, other than on behalf of the Partnership) and (y) for stock dividends and distributions, stock splits and subdivisions, reverse stock splits and combinations, distributions of rights, warrants or 

	
			
	 
	36
	 

options, and distributions of evidences of indebtedness or assets relating to assets not received by the General Partner pursuant to a pro rata distribution by the Partnership (in which case such advancement or reimbursement of expenses shall be treated as having been made as a distribution in redemption of such number of OP Units held by the General Partner).
D.    As set forth in Section 4.4, the General Partner shall be treated as having made a Capital Contribution in the amount of all expenses that it incurs relating to the General Partner’s offering of REIT Shares, other shares of capital stock of the General Partner or New Securities.
E.    If and to the extent any reimbursements to the General Partner pursuant to this Section 7.4 constitute gross income of the General Partner (as opposed to the repayment of advances made by the General Partner on behalf of the Partnership), such amounts shall constitute guaranteed payments within the meaning of Section 707(c) of the Code, shall be treated consistently therewith by the Partnership and all Partners, and shall not be treated as distributions for purposes of computing the Partners’ Capital Accounts.
Section 7.5    Outside Activities of the General Partner.
A.    Except in connection with a transaction authorized in Section 11.2, without the Consent of the Limited Partners, the General Partner shall not, directly or indirectly, enter into or conduct any business, other than in connection with the ownership, acquisition and disposition of Partnership Interests as a General Partner and the management of the business of the Partnership, its operation as a public reporting company with a class (or classes) of securities registered under the Exchange Act, its operation as a REIT and such activities as are incidental to the same.  Without the Consent of the Limited Partners, the General Partner shall not, directly or indirectly, participate in or otherwise acquire any interest in any real or personal property, except its General Partner Interest, its minority interest in any Subsidiary Partnership(s) that the General Partner holds in order to maintain such Subsidiary Partnership’s status as a partnership, and such bank accounts, similar instruments or other short term investments as it deems necessary to carry out its responsibilities contemplated under this Agreement and the Charter.  In the event the General Partner desires to contribute cash to any Subsidiary Partnership to acquire or maintain an interest of 1% or less in the capital of such partnership, the General Partner may acquire or maintain an interest of 1% or less in the capital of such partnership, and the General Partner may acquire such cash from the Partnership as a loan or in exchange for a reduction in the General Partner’s OP Units, in an amount equal to the amount of such cash divided by the Fair Market Value of a REIT Share on the day such cash is received by the General Partner.  Notwithstanding the foregoing, the General Partner may acquire Investments or other assets in exchange for REIT Shares or cash, to the extent such Investments or other assets are immediately contributed by the General Partner to the Partnership, pursuant to the terms described in Section 4.4.D.  Any Limited Partner Interests acquired by the General Partner, whether pursuant to exercise by a Limited Partner of its right of Redemption, or otherwise, shall be automatically converted into a General Partner Interest comprised of an identical number of OP Units with the same rights, priorities and preferences as the class or series so acquired.  The General Partner may also own one hundred percent (100%) of the stock or interests of one or more Qualified REIT Subsidiaries or limited liability companies, respectively, provided that any such entity shall be subject to the limitations of this Section 7.5.A.  If, at any time, the General Partner acquires material assets (other than Partnership Interests or other assets on behalf of the Partnership) the definition of “REIT Shares Amount” and the definition of “Deemed Value of Partnership Interests” shall be adjusted, as reasonably determined by the General Partner, to reflect the relative Fair Market Value of a share of capital stock of the General Partner relative to the Deemed Partnership Interest Value of the related Partnership Unit.  The General Partner’s General Partner Interest in the Partnership, its minority 

	
			
	 
	37
	 

interest in any Subsidiary Partnership(s) (held directly or indirectly through a Qualified REIT Subsidiary) that the General Partner holds in order to maintain such Subsidiary Partnership’s status as a partnership, and interests in such short-term liquid investments, bank accounts or similar instruments as the General Partner deems necessary to carry out its responsibilities contemplated under this Agreement and the Charter are interests which the General Partner is permitted to acquire and hold for purposes of this Section 7.5.A.
B.    In the event the General Partner exercises its rights under the Charter to purchase REIT Shares, other common stock of the General Partner or New Securities, as the case may be, then the General Partner shall cause the Partnership to purchase from it a number of OP Units equal to the number of REIT Shares, other capital stock of the General Partner or New Securities, as the case may be, so purchased on the same terms that the General Partner purchased such REIT Shares, other capital stock of the General Partner or New Securities, as the case may be.
Section 7.6    Contracts with Affiliates.
A.    The Partnership may lend or contribute to Persons in which it has an equity investment, and such Persons may borrow funds from the Partnership, on terms and conditions established in the sole and absolute discretion of the General Partner.  The foregoing authority shall not create any right or benefit in favor of any Person.
B.    Except as provided in Section 7.5.A, the Partnership may transfer assets to joint ventures, other partnerships, corporations or other business entities in which it is or thereby becomes a participant upon such terms and subject to such conditions consistent with this Agreement and applicable law as the General Partner in its sole discretion deems advisable.
C.    The General Partner, in its sole and absolute discretion and without the approval of the Limited Partners, may propose and adopt on behalf of the Partnership employee benefit plans funded by the Partnership for the benefit of employees of the General Partner, the Partnership, Subsidiaries of the Partnership or any Affiliate of any of them in respect of services performed, directly or indirectly, for the benefit of the Partnership, the General Partner, or any of the Partnership’s Subsidiaries.
D.    Except as expressly permitted by this Agreement, neither the General Partner nor any of its Affiliates shall sell, transfer or convey any property to, or purchase any property from, the Partnership, directly or indirectly, except pursuant to transactions that are determined by the General Partner in good faith to be fair and reasonable.
E.    The General Partner is expressly authorized to enter into, in the name and on behalf of the Partnership, a right of first opportunity arrangement and other conflict avoidance agreements with various Affiliates of the Partnership and the General Partner, on such terms as the General Partner, in its sole and absolute discretion, believes are advisable.
Section 7.7    Indemnification.
A.    To the fullest extent permitted by law, the Partnership shall indemnify an Indemnitee from and against any and all losses, claims, damages, liabilities, joint or several, expenses (including legal fees and expenses), judgments, fines, settlements, and other amounts arising from any and all claims, demands, actions, suits or proceedings, civil, criminal, administrative or investigative, that relate to the operations of the Partnership as set forth in this Agreement in which any Indemnitee may be involved, or is threatened to be involved, as a party or otherwise, unless (1) Section 12.2.2 of the Charter 

	
			
	 
	38
	 

of the General Partner prohibits the corporation from indemnifying the Indemnitee for a tax matter, in which case the Partnership shall likewise be prohibited from indemnifying the Indemnitee for the matter, or (2) it is established that:  (i) the act or omission of the Indemnitee was material to the matter giving rise to the proceeding and either was committed in bad faith, fraud or was the result of active and deliberate dishonesty; (ii) the Indemnitee actually received an improper personal benefit in money, property or services; or (iii) in the case of any criminal proceeding, the Indemnitee had reasonable cause to believe that the act or omission was unlawful.  Without limitation, the foregoing indemnity shall extend to any liability of any Indemnitee, pursuant to a loan guaranty or otherwise, for any indebtedness of the Partnership or any Subsidiary of the Partnership (including, without limitation, any indebtedness which the Partnership or any Subsidiary of the Partnership has assumed or taken subject to), and the General Partner is hereby authorized and empowered, on behalf of the Partnership, to enter into one or more indemnity agreements consistent with the provisions of this Section 7.7 in favor of any Indemnitee having or potentially having liability for any such indebtedness.  The termination of any proceeding by judgment, order, settlement, conviction or upon a plea of nolo contendere or its equivalent, or any entry of an order of probation prior to judgment, does not create a presumption that the Indemnitee did not meet the requisite standard of conduct set forth in this Section 7.7.A.  Any indemnification pursuant to this Section 7.7 shall be made only out of the assets of the Partnership, and any insurance proceeds from the liability policy covering the General Partner and any Indemnitee, and neither the General Partner nor any Limited Partner shall have any obligation to contribute to the capital of the Partnership or otherwise provide funds to enable the Partnership to fund its obligations under this Section 7.7, except to the extent otherwise expressly agreed to by such Partner and the Partnership.
B.    Reasonable expenses incurred by an Indemnitee who is a party to a proceeding may be paid or reimbursed by the Partnership in advance of the final disposition of the proceeding upon receipt by the Partnership of (i) a written affirmation by the Indemnitee of the Indemnitee’s good faith belief that the standard of conduct necessary for indemnification by the Partnership as authorized in this Section 7.7 has been met, and (ii) a written undertaking by or on behalf of the Indemnitee to repay the amount if it shall ultimately be determined that the standard of conduct has not been met.
C.    The indemnification provided by this Section 7.7 shall be in addition to any other rights to which an Indemnitee or any other Person may be entitled under any agreement, pursuant to any vote of the Partners, as a matter of law or otherwise, and shall continue as to an Indemnitee who has ceased to serve in such capacity unless otherwise provided in a written agreement pursuant to which such Indemnitee is indemnified.
D.    The Partnership may, but shall not be obligated to, purchase and maintain insurance, on behalf of the Indemnitees and such other Persons as the General Partner shall determine, against any liability that may be asserted against or expenses that may be incurred by such Person in connection with the Partnership’s activities, regardless of whether the Partnership would have the power to indemnify such Person against such liability under the provisions of this Agreement.
E.    For purposes of this Section 7.7, the Partnership shall be deemed to have requested an Indemnitee to serve as fiduciary of an employee benefit plan whenever the performance by it of its duties to the Partnership also imposes duties on, or otherwise involves services by, it to the plan or participants or beneficiaries of the plan; excise taxes assessed on an Indemnitee with respect to an employee benefit plan pursuant to applicable law shall constitute fines within the meaning of Section 7.7; and actions taken or omitted by the Indemnitee with respect to an employee benefit plan in the performance of its duties for a purpose reasonably believed by it to be in the interest of the participants 

	
			
	 
	39
	 

and beneficiaries of the plan shall be deemed to be for a purpose which is not opposed to the best interests of the Partnership.
F.    In no event may an Indemnitee subject the Limited Partners to personal liability by reason of the indemnification provisions set forth in this Agreement.
G.    An Indemnitee shall not be denied indemnification in whole or in part under this Section 7.7 because the Indemnitee had an interest in the transaction with respect to which the indemnification applies if the transaction was otherwise permitted by the terms of this Agreement.
H.    The provisions of this Section 7.7 are for the benefit of the Indemnitees, their heirs, successors, assigns and administrators and shall not be deemed to create any rights for the benefit of any other Persons.  Any amendment, modification or repeal of this Section 7.7 or any provision hereof shall be prospective only and shall not in any way affect the limitations on the Partnership’s liability to any Indemnitee under this Section 7.7 as in effect immediately prior to such amendment, modification or repeal with respect to claims arising from or relating to matters occurring, in whole or in part, prior to such amendment, modification or repeal, regardless of when such claims may arise or be asserted.
I.    If and to the extent any reimbursements to the General Partner pursuant to this Section 7.7 constitute gross income of the General Partner (as opposed to the repayment of advances made by the General Partner on behalf of the Partnership) such amounts shall constitute guaranteed payments within the meaning of Section 707(c) of the Code, shall be treated consistently therewith by the Partnership and all Partners, and shall not be treated as distributions for purposes of computing the Partners’ Capital Accounts.
J.    Any indemnification hereunder is subject to, and limited by, the provisions of Section 17-108 of the Act and Section 12.2.2 of the Charter.
K.    In the event the Partnership is made a party to any litigation or otherwise incurs any loss or expense as a result of or in connection with any Partner’s personal obligations or liabilities unrelated to Partnership business, such Partner shall indemnify and reimburse the Partnership for all such loss and expense incurred, including legal fees, and the Partnership interest of such Partner may be charged therefor.  The liability of a Partner under this Section 7.7.K shall not be limited to such Partner’s Partnership Interest, but shall be enforceable against such Partner personally.
Section 7.8    Liability of the General Partner.
A.    Notwithstanding anything to the contrary set forth in this Agreement, none of the General Partner nor any of its officers, directors, agents or employees shall be liable or accountable in damages or otherwise to the Partnership, any Partners or any Assignees, or their successors or assigns, for losses sustained, liabilities incurred or benefits not derived as a result of errors in judgment or mistakes of fact or law or any act or omission if the General Partner acted in good faith.
B.    The Limited Partners expressly acknowledge that the General Partner is acting for the benefit of the Partnership, the Limited Partners and the General Partner’s stockholders collectively.  The General Partner is under no obligation to give priority to the separate interests of the Limited Partners or the General Partner’s stockholders (including, without limitation, the tax consequences to Limited Partners or Assignees or to stockholders) in deciding whether to cause the Partnership to take (or decline to take) any actions.  If there is a conflict between the interests of the stockholders of the General Partner on one hand and the Limited Partners on the other, the General Partner shall endeavor in good faith to 

	
			
	 
	40
	 

resolve the conflict in a manner not adverse to either the stockholders of the General Partner or the Limited Partners; provided, however, that for so long as the General Partner, owns a controlling interest in the Partnership, any such conflict that cannot be resolved in a manner not adverse to either the stockholders of the General Partner or the Limited Partners shall be resolved in favor of the stockholders.  The General Partner shall not be liable under this Agreement to the Partnership or to any Partner for monetary damages for losses sustained, liabilities incurred, or benefits not derived by Limited Partners in connection with such decisions; provided, that the General Partner has acted in good faith.
C.    Subject to its obligations and duties as General Partner set forth in Section 7.1.A, the General Partner may exercise any of the powers granted to it by this Agreement and perform any of the duties imposed upon it hereunder either directly or by or through its agents.  The General Partner shall not be responsible for any misconduct or negligence on the part of any such agent appointed by it in good faith.
D.    Any amendment, modification or repeal of this Section 7.8 or any provision hereof shall be prospective only and shall not in any way affect the limitations on the liability of the General Partner and any of its officers, directors, agents and employee’s liability to the Partnership and the Limited Partners under this Section 7.8 as in effect immediately prior to such amendment, modification or repeal with respect to claims arising from or relating to matters occurring, in whole or in part, prior to such amendment, modification or repeal, regardless of when such claims may arise or be asserted.
Section 7.9    Other Matters Concerning the General Partner.
A.    The General Partner may rely and shall be protected in acting or refraining from acting upon any resolution, certificate, statement, instrument, opinion, report, notice, request, consent, order, bond, debenture, or other paper or document believed by it to be genuine and to have been signed or presented by the proper party or parties.
B.    The General Partner may consult with legal counsel, accountants, appraisers, management consultants, investment bankers and other consultants and advisers selected by it, and any act taken or omitted to be taken in reliance upon the opinion of such Persons as to matters which such General Partner reasonably believes to be within such Person’s professional or expert competence shall be conclusively presumed to have been done or omitted in good faith and in accordance with such opinion.
C.    The General Partner shall have the right, in respect of any of its powers or obligations hereunder, to act through any of its duly authorized officers and a duly appointed attorney or attorneys-in-fact.  Each such attorney shall, to the extent provided by the General Partner in the power of attorney, have full power and authority to do and perform all and every act and duty which is permitted or required to be done by the General Partner hereunder.
D.    Notwithstanding any other provisions of this Agreement or any non-mandatory provision of the Act, any action of the General Partner on behalf of the Partnership or any decision of the General Partner to refrain from acting on behalf of the Partnership, undertaken in the good faith belief that such action or omission is necessary or advisable in order to protect the ability of the General Partner, for so long as the General Partner has determined to qualify as a REIT, to (i) continue to qualify as a REIT or (ii) avoid the General Partner incurring any taxes under Section 857 or Section 4981 of the Code, is expressly authorized under this Agreement and is deemed approved by all of the Limited Partners.

	
			
	 
	41
	 

Section 7.10    Title to Partnership Assets.
Title to Partnership assets, whether real, personal or mixed and whether tangible or intangible, shall be deemed to be owned by the Partnership as an entity, and no Partners, individually or collectively, shall have any ownership interest in such Partnership assets or any portion thereof.  Title to any or all of the Partnership assets may be held in the name of the Partnership, the General Partner or one or more subsidiaries or nominees, as the General Partner may determine, including Affiliates of the General Partner.  The General Partner hereby declares and warrants that any Partnership assets for which legal title is held in the name of the General Partner or any nominee or Affiliate of the General Partner shall be held by the General Partner for the use and benefit of the Partnership in accordance with the provisions of this Agreement; provided, however, that the General Partner shall use its best efforts to cause beneficial and record title to such assets to be vested in the Partnership, a subsidiary or a nominee thereof, as soon as reasonably practicable.  All Partnership assets shall be recorded as the property of the Partnership in its books and records, irrespective of the name in which legal title to such Partnership assets is held.
Section 7.11    Reliance by Third Parties.
Notwithstanding anything to the contrary in this Agreement, any Person dealing with the Partnership shall be entitled to assume that the General Partner has full power and authority to encumber, sell or otherwise use in any manner any and all assets of the Partnership and to enter into any contracts on behalf of the Partnership, and such Person shall be entitled to deal with the General Partner as if it were the Partnership’s sole party in interest, both legally and beneficially.  Each Limited Partner hereby waives any and all defenses or other remedies which may be available against such Person to contest, negate or disaffirm any action of the General Partner in connection with any such dealing.  In no event shall any Person dealing with the General Partner or its representatives be obligated to ascertain that the terms of this Agreement have been complied with or to inquire into the necessity or expedience of any act or action of the General Partner or its representatives.  Each and every certificate, document or other instrument executed on behalf of the Partnership by the General Partner or its representatives shall be conclusive evidence in favor of any and every Person relying thereon or claiming thereunder that (i) at the time of the execution and delivery of such certificate, document or instrument, this Agreement was in full force and effect, (ii) the Person executing and delivering such certificate, document or instrument was duly authorized and empowered to do so for and on behalf of the Partnership and (iii) such certificate, document or instrument was duly executed and delivered in accordance with the terms and provisions of this Agreement and is binding upon the Partnership.
Section 7.12    Management Assistance Provided by Special General Partner.
In addition to the requirement to obtain the Consent of the Special General Partner with respect to certain matters as provided for in this Agreement, the Special General Partner shall provide consulting services and assistance to the Partnership at various times, in conjunction with the Advisor, for no additional consideration, on matters relating to the following:
(1)    the strategic planning of the Partnership;
(2)    the creation of business plans of the Partnership;
(3)    the sale, merger, or the sale of substantially all of the assets, of the Partnership; and
(4)    any other matters concerning the Partnership as determined appropriate by the General Partner and the Special General Partner.

	
			
	 
	42
	 

ARTICLE 8     
RIGHTS AND OBLIGATIONS OF LIMITED PARTNERS
Section 8.1    Limitation of Liability.
The Limited Partners shall have no liability under this Agreement except as expressly provided in this Agreement or under the Act.
Section 8.2    Management of Business.
No Limited Partner or Assignee (other than the General Partner, any of its Affiliates or any officer, director, employee, partner, agent or trustee of the General Partner, the Partnership or any of their Affiliates, in their capacity as such) shall take part in the operations, management or control (within the meaning of the Act) of the Partnership’s business, transact any business in the Partnership’s name or have the power to sign documents for or otherwise bind the Partnership.  The transaction of any such business by the General Partner, any of its Affiliates or any officer, director, employee, partner, agent or trustee of the General Partner, the Partnership or any of their Affiliates, in their capacity as such, shall not affect, impair or eliminate the limitations on the liability of the Limited Partners or Assignees under this Agreement.
Section 8.3    Outside Activities of Limited Partners.
Subject to any agreements entered into by a Limited Partner or its Affiliates with the General Partner, Partnership or a Subsidiary, any Limited Partner and any officer, director, employee, agent, trustee, Affiliate or stockholder of any Limited Partner shall be entitled to and may have business interests and engage in business activities in addition to those relating to the Partnership, including business interests and activities in direct competition with the Partnership or that are enhanced by the activities of the Partnership.  Neither the Partnership nor any Partners shall have any rights by virtue of this Agreement in any business ventures of any Limited Partner or Assignee.  Subject to such agreements, none of the Limited Partners nor any other Person shall have any rights by virtue of this Agreement or the partnership relationship established hereby in any business ventures of any other Person, other than the Limited Partners benefiting from the business conducted by the General Partner, and such Person shall have no obligation pursuant to this Agreement to offer any interest in any such business ventures to the Partnership, any Limited Partner or any such other Person, even if such opportunity is of a character which, if presented to the Partnership, any Limited Partner or such other Person, could be taken by such Person.
Section 8.4    Return of Capital.
Except pursuant to the rights of Redemption set forth in Section 8.6, no Limited Partner shall be entitled to the withdrawal or return of his or her Capital Contribution, except to the extent of distributions made pursuant to this Agreement or upon termination of the Partnership as provided herein.  No Limited Partner or Assignee shall have priority over any other Limited Partner or Assignee either as to the return of Capital Contributions, or as otherwise expressly provided in this Agreement, or as to profits, losses, distributions or credits.
Section 8.5    Rights of Limited Partners Relating to the Partnership.
F.    In addition to other rights provided by this Agreement or by the Act, and except as limited by Section 8.5.C, each Limited Partner shall have the right, for a purpose reasonably related to 

	
			
	 
	43
	 

such Limited Partner’s interest as a limited partner in the Partnership, upon written demand with a statement of the purpose of such demand and at such Limited Partner’s expense:
(26)    to obtain a copy of the most recent annual and quarterly reports filed with the Securities and Exchange Commission by the General Partner pursuant to the Exchange Act, and each communication sent to the stockholders of the General Partner;
(27)    to obtain a copy of the Partnership’s federal, state and local income tax returns for each Partnership Year;
(28)    to obtain a current list of the name and last known business, residence or mailing address of each Partner;
(29)    to obtain a copy of this Agreement and the Certificate and all amendments thereto, together with executed copies of all powers of attorney pursuant to which this Agreement, the Certificate and all amendments thereto have been executed; and
(30)    to obtain true and full information regarding the amount of cash and a description and statement of any other property or services contributed by each Partner and which each Partner has agreed to contribute in the future, and the date on which each became a Partner.
G.    The Partnership shall notify each Limited Partner in writing of any adjustment made in the calculation of the REIT Shares Amount within a reasonable time after the date such change becomes effective.
H.    Notwithstanding any other provision of this Section 8.5, the General Partner may keep confidential from the Limited Partners, for such period of time as the General Partner determines in its sole and absolute discretion to be reasonable, any information that (i) the General Partner believes to be in the nature of trade secrets or other information the disclosure of which the General Partner in good faith believes is not in the best interests of the Partnership or (ii) the Partnership or the General Partner is required by law or by agreements with unaffiliated third parties to keep confidential.
Section 8.6    Redemption Rights.
L.    At any time after one year following the date of issuance of any OP Units to a Limited Partner or a Special General Partner, such Partner shall have the right (subject to the terms and conditions set forth herein and in any other such agreement, as applicable) to require the Partnership to redeem all or a portion of the OP Units held by such Partner (such OP Units being hereafter referred to as “Tendered Units”) in exchange for the Cash Amount (a “Redemption”); provided that the terms of such OP Units do not provide that such OP Units are not entitled to a right of Redemption.  Unless otherwise expressly provided in this Agreement or in a separate agreement entered into between the Partnership and the holders of such OP Units, all OP Units, including Class A OP Units and Class C OP Units, shall be entitled to a right of Redemption hereunder.  The Tendering Partner shall have no right, with respect to any OP Units so redeemed, to receive any distributions paid on or after the Specified Redemption Date.  Any Redemption shall be exercised pursuant to a Notice of Redemption delivered to the General Partner by the Special General Partner or Limited Partner who is exercising the right (the “Tendering Partner”).  The Cash Amount shall be payable to the Tendering Partner within ten (10) days of the Specified Redemption Date in accordance with the instructions set forth in the Notice of Redemption.

	
			
	 
	44
	 

M.    Notwithstanding Section 8.6.A above, if the Special General Partner or a Limited Partner has delivered to the General Partner a Notice of Redemption then the General Partner may, in its sole and absolute discretion (subject to the limitations on ownership and transfer of REIT Shares set forth in the Charter), elect to acquire some or all of the Tendered Units from the Tendering Partner in exchange for the REIT Shares Amount (as of the Specified Redemption Date) and, if the General Partner so elects, the Tendering Partner shall sell the Tendered Units to the General Partner in exchange for the REIT Shares Amount.  In such event, the Tendering Partner shall have no right to cause the Partnership to redeem such Tendered Units.  The General Partner shall promptly give such Tendering Partner written notice of its election, and the Tendering Partner may elect to withdraw its redemption request at any time prior to the acceptance of the cash or REIT Shares Amount by such Tendering Partner.
N.    The REIT Shares Amount, if applicable, shall be delivered as duly authorized, validly issued, fully paid and nonassessable REIT Shares and, if applicable, free of any pledge, lien, encumbrance or restriction, other than those provided in the Charter, the Bylaws of the General Partner, the Securities Act, relevant state securities or blue sky laws and any applicable registration rights agreement with respect to such REIT Shares entered into by the Tendering Partner.  Notwithstanding any delay in such delivery (but subject to Section 8.6.E), the Tendering Partner shall be deemed the owner of such REIT Shares for all purposes, including without limitation, rights to vote or consent, and receive dividends, as of the Specified Redemption Date.
O.    The Special General Partner and each Limited Partner covenants and agrees with the General Partner that all Tendered Units shall be delivered to the General Partner free and clear of all liens, claims and encumbrances whatsoever and should any such liens, claims and/or encumbrances exist or arise with respect to such Tendered Units, the General Partner shall be under no obligation to acquire the same.  The Special General Partner and each Limited Partner further agrees that, in the event any state or local property transfer tax is payable as a result of the transfer of its Tendered Units to the General Partner (or its designee), such Partner shall assume and pay such transfer tax.
P.    Notwithstanding the provisions of Section 8.6.A, 8.6.B, 8.6.C or any other provision of this Agreement, the Special General Partner or a Limited Partner (i) shall not be entitled to effect a Redemption for cash or an exchange for REIT Shares to the extent the ownership or right to acquire REIT Shares pursuant to such exchange by such Partner on the Specified Redemption Date could cause such Partner or any other Person, or, in the opinion of counsel selected by the General Partner, may cause such Partner or any other Person, to violate the restrictions on ownership and transfer of REIT Shares set forth in the Charter and (ii) shall have no rights under this Agreement to acquire REIT Shares which would otherwise be prohibited under the Charter.  To the extent any attempted Redemption or exchange for REIT Shares would be in violation of this Section 8.6.E, it shall be null and void ab initio and such Partner shall not acquire any rights or economic interest in the cash otherwise payable upon such Redemption or the REIT Shares otherwise issuable upon such exchange.
Q.    Notwithstanding anything herein to the contrary (but subject to Section 8.6.E), with respect to any Redemption or exchange for REIT Shares pursuant to this Section 8.6:
(1)    All OP Units acquired by the General Partner pursuant thereto shall automatically, and without further action required, be converted into and deemed to be Limited Partner Interests comprised of the same number and class of OP Units.
(2)    The Special General Partner and each Limited Partner may not effect a Redemption for less than one thousand (1,000) OP Units or, if such Partner holds less than one thousand 

	
			
	 
	45
	 

(1,000) OP Units, such Partner may effect a Redemption only with respect to all OP Units held by such Partner.
(3)    A Tendering Partner may not effect more than two (2) Redemptions in a single calendar year.
(4)    Without the consent of the General Partner, the Special General Partner and each Limited Partner may not effect a Redemption during the period after the Partnership Record Date with respect to a distribution and before the record date established by the General Partner for a distribution to its stockholders of some or all of its portion of such distribution.
(5)    The consummation of any Redemption or exchange for REIT Shares shall be subject to the expiration or termination of the applicable waiting period, if any, under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended.
(6)    Each Tendering Partner shall continue to own all OP Units subject to any Redemption or exchange for REIT Shares, and be treated as a Partner with respect to such OP Units for all purposes of this Agreement, until such OP Units are transferred to the General Partner and paid for or exchanged on the Specified Redemption Date.  Until a Specified Redemption Date, the Tendering Partner shall have no rights as a stockholder of the General Partner with respect to such Tendering Partner’s OP Units.
R.    In the event that the Partnership issues additional Partnership Interests to any Additional Limited Partner pursuant to Section 4.4.B, the General Partner shall make such revisions to this Section 8.6 as it determines are necessary to reflect the issuance of such additional Partnership Interests.
S.    Notwithstanding any other provision of this Agreement, the General Partner is authorized to take any action that it determines to be necessary or appropriate to cause the partnership to comply with any withholding requirements established under the Code or any other federal, state or local law that apply upon a Redemption or exchange of Tendered Units.  If a Tendering Partner believes that it is exempt from withholding upon a Redemption or exchange of Tendered Units, such Partner must furnish the General Partner a FIRPTA certificate or other documentation requested by the General Partner is a form acceptable to the General Partner.  If the Partnership or the General Partner is required to withhold and pay over to any taxing authority any amount upon a Redemption or exchange of Tendered Units and the Cash Amount or the REIT Shares Amount, as the case may be, equals or exceeds the amount of tax required to be withheld, the amount withheld shall be treated as an amount received by such Partner in redemption of its Tendered Units.  If the Cash Amount or the REIT Shares Amount, as the case may be, is less than the amount of tax required to be withheld, the Tendering Partner shall not receive any Cash Amount or REIT Shares Amount, and the Tendering Partner shall contribute the excess of the amount of tax required to be withheld over the Cash Amount or REIT Shares Amount before such excess taxes are required to be paid to the taxing authority.
ARTICLE 9     
BOOKS, RECORDS, ACCOUNTING AND REPORTS
Section 9.1    Records and Accounting.
The General Partner shall keep, or cause to be kept, at the principal office of the Partnership appropriate books and records with respect to the Partnership’s business, including without limitation, all 

	
			
	 
	46
	 

books and records necessary to provide to the Special General Partner and the Limited Partners any information, lists and copies of documents required to be provided pursuant to Section 9.3.  Any records maintained by or on behalf of the Partnership in the regular course of its business may be kept on, or be in the form of any information storage device, provided, that the records so maintained are convertible into clearly legible written form within a reasonable period of time.  The books of the Partnership shall be maintained, for financial and tax reporting purposes, on an accrual basis in accordance with generally accepted accounting principles.
Section 9.2    Fiscal Year.
The fiscal year of the Partnership shall be the calendar year.
Section 9.3    Reports.
C.    As soon as practicable, but in no event later than 105 days after the close of each Partnership Year, or such earlier date as they are filed with the Securities and Exchange Commission, the General Partner shall cause to be delivered to the Special General Partner and each Limited Partner as of the close of the Partnership Year, an annual report containing financial statements of the Partnership, or of the General Partner if such statements are prepared solely on a consolidated basis with the General Partner, for such Partnership Year, presented in accordance with generally accepted accounting principles, such statements to be audited by a nationally recognized firm of independent public accountants selected by the General Partner.
D.    As soon as practicable, but in no event later than 45 days after the close of each calendar quarter (except the last calendar quarter of each year), or such earlier date as they are filed with the Securities and Exchange Commission, the General Partner shall cause to be delivered to the Special General Partner and each Limited Partner as of the last day of the calendar quarter, a report containing unaudited financial statements of the Partnership, or of the General Partner, if such statements are prepared solely on a consolidated basis with the applicable law or regulation, or as the General Partner determines to be appropriate.
Section 9.4    Nondisclosure of Certain Information.
Notwithstanding the provisions of Sections 9.1 and 9.3, the General Partner may keep confidential from the Special General Partner and the Limited Partners any information that the General Partner believes to be in the nature of trade secrets or other information the disclosure of which the General Partner in good faith believes is not in the best interest of the Partnership or which the Partnership is required by law or by agreements with unaffiliated third parties to keep confidential.
ARTICLE 10     
TAX MATTERS
Section 10.1    Preparation of Tax Returns.
The General Partner shall arrange for the preparation and timely filing of all returns of Partnership income, gains, deductions, losses and other items required of the Partnership for federal and applicable state income tax purposes and shall use all reasonable efforts to furnish, within 90 days of the close of each taxable year, the tax information reasonably required by the Special General Partner and the Limited Partners for federal and applicable state income tax reporting purposes.  The Special General Partner and each Limited Partner shall promptly provide the General Partner with any information 

	
			
	 
	47
	 

reasonably requested by the General Partner relating to any Contributed Property contributed (directly or indirectly) by such Partner to the Partnership.
Section 10.2    Tax Elections.
Except as otherwise provided herein, the General Partner shall, in its sole and absolute discretion, determine whether to make any available election pursuant to the Code, including the election under Section 754 of the Code.  The General Partner shall have the right to seek to revoke any such election (including without limitation, any election under Section 754 of the Code) upon the General Partner’s determination in its sole and absolute discretion that such revocation is the best interests of the Partners.
Section 10.3    Tax Matters Partner.
I.    The General Partner shall be the “tax matters partner” of the Partnership for federal income tax purposes.  Pursuant to Section 6230(e) of the Code, upon receipt of notice from the IRS of the beginning of an administrative proceeding with respect to the Partnership, the tax matters partner shall furnish the IRS with the name, address and profit interest of the Special General Partner and each of the Limited Partners and Assignees; provided, however, that such information is provided to the Partnership by the Partners and Assignees.
J.    The tax matters partner is authorized, but not required:
(1)    to enter into any settlement with the IRS with respect to any administrative or judicial proceedings for the adjustment of Partnership items required to be taken into account by a Partner for income tax purposes (such administrative proceedings being referred to as a “tax audit” and such judicial proceedings being referred to as “judicial review”), and in the settlement agreement the tax matters partner may expressly state that such agreement shall bind all Partners, except that such settlement agreement shall not bind any Partner (i) who (within the time prescribed pursuant to the Code and Regulations) files a statement with the IRS providing that the tax matters partner shall not have the authority to enter into a settlement agreement on behalf of such Partner or (ii) who is a “notice partner” (as defined in Section 6231 of the Code) or a member of a “notice group” (as defined in Section 6223(b)(2) of the Code);
(2)    in the event that a notice of a final administrative adjustment at the Partnership level of any item required to be taken into account by a Partner for tax purposes (a “final adjustment”) is mailed to the tax matters partner, to seek judicial review of such final adjustment, including the filing of a petition for readjustment with the Tax Court or the United States Claims Court, or the filing of a complaint for refund with the District Court of the United States for the district in which the Partnership’s principal place of business is located;
(3)    to intervene in any action brought by any other Partner for judicial review of a final adjustment;
(4)    to file a request for an administrative adjustment with the IRS at any time and, if any part of such request is not allowed by the IRS, to file an appropriate pleading (petition or complaint) for judicial review with respect to such request;
(5)    to enter into an agreement with the IRS to extend the period for assessing any tax which is attributable to any item required to be taken into account by a Partner for tax purposes, or an item affected by such item; and

	
			
	 
	48
	 

(6)    to take any other action on behalf of the Partners of the Partnership in connection with any tax audit or judicial review proceeding to the extent permitted by applicable law or regulations.
The taking of any action and the incurring of any expense by the tax matters partner in connection with any such proceeding, except to the extent required by law, is a matter in the sole and absolute discretion of the tax matters partner and the provisions relating to indemnification of the General Partner set forth in Section 7.7 shall be fully applicable to the tax matters partner in its capacity as such.
K.    The tax matters partner shall receive no compensation for its services.  All third party costs and expenses incurred by the tax matters partner in performing its duties as such (including legal and accounting fees) shall be borne by the Partnership.  Nothing herein shall be construed to restrict the Partnership from engaging an accounting firm to assist the tax matters partner in discharging its duties hereunder, so long as the compensation paid by the Partnership for such services is reasonable.
Section 10.4    Organizational Expenses.
The Partnership shall elect to deduct expenses, if any, incurred by it in organizing the Partnership as provided in Section 709 of the Code.
Section 10.5    Withholding.
The Special General Partner and each Limited Partner hereby authorize the Partnership to withhold from or pay on behalf of or with respect to such Partner any amount of federal, state, local, or foreign taxes that the General Partner determines that the Partnership is required to withhold or pay with respect to any amount distributable or allocable to such Partner pursuant to this Agreement, including, without limitation, any taxes required to be withheld or paid by the Partnership pursuant to Sections 1441, 1442, 1445 or 1446 of the Code.  Any amount paid on behalf of or with respect to the Special General Partner or a Limited Partner shall constitute a receivable of the Partnership from such Partner, which receivable shall be paid by such Partner within 15 days after notice from the General Partner that such payment must be made unless (i) the Partnership withholds such payment from a distribution which would otherwise be made to the Partner or (ii) the General Partner determines, in its sole and absolute discretion, that such payment may be satisfied out of the available funds of the Partnership which would, but for such payment, be distributed to the Partner.  Any amounts withheld pursuant to the foregoing clauses (i) or (ii) shall be treated as having been distributed to such Partner.  The Special General Partner and each Limited Partner hereby unconditionally and irrevocably grants to the Partnership a security interest in such Partner’s Partnership Interest to secure such Partner’s obligation to pay to the Partnership any amounts required to be paid pursuant to this Section 10.5.  Any amounts payable by the Special General Partner or a Limited Partner hereunder shall bear interest at the base rate on corporate loans at large United States money center commercial banks, as published from time to time in the Wall Street Journal, plus two percentage points (but not higher than the maximum lawful rate) from the date such amount is due (i.e., 15 days after demand) until such amount is paid in full.  The Special General Partner and each Limited Partner shall take such actions as the Partnership or the General Partner shall request in order to perfect or enforce the security interest created hereunder.
ARTICLE 11     
TRANSFERS AND WITHDRAWALS

	
			
	 
	49
	 

Section 11.1    Transfer.
E.    The term “transfer,” when used in this Article 11 with respect to a Partnership Interest, shall be deemed to refer to a transaction by which a Partner purports to assign its Partnership Interest to another Person and includes a sale, assignment, gift (outright or in trust), pledge, encumbrance, hypothecation, mortgage, exchange or any other disposition by law or otherwise.  The term “transfer” when used in this Article 11 does not include any Redemption or exchange for REIT Shares pursuant to Section 8.6, except as otherwise provided herein.  No part of the interest of a Limited Partner shall be subject to the claims of any creditor, any spouse for alimony or support, or to legal process, and may not be voluntarily or involuntarily alienated or encumbered except as may be specifically provided for in this Agreement or consented to by the General Partner and the Special General Partner.
F.    No Partnership Interest shall be transferred, in whole or in part, except in accordance with the terms and conditions set forth in this Article 11.  Any transfer or purported transfer of a Partnership Interest not made in accordance with this Article 11 shall be null and void ab initio unless otherwise consented to by the General Partner and the Special General Partner in their sole and absolute discretion.
Section 11.2    Transfer of the Partnership Interest of the General Partner and the Special General Partner.
L.    The General Partner shall not (i) voluntarily withdraw from the Partnership, (ii) directly or indirectly transfer all or any portion of its interest in the Partnership (except to an entity wholly owned by the General Partner), or (iii) engage in any merger, consolidation, or other combination with or into another Person, sale of all or substantially all of its assets or any reclassification or recapitalization of its outstanding equity interests or undertake a Listing Event (an “Extraordinary Transaction”), without the Consent of the Partners, which may be given or withheld by each Partner in his, her or its sole and absolute discretion.  In addition, if an Extraordinary Transaction would result in the termination of the Advisory Agreement, the Partnership must either (i) purchase the Special General Partner Interest as provided under Section 11.7, or (ii) obtain the Consent of the Special General Partner.  Upon any transfer of a Partnership Interest in accordance with the provisions of this Section 11.2, the transferee shall become a Substitute General Partner for all purposes herein, and shall be vested with the powers and rights of the transferor General Partner, and shall be liable for all obligations and responsible for all duties of the General Partner, once such transferee has executed such instruments as may be necessary to effectuate such admission and to confirm the agreement of such transferee to be bound by all the terms and provisions of this Agreement with respect to the Partnership Interest so acquired.  It is a condition to any transfer otherwise permitted hereunder that the transferee assumes, by operation of law or express agreement, all of the obligations of the transferor General Partner under this Agreement with respect to such transferred Partnership Interest, and no such transfer (other than pursuant to a statutory merger or consolidation wherein all obligations and liabilities of the transferor General Partner are assumed by a successor corporation by operation of law) shall relieve the transferor General Partner of its obligations under this Agreement without the Consent of the Limited Partners, in their reasonable discretion.  In the event the General Partner withdraws from the Partnership in violation of this Agreement or otherwise, or otherwise dissolves or terminates, or upon the Incapacity of the General Partner, all of the remaining Partners may elect to continue the Partnership business by selecting a Substitute General Partner in accordance with the Act.
M.    Notwithstanding any other provision of this Agreement, the Special General Partner shall not transfer all or any portion of its Partnership Interest to any transferee without the consent 

	
			
	 
	50
	 

of the General Partner, which consent may be withheld in the sole and absolute discretion of the General Partner.  Notwithstanding the preceding sentence, however, the Special General Partner shall have the right, at any time, to transfer its Partnership Interest to the General Partner, an Affiliate of the General Partner, W. P. Carey Inc. or an Affiliate of W. P. Carey Inc.
Section 11.3    Limited Partners’ Rights to Transfer.
T.    Prior to the first anniversary of the Effective Date, no Limited Partner shall transfer all or any portion of its Partnership Interest to any transferee without the consent of the General Partner and the Special General Partner, which consent may be withheld in their sole and absolute discretion; provided, however, that any Limited Partner may, at any time, without the consent of the General Partner and the Special General Partner, (i) transfer all or any portion of its Partnership Interest to the General Partner, (ii) transfer all or any portion of its Partnership Interest to an Affiliate, another original Limited Partner or to an Immediate Family Member, subject to the provisions of Section 11.6, (iii) transfer all or any portion of its Partnership Interest to a trust for the benefit of a charitable beneficiary or to a charitable foundation, subject to the provisions of Section 11.6, and (iv) subject to the provisions of Section 11.6, pledge (a “Pledge”) all or any portion of its Partnership Interest to a lending institution, which is not an Affiliate of such Limited Partner, as collateral or security for a bona fide loan or other extension of credit, and transfer such pledged Partnership Interest to such lending institution in connection with the exercise of remedies under such loan or extension or credit, and the transfer of such pledged Partnership Interest by the lender to any transferee.  Each Limited Partner or Assignee (resulting from a transfer made pursuant to clauses (i)-(iv) of the proviso of the preceding sentence) shall have the right to transfer all or any portion of its Partnership Interest, subject to the provisions of Section 11.6 and the satisfaction of each of the following conditions (in addition to the right of each such Limited Partner or Assignee to continue to make any such transfer permitted by clauses (i)-(iv) of such proviso without satisfying either of the following conditions):
(1)    General Partner Right of First Refusal.  The transferring Partner shall give written notice of the proposed transfer to the General Partner, which notice shall state (i) the identity of the proposed transferee, and (ii) the amount and type of consideration proposed to be received for the transferred OP Units.  The General Partner shall have ten (10) business days upon which to give the transferring Partner notice of its election to acquire the OP Units on the proposed terms.  If it so elects, it shall purchase the OP Units on such terms within ten (10) business days after giving notice of such election.  If it does not so elect, the transferring Partner may transfer such OP Units to a third party, on economic terms no more favorable to the transferee than the proposed terms, subject to the other conditions of this Section 11.3.
(2)    Qualified Transferee.  Any transfer of a Partnership Interest shall be made only to Qualified Transferees.  It is a condition to any transfer otherwise permitted hereunder that the transferee assumes by operation of law or express agreement all of the obligations of the transferor Limited Partner under this Agreement with respect to such transferred Partnership Interest and no such transfer (other than pursuant to a statutory merger or consolidation wherein all obligations and liabilities of the transferor Partner are assumed by a successor corporation by operation of law) shall relieve the transferor Partner of its obligations under this Agreement without the approval of the General Partner, in its reasonable discretion.  Notwithstanding the foregoing, any transferee of any transferred Partnership Interest shall be subject to any and all ownership limitations contained in the Charter, which may limit or restrict such transferee’s ability to exercise its Redemption rights, and to the representations in Section 3.4.D.  Any transferee, whether or not admitted as a Substituted Limited Partner, shall take subject to the obligations of the transferor hereunder.  Unless admitted as a Substituted Limited Partner, 

	
			
	 
	51
	 

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.
U.    If a Limited Partner is subject to Incapacity, the executor, administrator, trustee, committee, guardian, conservator, or receiver of such Limited Partner’s estate shall have all the rights of a Limited Partner, but not more rights than those enjoyed by other Limited Partners, for the purpose of settling or managing the estate, and such power as the Incapacitated Limited Partner possessed to transfer all or any part of his or its interest in the Partnership.  The Incapacity of a Limited Partner, in and of itself, shall not dissolve or terminate the Partnership.
V.    The General Partner may prohibit any transfer otherwise permitted under Section 11.3 by a Limited Partner of his or her OP Units if, in the opinion of legal counsel to the Partnership, such transfer would require the filing of a registration statement under the Securities Act by the Partnership or would otherwise violate any federal or state securities laws or regulations applicable to the Partnership or the Partnership Unit.
Section 11.4    Substituted Limited Partners.
E.    No Limited Partner shall have the right to substitute a transferee as a Limited Partner in his or her place (including any transferee permitted by Section 11.3).  The General Partner shall, however, have the right to consent to the admission of a transferee of the interest of a Limited Partner pursuant to this Section 11.4 as a Substituted Limited Partner, which consent may be given or withheld by the General Partner in its sole and absolute discretion.  The General Partner’s failure or refusal to permit a transferee of any such interests to become a Substituted Limited Partner shall not give rise to any cause of action, whether at law or in equity, against the Partnership or any Partner.
F.    A transferee who has been admitted as a Substituted Limited Partner in accordance with this Article 11 shall have all the rights and powers and be subject to all the restrictions and liabilities of a Limited Partner under this Agreement.  The admission of any transferee as a Substituted Limited Partner shall be subject to the transferee executing and delivering to the General Partner an acceptance of all of the terms and conditions of this Agreement (including without limitation, the provisions of Section 2.4 and such other documents or instruments as may be required to effect the admission), each in form and substance satisfactory to the General Partner) and the acknowledgment by such transferee that each of the representations and warranties set forth in Section 3.4 are true and correct with respect to such transferee as of the date of the transfer of the Partnership Interest to such transferee and will continue to be true to the extent required by such representations and warranties.
G.    Upon the admission of a Substituted Limited Partner, the General Partner shall amend Exhibit A to reflect the name, address, number of OP Units, and Percentage Interest of such Substituted Limited Partner and to eliminate or adjust, if necessary, the name, address and interest of the predecessor of such Substituted Limited Partner.
Section 11.5    Assignees.
If the General Partner, in its sole and absolute discretion, does not consent to the admission of any permitted transferee under Section 11.3 as a Substituted Limited Partner, as described in Section 11.4, such transferee shall be considered an Assignee for purposes of this Agreement.  An Assignee shall be entitled to all the rights of an assignee of a limited partnership interest under the Act, including the right to receive distributions from the Partnership and the share of Net Income, Net Loss, gain and loss attributable to the OP Units assigned to such transferee, the rights to transfer the OP Units provided in this 

	
			
	 
	52
	 

Article 11, the right of Redemption provided in Section 8.6, but shall not be deemed to be a holder of OP Units for any other purpose under this Agreement, and shall not be entitled to effect a Consent with respect to such OP Units on any matter presented to the Limited Partners for approval (such Consent remaining with the transferor Limited Partner).  In the event any such transferee desires to make a further assignment of any such Partnership Units, such transferee shall be subject to all the provisions of this Article 11 to the same extent and in the same manner as any Limited Partner desiring to make an assignment of OP Units.  Notwithstanding anything contained in this Agreement to the contrary, as a condition to becoming an Assignee, any prospective Assignee must first execute and deliver to the Partnership an acknowledgment that each of the representations and warranties set forth in Section 3.4 are true and correct with respect to such prospective Assignee as of the date of the prospective assignment of the Partnership Interest to such prospective Assignee and will continue to be true to the extent required by such representations or warranties.
Section 11.6    General Provisions.
A.    No Limited Partner may withdraw from the Partnership other than as a result of (i) a permitted transfer of all of such Limited Partner’s OP Units in accordance with this Article 11 and the transferee(s) of such Partnership Units being admitted to the Partnership as a Substituted Limited Partner or (ii) pursuant to the exercise of its right of Redemption of all of such Limited Partner’s OP Units under Section 8.6; provided that after such transfer, exchange or redemption such Limited Partner owns no Partnership Interest.
B.    Any Limited Partner who shall transfer all of such Limited Partner’s OP Units in a transfer permitted pursuant to this Article 11 where such transferee was admitted as a Substituted Limited Partner or pursuant to the exercise of its rights of Redemption of all of such Limited Partner’s OP Units under Section 8.6 shall cease to be a Limited Partner; provided that after such transfer, exchange or redemption such Limited Partner owns no Partnership Interest.
C.    Transfers pursuant to this Article 11 may only be made on the first day of a fiscal quarter of the Partnership, unless the General Partner otherwise agrees.
D.    If any Partnership Interest is transferred, assigned or redeemed during any quarterly segment of the Partnership’s Partnership Year in compliance with the provisions of this Article 11 or transferred or redeemed pursuant to Section 8.6, on any day other than the first day of a Partnership Year, then Net Income, Net Loss, each item thereof and all other items attributable to such Partnership Interest for such Partnership Year shall be divided and allocated between the transferor Partner and the transferee Partner by taking into account their varying interests during the Partnership Year using a method selected by the General Partner that is in accordance with Section 706(d) of the Code.  Except as otherwise agreed by the General Partner, all distributions of Available Cash with respect to which the Partnership Record Date is before the date of such transfer, assignment, exchange or redemption shall be made to the transferor Partner, and all distributions of Available Cash thereafter, in the case of a transfer or assignment other than a redemption, shall be made to the transferee Partner.
E.    In addition to any other restrictions on transfer herein contained, including without limitation the provisions of this Article 11, in no event may any transfer or assignment of a Partnership Interest by any Partner (including pursuant to a Redemption or exchange for REIT Shares by the Partnership or the General Partner) be made (i) to any person or entity who lacks the legal right, power or capacity to own a Partnership Interest; (ii) in violation of applicable law; (iii) except with the consent of the General Partner, which may be given or withheld in its sole and absolute discretion, of any 

	
			
	 
	53
	 

component portion of a Partnership Interest, such as the Capital Account, or rights to distributions, separate and apart from all other components of a Partnership Interest; (iv) except with the consent of the General Partner, which may be given or withheld in its sole and absolute discretion, if in the opinion of legal counsel to the Partnership such transfer could cause a termination of the Partnership for federal or state income tax purposes (except as a result of the Redemption or exchange for REIT Shares of all Partnership Interests held by all Limited Partners or pursuant to a transaction expressly permitted under Section 11.2); (v) if in the opinion of counsel to the Partnership such transfer could cause the Partnership to cease to be classified as a partnership for federal income tax purposes (except as a result of the Redemption or exchange for REIT Shares of all Partnership Interests held by all Limited Partners); (vi) if such transfer could, in the opinion of counsel to the Partnership, cause the Partnership to become, with respect to any employee benefit plan subject to Title I of ERISA, a “party-in-interest” (as defined in Section 3(14) of ERISA) or a “disqualified person” (as defined in Section 4975(c) of the Code); (vii) if such transfer could, in the opinion of counsel to the Partnership, cause any portion of the assets of the Partnership to constitute assets of any employee benefit plan pursuant to Department of Labor Regulations Section 2510.2-101; (viii) if such transfer requires the registration of such Partnership Interest pursuant to any applicable federal or state securities laws; (ix) except with the consent of the General Partner, which may be given or withheld in its sole and absolute discretion, if such transfer (1) could be treated as effectuated through an “established securities market” or a “secondary market” (or the substantial equivalent thereof) within the meaning of Section 7704 of the Code, (2) could cause the Partnership to become a “publicly traded partnership,” as such term is defined in Sections 469(k)(2) or 7704(b) of the Code, (3) could be in violation of Section 3.4.E(5), or (4) could cause the Partnership to fail one or more of the Safe Harbors (as defined below); (x) if such transfer subjects the Partnership to be regulated under the Investment Company Act of 1940, the Investment Advisors Act of 1940 or the Employee Retirement Income Security Act of 1974, each as amended; (xi) except with the consent of the General Partner, which may be given or withheld in its sole discretion, if the transferee or assignee of such Partnership Interest is unable to make the representations set forth in Section 3.4.C; (xii) if such transfer is made to a lender to the Partnership or any Person who is related (within the meaning of Section 1.752-4(b) of the Regulations) to any lender to the Partnership whose loan constitutes a Nonrecourse Liability, except with the consent of the General Partner, which may be given or withheld in its sole and absolute discretion; and provided, that, as a condition to granting such consent the lender may be required to enter into an arrangement with the Partnership and the General Partner to redeem or exchange for the REIT Shares Amount any OP Units in which a security interest is held simultaneously with the time at which such lender would be deemed to be a partner in the Partnership for purposes of allocating liabilities to such lender under Section 752 of the Code; or (xiii) if in the opinion of legal counsel for the Partnership such transfer could adversely affect the ability of the General Partner to continue to qualify as a REIT or, except with the consent of the General Partner, which may be given or withheld in its sole and absolute discretion, subject the General Partner to any additional taxes under Section 857 or Section 4981 of the Code.
F.    The General Partner shall monitor the transfers of interests in the Partnership (including any acquisition of OP Units by the Partnership or the General Partner) to determine (i) if such interests could be treated as being traded on an “established securities market” or a “secondary market (or the substantial equivalent thereof)” within the meaning of Section 7704 of the Code and (ii) whether such transfers of interests could result in the Partnership being unable to qualify for the “safe harbors” set forth in Regulations Section 1.7704-1 (or such other guidance subsequently published by the IRS setting forth safe harbors under which interests will not be treated as “readily tradable on a secondary market (or the substantial equivalent thereof)” within the meaning of Section 7704 of the Code) (the “Safe Harbors”).  The General Partner shall have the authority (but shall not be required) to take any steps it determines are necessary or appropriate in its sole and absolute discretion to prevent any trading of interests which could 

	
			
	 
	54
	 

cause the Partnership to become a “publicly traded partnership” within the meaning of Code Section 7704, or any recognition by the Partnership of such transfers, or to ensure that one or more of the Safe Harbors is met.
Section 11.7    Call Right Attributable to the Special General Partner Interest.
A.    In the event of a “Trigger Event” (as defined in Section 11.7.B hereof), the Partnership shall have the right (the “Call Right”) to redeem all, or any portion, of the Special General Partner Interest.  The Partnership shall exercise the Call Right by providing the Special General Partner with written notice of its desire to exercise the Call Right within sixty (60) days of the occurrence of a Trigger Event.  The purchase price to be paid by the Partnership for the portion of the Special General Partner Interest that is subject to the Call Right shall equal the Special GP Value minus any breakup fee or similar transaction termination fee payable to the Special General Partner or any of its Affiliates, in any capacity,  in connection with any business combination or other extraordinary corporate transaction between the General Partner, on the one hand, and the Special General Partner and/or its Affiliates, on the other hand, giving rise to the determination of the Special GP Value.  Subject to Section 11.C below, such purchase price shall be paid in cash or in REIT Shares (at the option of the Special General Partner) within one hundred twenty (120) days after the Partnership provides the written notice required under this Section 11.7.A.
B.    For purposes of this Section 11.7, a Trigger Event means at any time after the second anniversary of the Effective Date, the:
(1)    non-renewal of the Advisory Agreement upon the expiration of its then current term;
(2)    termination of the Advisory Agreement for any reason under circumstances where an Affiliate of the Advisor does not serve as the advisor under any replacement advisory agreement; or
(3)    resignation of the Advisor under the Advisory Agreement.
C.    In the event that the Partnership exercises the Call Right as a result of a termination of the Advisory Agreement for “Cause” (as defined in the Advisory Agreement), the Partnership shall have the option to redeem all or a portion of the Special General Partner Interest by issuing its promissory note with (i) a term of five (5) years; (ii) annual installments of principal payable ratably over the term of the note; and (iii) a market rate of interest.
Section 11.8    Put Right of General Partner.
The General Partner shall have the right at any time (the “GP Put Right”) to require the Partnership to redeem any portion of the General Partner Interest for the purpose of providing the General Partner with sufficient funds to enable it to make redemptions of its stock.  The General Partner shall exercise the GP Put Right at any time by providing the Partnership with written notice of its desire to exercise the GP Put Right.  The purchase price to be paid by the Partnership for the portion of the General Partner Interest that the General Partner desires to be redeemed shall equal the fair market value of such portion, which shall be based upon the Fair Market Value of a share of the General Partner’s common stock, and shall be paid in cash within one hundred twenty (120) days after the General Partner provides the written notice required under this Section 11.8.  In the event that the General Partner exercises the GP Put Right, the OP Units held by the General Partner shall be reduced as appropriate.

	
			
	 
	55
	 

ARTICLE 12     
ADMISSION OF PARTNERS
Section 12.1    Admission of Successor General Partner.
A successor to all of the General Partner’s General Partner Interest pursuant to Section 11.2 who is proposed to be admitted as a successor General Partner shall be admitted to the Partnership as the General Partner, effective upon such transfer.  Any such transferee shall carry on the business of the Partnership without dissolution.  In each case, the admission shall be subject to the successor General Partner executing and delivering to the Partnership an acceptance of all of the terms and conditions of this Agreement and such other documents or instruments as may be required to effect the admission.  In the case of such admission on any day other than the first day of a Partnership Year, all items attributable to the General Partner Interest for such Partnership Year shall be allocated between the transferring General Partner and such successor as provided in Article 11.
Section 12.2    Admission of Additional Limited Partners.
W.    After the admission to the Partnership of the initial Limited Partners on the date hereof, a Person who makes a Capital Contribution to the Partnership in accordance with this Agreement shall be admitted to the Partnership as an Additional Limited Partner only upon furnishing to the General Partner (i) evidence of acceptance in form satisfactory to the General Partner of all of the terms and conditions of this Agreement, including, without limitation, the power of attorney granted in Section 2.4 and (ii) such other documents or instruments as may be required in the discretion of the General Partner in order to effect such Person’s admission as an Additional Limited Partner.
X.    Notwithstanding anything to the contrary in this Section 12.2, no Person shall be admitted as an Additional Limited Partner without the consent of the General Partner, which consent may be given or withheld in the General Partner’s sole and absolute discretion.  The admission of any Person as an Additional Limited Partner shall become effective on the date upon which the name of such Person is recorded on the books and records of the Partnership, following the receipt of the Capital Contribution in respect of such Limited Partner and the consent of the General Partner to such admission.  If any Additional Limited Partner is admitted to the Partnership on any day other than the first day of a Partnership Year, then Net Income, Net Loss, each item thereof and all other items allocable among Partners and Assignees for such Partnership Year shall be allocated among such Limited Partner and all other Partners and Assignees by taking into account their varying interests during the Partnership Year using a method selected by the General Partner that is in accordance with Section 706(d) of the Code.  All distributions of Available Cash with respect to which the Partnership Record Date is before the date of such admission shall be made solely to Partners and Assignees other than the Additional Limited Partner (other than in its capacity as an Assignee) and, except as otherwise agreed to by the Additional Limited Partners and the General Partner, all distributions of Available Cash thereafter shall be made to all Partners and Assignees including such Additional Limited Partner.
Section 12.3    Amendment of Agreement and Certificate of Limited Partnership.
For the admission to the Partnership of any Partner, the General Partner shall take all steps necessary and appropriate under the Act to amend the records of the Partnership and, if necessary, to prepare as soon as practical an amendment of this Agreement (including an amendment of Exhibit A) and, if required by law, shall prepare and file an amendment to the Certificate and may for this purpose exercise the power of attorney granted pursuant to Section 2.4.

	
			
	 
	56
	 

ARTICLE 13     
DISSOLUTION AND LIQUIDATION
Section 13.1    Dissolution.
The Partnership shall not be dissolved by the admission of Substituted Limited Partners or Additional Limited Partners or by the admission of a successor General Partner in accordance with the terms of this Agreement.  Upon the withdrawal of the General Partner, any successor General Partner (selected as described in Section 13.1.B below) shall continue the business of the Partnership.  The Partnership shall dissolve, and its affairs shall be wound up, upon the first to occur of any of the following (each a “Liquidating Event”):
Y.    the expiration of its term as provided in Section 2.5;
Z.    an event of withdrawal of the General Partner, as defined in the Act, unless, within 90 days after the withdrawal, all of the remaining Partners agree in writing, in their sole and absolute discretion, to continue the business of the Partnership and to the appointment, effective as of the date of withdrawal, of a substitute General Partner;
AA.    subject to compliance with Section 11.2 an election to dissolve the Partnership made by the General Partner, in its sole and absolute discretion;
BB.    entry of a decree of judicial dissolution of the Partnership pursuant to the provisions of the Act;
CC.    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;
DD.    the Incapacity of the General Partner, unless all of the remaining Partners in their sole and absolute discretion agree in writing to continue the business of the Partnership and to the appointment, effective as of a date prior to the date of such Incapacity, of a substitute General Partner;
EE.    the redemption or exchange for REIT Shares of all Partnership Interests (other than those of the General Partner) pursuant to this Agreement; or
FF.    a final and non-appealable judgment is entered by a court of competent jurisdiction ruling that the General Partner is bankrupt or insolvent, or a final and non-appealable order for relief is entered by a court with appropriate jurisdiction against the General Partner, in each case under any federal or state bankruptcy or insolvency laws as now or hereafter in effect, unless prior to the entry of such order or judgment all of the remaining Partners agree in writing to continue the business of the Partnership and to the appointment, effective as of a date prior to the date of such order or judgment, of a substitute General Partner.
Section 13.2    Winding Up.
H.    Upon the occurrence of a Liquidating Event, the Partnership shall continue solely for the purposes of winding up its affairs in an orderly manner, liquidating its assets, and satisfying the claims of its creditors and Partners.  No Partner shall take any action that is inconsistent with, or not necessary to or appropriate for, the winding up of the Partnership’s business and affairs.  The General 

	
			
	 
	57
	 

Partner (or, in the event there is no remaining General Partner, any Person elected by a Majority in Interest of the Limited Partners (the “Liquidator”)) shall be responsible for overseeing the winding up and dissolution of the Partnership and shall take full account of the Partnership’s liabilities and property and the Partnership property shall be liquidated as promptly as is consistent with obtaining the fair value thereof, and the proceeds therefrom (which may, to the extent determined by the General Partner, include shares of stock in the General Partner) shall be applied and distributed in the following order:
(7)    First, to the payment and discharge of all of the Partnership’s debts and liabilities to creditors other than the Partners;
(8)    Second, to the payment and discharge of all of the Partnership’s debts and liabilities to the General Partner;
(9)    Third, to the payment and discharge of all of the Partnership’s debts and liabilities to the other Partners; and
(10)    The balance, if any, to the General Partner, the Special General Partner and the Limited Partners in proportion to their positive Capital Account balances, determined after taking into account all Capital Account adjustments for all prior periods and the Partnership taxable year during which the liquidation occurs (other than those made as a result of the liquidating distribution set forth in this Section 13.2.A(4)).
I.    Notwithstanding the provisions of Section 13.2.A which require liquidation of the assets of the Partnership, but subject to the order of priorities set forth therein, if prior to or upon dissolution of the Partnership the Liquidator determines that an immediate sale of part or all of the Partnership’s assets would be impractical or would cause undue loss to the Partners, the Liquidator may, in its sole and absolute discretion, defer for a reasonable time the liquidation of any assets except those necessary to satisfy liabilities of the Partnership (including to those Partners as creditors) and/or distribute to the Partners, in lieu of cash, as tenants in common and in accordance with the provisions of Section 13.2.A, undivided interests in such Partnership assets as the Liquidator deems not suitable for liquidation.  Any such distributions in-kind shall be made only if, in the good faith judgment of the Liquidator, such distributions in-kind are in the best interest of the Partners, and shall be subject to such conditions relating to the disposition and management of such properties as the Liquidator deems reasonable and equitable and to any agreements governing the operation of such properties at such time.  The Liquidator shall determine the fair market value of any property distributed in kind using such reasonable method of valuation as it may adopt.
Section 13.3    Capital Contribution Obligation. 
E.    If any Partner has a deficit balance in its Capital Account (after giving effect to all contributions, distributions and allocations for the taxable years, including the year during which such liquidation occurs), such Partner shall have no obligation to make any contribution to the capital of the Partnership with respect to such deficit, and such deficit at any time shall not be considered a debt owed to the Partnership or to any other Person for any purpose whatsoever, except to the extent otherwise expressly agreed to by such Partner and the Partnership.

	
			
	 
	58
	 

Section 13.4    Compliance with Timing Requirements of Regulations.
In the discretion of the Liquidator or the General Partner, a pro rata portion of the distributions that would otherwise be made to the General Partner and Limited Partners pursuant to this Article 13 may be:
(11)    distributed to a trust established for the benefit of the General Partner and Limited Partners for the purposes of liquidating Partnership assets, collecting amounts owed to the Partnership, and paying any contingent or unforeseen liabilities or obligations of the Partnership or of the General Partner arising out of or in connection with the Partnership.  The assets of any such trust shall be distributed to the General Partner and Limited Partners from time to time, in the reasonable discretion of the Liquidator or the General Partner, in the same proportions and the amount distributed to such trust by the Partnership would otherwise have been distributed to the General Partner and Limited Partners pursuant to this Agreement; or
(12)    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 priority set forth in Section 13.2.A as soon as practicable.
Section 13.5    Deemed Distribution and Recontribution.
Notwithstanding any other provision of this Article 13, in the event the Partnership is liquidated within the meaning of Regulations Section 1.704-1(b)(2)(ii)(g) but no Liquidating Event has occurred, the Partnership’s property shall not be liquidated, the Partnership’s liabilities shall not be paid or discharged, and the Partnership’s affairs shall not be wound up.  Instead, the Partnership shall be deemed to have contributed all of its assets and liabilities to a new partnership in exchange for an interest in the new partnership.  Immediately thereafter, the Partnership shall be deemed to distribute interests in the new partnership to the General Partner and Limited Partners in proportion to their respective interests in the Partnership in liquidation of the Partnership.
Section 13.6    Rights of Limited Partners.
Except as otherwise provided in this Agreement, each Limited Partner shall look solely to the assets of the Partnership for the return of his Capital Contribution and shall have no right or power to demand or receive property from the General Partner.  No Limited Partner shall have priority over any other Limited Partner as to the return of his Capital Contributions, distributions or allocations.
Section 13.7    Notice of Dissolution.
In the event a Liquidating Event occurs or an event occurs that would, but for provisions of Section 13.1, result in a dissolution of the Partnership, the General Partner shall, within 30 days thereafter, provide written notice thereof to each of the Partners and to all other parties with whom the Partnership regularly conducts business (as determined in the discretion of the General Partner) and shall publish notice thereof in a newspaper of general circulation in each place in which the Partnership regularly conducts business (as determined in the discretion of the General Partner).

	
			
	 
	59
	 

Section 13.8    Cancellation of Certificate of Limited Partnership.
Upon the completion of the liquidation of the Partnership cash and property as provided in Section 13.2, the Partnership shall be terminated and the Certificate and all qualifications of the Partnership as a foreign limited partnership in jurisdictions shall be cancelled and such other actions as may be necessary to terminate the Partnership shall be taken.
Section 13.9    Reasonable Time for Winding-Up.
A reasonable time shall be allowed for the orderly winding-up of the business and affairs of the Partnership and the liquidation of its assets pursuant to Section 13.2, in order to minimize any losses otherwise attendant upon such winding-up, and the provisions of this Agreement shall remain in effect between the Partners during the period of liquidation.
Section 13.10    Waiver of Partition.
Each Partner hereby waives any right to partition of the Partnership property.
ARTICLE 14     
AMENDMENT OF PARTNERSHIP AGREEMENT; CONSENTS
Section 14.1    Amendments.
J.    The actions requiring consent or approval of the Partners or of the Limited Partners pursuant to this Agreement, including Section 7.3, or otherwise pursuant to applicable law, are subject to the procedures in this Article 14.
K.    Amendments to this Agreement requiring the consent or approval of Limited Partners may be proposed by the General Partner or by Limited Partners holding twenty-five percent (25%) or more of the Partnership Interests held by Limited Partners.  Following such proposal, the General Partner shall submit any proposed amendment to the Partners or to the Limited Partners, as applicable.  The General Partner shall seek the written consent of the Limited Partners on the proposed amendment or shall call a meeting to vote thereon and to transact any other business that it may deem appropriate.  For purposes of obtaining a written consent, the General Partner may require a response within a reasonable specified time, but not less than 15 days, and failure to respond in such time period shall constitute a consent which is consistent with the General Partner’s recommendation (if so recommended) with respect to the proposal; provided, that, an action shall become effective at such time as requisite consents are received even if prior to such specified time.
L.    No amendment to this Agreement that would adversely affect the rights and interests of the Special General Partner may be made without the prior written consent of the Special General Partner.
Section 14.2    Action by the Partners.
F.    Meetings of the Partners may be called by the General Partner and shall be called upon the receipt by the General Partner of a written request by Limited Partners holding twenty-five percent (25%) or more of the Partnership Interests held by Limited Partners.  The notice shall state the nature of the business to be transacted.  Notice of any such meeting shall be given to all Partners not less than seven days nor more than 30 days prior to the date of such meeting.  Partners may vote in person or 

	
			
	 
	60
	 

by proxy at such meeting.  Whenever the vote or Consent of the Limited Partners or of the Partners is permitted or required under this Agreement, such vote or Consent may be given at a meeting of Partners or may be given in accordance with the procedure prescribed in Section 14.1.
G.    Any action required or permitted to be taken at a meeting of the Partners may be taken without a meeting if a written consent setting forth the action so taken is signed by the percentage as is expressly required by this Agreement for the action in question.  Such consent may be in one instrument or in several instruments, and shall have the same force and effect as a vote of the Percentage Interests of the Partners (expressly required by this Agreement).  Such consent shall be filed with the General Partner.  An action so taken shall be deemed to have been taken at a meeting held on the effective date so certified.
H.    Each Limited Partner may authorize any Person or Persons to act for him by proxy on all matters in which a Limited Partner is entitled to participate, including waiving notice of any meeting, or voting or participating at a meeting.  Every proxy must be signed by the Limited Partner or his attorney-in-fact.  No proxy shall be valid after the expiration of 11 months from the date thereof unless otherwise provided in the proxy.  Every proxy shall be revocable at the pleasure of the Limited Partner executing it.
I.    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.
J.    On matters on which Limited Partners are entitled to vote, each Limited Partner shall have a vote equal to the number of OP Units held.
ARTICLE 15     
GENERAL PROVISIONS
Section 15.1    Addresses and Notice.
Any notice, demand, request or report required or permitted to be given or made to a Partner or Assignee under this Agreement shall be in writing and shall be deemed given or made when delivered in person or when sent by first class United States mail or by other means of written communication to the Partner or Assignee at the address set forth in Exhibit A or such other address as the Partners shall notify the General Partner in writing.
Section 15.2    Titles and Captions.
All article or section titles or captions in this Agreement are for convenience only.  They shall not be deemed part of this Agreement and in no way define, limit, extend or describe the scope or intent of any provisions hereof.  Except as specifically provided otherwise, references to “Articles” and “Sections” are to Articles and Sections of this Agreement.
Section 15.3    Pronouns and Plurals.
Whenever the context may require, any pronoun used in this Agreement shall include the corresponding masculine, feminine or neuter forms, and the singular form of nouns, pronouns and verbs shall include the plural and vice versa.

	
			
	 
	61
	 

Section 15.4    Further Action.
The parties shall execute and deliver all documents, provide all information and take or refrain from taking action as may be necessary or appropriate to achieve the purposes of this Agreement.
Section 15.5    Binding Effect.
This Agreement shall be binding upon and inure to the benefit of the parties hereto and their heirs, executors, administrators, successors, legal representatives and permitted assigns.
Section 15.6    Creditors.
Other than as expressly set forth herein with respect to Indemnitees, none of the provisions of this Agreement shall be for the benefit of, or shall be enforceable by, any creditor of the Partnership.
Section 15.7    Waiver.
No failure or delay by any party to insist upon the strict performance of any covenant, duty, agreement or condition of this Agreement or to exercise any right or remedy consequent upon any breach thereof shall constitute waiver of any such breach or any other covenant, duty, agreement or condition.
Section 15.8    Counterparts.
This Agreement may be executed in counterparts, all of which together shall constitute one agreement binding on all the parties hereto, notwithstanding that all such parties are not signatories to the original or the same counterpart.  Each party shall become bound by this Agreement immediately upon affixing its signature hereto.
Section 15.9    Applicable Law.
This Agreement shall be construed in accordance with and governed by the laws of the State of Delaware, without regard to the principles of conflicts of law.
Section 15.10    Invalidity of Provisions.
If any provision of this Agreement is or becomes invalid, illegal or unenforceable in any respect, the validity, legality and enforceability of the remaining provisions contained herein shall not be affected thereby.
Section 15.11    Entire Agreement.
This Agreement contains the entire understanding and agreement among the Partners with respect to the subject matter hereof and supersedes any other prior written or oral understandings or agreements among them with respect thereto.
Section 15.12    No Rights as Stockholders.
Nothing contained in this Agreement shall be construed as conferring upon the holders of OP Units any rights whatsoever as stockholders of the General Partner, including without limitation any right to receive dividends or other distributions made to stockholders of the General Partner or to vote or to 

	
			
	 
	62
	 

consent or to receive notice as stockholders in respect of any meeting of stockholders for the election of directors of the General Partner or any other matter.
[THE REMAINDER OF THIS PAGE IS INTENTIONALLY LEFT BLANK]

	
			
	 
	63
	 

IN WITNESS WHEREOF, the parties hereto have executed this Amended and Restated Agreement of Limited Partnership as of the date first written above.
		
	General Partner:
	CORPORATE PROPERTY ASSOCIATES 18- GLOBAL INCORPORATED, a Maryland corporation

		
	By:
	/s/ Thomas E. Zacharias     
Name:  Thomas E. Zacharias 
Title:    Chief Operating Officer

		
	Special General Partner:
	WPC-CPA:18 HOLDINGS, LLC, a Delaware limited liability company

By: WPC HOLDCO LLC, a Maryland limited liability company, as the sole member
By: W. P. CAREY INC., a Maryland corporation, as the sole member
		
	By:
	/s/ Susan C. Hyde     
Name:  Susan C. Hyde 
Title:    Managing Director and Corporate Secretary

	
	
	Signature Page to Agreement of Limited Partnership

CPA:18 LIMITED PARTNERSHIP

EXHIBIT A

PARTNERS, CAPITAL CONTRIBUTIONS, PERCENTAGE INTERESTS

As of March 25, 2014

	
					
	

Names and Addresses
	Agreed Value of Capital Contribution
	Class A OP Units

	Class C 
OP Units
	Percentage Interest

	General Partner

	 
	 
	 
	 

	Corporate Property Associates 18 - Global Incorporated
50 Rockefeller Plaza 
New York, New York 10020

	$6,108,161a
	678,684.55 b
	 
	1.00000%

	Special General Partner

	 
	 
	 
	 

	WPC-CPA®:18 Holdings, LLC
207 E. Westminster
50 Rockefeller Plaza 
New York, New York 10020

	$209,000
	23,222
	 
	0.03422%

	Limited Partners

	 
	 
	 
	 

	Corporate Property Associates 18 - Global Incorporated
50 Rockefeller Plaza 
New York, New York 10020

	$604,498,928a
	67,166,547.55 b
	 
	98.96578%

	 
	 
	 
	 
	 

		
	a. 
	Corporate Property Associates 18 - Global Incorporated will be deemed to have contributed the entire proceeds generated by the initial offering of the REIT Shares.  Of the proceeds, Corporate Property Associates 18 - Global Incorporated shall contribute a sufficient amount as a general partner to result in an initial one percent (1%) Percentage Interest.  The remainder shall be contributed by Corporate Property Associates 18 - Global Incorporated in its capacity as a limited partner.  Consistent with the documents underlying the initial offering of the REIT Shares, the Partnership will be deemed to have paid all costs associated with the offering.

		
	b. 
	The number of OP Units to be issued shall be equal to One (1) for each $9.00 of Capital Contributions of the Partner.  Fractional OP Units shall be permitted.

		
	c. 
	The Percentage Interests of the Partners shall be determined in accordance with the definition of Percentage Interest set forth in Article 1.

CPA:18 LIMITED PARTNERSHIP

EXHIBIT B

NOTICE OF REDEMPTION

The undersigned hereby irrevocably (i) transfers ____________ [Class A][Class C] OP Units in CPA:18 Limited Partnership in accordance with the terms of the Agreement of Limited Partnership of CPA:18 Limited Partnership and the rights of Redemption referred to therein, (ii) surrenders such [Class A][Class C] OP Units and all right, title and interest therein, and (iii) directs that the cash (or, if applicable, REIT Shares of the corresponding Class of OP Units being redeemed) deliverable upon Redemption or exchange be delivered to the address specified below within ten (10) days of the receipt of this Notice of Redemption, and if applicable, that such REIT Shares of the corresponding Class of OP Units being redeemed be registered or placed in the name(s) and at the address(es) specified below.

Dated:    
Name of Partner:

    
(Signature of Partner)
    
(Street Address)
    
(City) (State) (Zip Code)

Issue REIT Shares of the corresponding Class of OP Units being redeemed to:

Please insert social security or identifying number:

Name:

CPA:18 LIMITED PARTNERSHIP

EXHIBIT C

FORM OF [CLASS A][CLASS C] OP UNIT CERTIFICATE
CERTIFICATE FOR OP UNITS OF
CPA:18 LIMITED PARTNERSHIP

No.                                                UNITS

Corporate Property Associates 18 - Global Incorporated, as the General Partner of CPA:18 Limited Partnership, a Delaware limited partnership (the “Operating Partnership”), hereby certifies that ____________________ is a Limited Partner of the Operating Partnership whose Partnership Interests therein, as set forth in the Agreement of Limited Partnership of the Operating Partnership dated [____], 2013, as amended (the “Partnership Agreement”), under which the Operating Partnership is existing (copies of which are on file at the Operating Partnership’s principal office at 50 Rockefeller Plaza, New York, New York 10020), represent _______ [Class A][Class C] OP Units in the Operating Partnership. 

THE UNITS REPRESENTED BY THIS CERTIFICATE OR INSTRUMENT MAY NOT BE TRANSFERRED, SOLD, ASSIGNED, PLEDGED, HYPOTHECATED OR OTHERWISE DISPOSED OF UNLESS SUCH TRANSFER, SALE, ASSIGNMENT, PLEDGE, HYPOTHECATION OR OTHER DISPOSITION COMPLIES WITH THE PROVISIONS OF THE PARTNERSHIP AGREEMENT, AS IT MAY BE AMENDED FROM TIME TO TIME (A COPY OF WHICH IS ON FILE WITH THE OPERATING PARTNERSHIP).  EXCEPT AS OTHERWISE PROVIDED IN THE PARTNERSHIP AGREEMENT, THE UNITS EVIDENCED HEREBY HAVE 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 GENERAL PARTNER AN OPINION OF COUNSEL SATISFACTORY TO THE GENERAL PARTNER, 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.  THIS CERTIFICATE EVIDENCES AN INTEREST IN THE OPERATING PARTNERSHIP AND SHALL BE A SECURITY GOVERNED BY ARTICLE 8 OF THE UNIFORM COMMERCIAL CODE AS IN EFFECT IN THE STATE OF NEW YORK AND, TO THE EXTENT PERMITTED BY APPLICABLE LAW, EACH OTHER APPLICABLE JURISDICTION.

CPA:18 LIMITED PARTNERSHIP

EXHIBIT D

SCHEDULE OF LIMITED PARTNERS’ OWNERSHIP WITH RESPECT TO TENANTS

None.

CPA:18 LIMITED PARTNERSHIP

EXHIBIT E

SCHEDULE OF REIT SHARES ACTUALLY OR CONSTRUCTIVELY OWNED BY LIMITED PARTNER’S OTHER THAN THOSE ACQUIRED PURSUANT TO AN EXCHANGE

None.

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00242-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00242-of-00352.parquet"}]]