Document:

Exhibit

Exhibit 10.9

Certain personally identifiable information contained in this document, marked by brackets as [***], has been omitted from this exhibit pursuant to Item 601(a)(6) under Regulation S-K.

CONFIDENTIALITY, NON-SOLICITATION and
CHANGE OF CONTROL AGREEMENT
This Confidentiality, Non-Solicitation and Change of Control Agreement (“Agreement”) is made effective as of March 31, 2020, by and between Equitrans Midstream Corporation, a Pennsylvania corporation (Equitrans Midstream Corporation and its subsidiary companies are hereinafter collectively referred to as the “Company”), and Brian P Pietrandrea (the “Employee”).
WITNESSETH:
WHEREAS, the parties intend that this Agreement supersede in its entirety the Confidentiality, Non-Solicitation and Non-Competition Agreement between Company and the Employee dated March 7, 2013, as amended through the date hereof and all prior versions thereof (the “Non-Competition Agreement”);
WHEREAS, in order to protect the business, goodwill and confidential information of the Company, the Company desires to obtain or continue to obtain certain confidentiality and non-solicitation covenants from the Employee and the Employee desires to agree to such covenants in exchange for, among other things, the Company’s promise herein to pay certain severance benefits to the Employee subject to the provisions of Section 2 below; and
WHEREAS, in order to accomplish the foregoing objectives, the Company and the Employee desire to enter into this Agreement which, among other things, reflects the parties’ best efforts to comply with the provisions of Section 409A of the Internal Revenue Code of 1986, as amended (the “Code”), to the benefit of the Employee.
NOW, THEREFORE, in consideration of the promises and the mutual covenants and agreements contained herein, and intending to be legally bound hereby, the parties hereto agree as follows:
1.Confidentiality of Information and Nondisclosure.  The Employee acknowledges and agrees that his/her employment by the Company necessarily involves his/her knowledge of and access to confidential and proprietary information pertaining to the business of the Company.  Accordingly, the Employee agrees that at all times during the term of this Agreement and for as long as the information remains confidential after the termination of the Employee's employment, he/she will not, directly or indirectly, without the express written authority of the Company, unless directed by applicable legal authority having jurisdiction over the Employee, disclose to or use, or knowingly permit to be so disclosed or used, for the benefit of himself/herself, any person, corporation or other entity other than the Company, (a) any information concerning any financial matters, employees of the Company, customer relationships, competitive status, supplier matters, internal organizational matters, current or future plans, or other business affairs of or relating to the Company, (b) any management, operational, trade, 

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technical or other secrets or any other proprietary information or other data of the Company, or (c) any other information related to the Company which has not been published and is not generally known outside of the Company.  The Employee acknowledges that all of the foregoing, constitutes confidential and proprietary information, which is the exclusive property of the Company.  
Nothing in this Agreement prohibits the Employee from: (a) reporting possible violations of federal, state, or local law or regulation to any governmental agency or entity, or from making other disclosures (including of confidential information) that are protected under the whistleblower provisions of federal, state, or local law or regulation; or (b) disclosing trade secrets when the disclosure is solely for the purpose of: (i) reporting possible violations of federal, state, or local law or regulation to any governmental agency or entity; (ii) working with legal counsel in order to determine whether possible violations of federal, state, or local law or regulation exist; or (iii) filing a complaint or other document in a lawsuit or other proceeding, if such filing is made under seal. Any disclosures of trade secrets must be consistent with 18 U.S.C. §1833.
2.    Enhanced Severance Benefits Related to Change of Control.  In lieu of any payments and/or benefits to which the Employee may be entitled under the Company’s Severance Pay Plan, as amended from time to time, the Company will provide the Employee the following Enhanced Severance Benefits (as defined below) subject to the terms of this Section if there is a Change of Control (as defined below) and, either: the Company terminates the Employee’s employment other than for Cause (as defined below) within 24 months following the date of such Change of Control; or the Employee terminates his/her employment for Good Reason (as defined below) following the date of such Change of Control.
a.    For purposes of this Section, “Enhanced Severance Benefits” include:
		
	i.
	A lump sum payment in an amount equal to twelve (12) months of the Employee’s base salary at the higher of the rate of salary in effect at the time of such termination or the rate of salary in effect immediately prior to the date of the Change of Control;

		
	ii.
	A lump sum payment in the amount of fifteen thousand dollars $15,0000; and

		
	iii.
	A lump sum payment equal to the product of (i) twelve (12) and (ii) 100% of the then-current Consolidated Omnibus Budget Reconciliation Act of 1985 monthly rate for family coverage.

b.    The Company’s obligation to provide Enhanced Severance Benefits shall be contingent upon:
		
	i.
	The Employee’s execution of a release of clams in a form acceptable to the Company; and

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	ii.
	The Employee’s compliance with his/her obligations hereunder, including but not limited to the obligations set forth in Sections 1 and 3.

c.    All Enhanced Severance Benefits payable to the Employee pursuant to this Section shall be made in a lump sum within 60 days following the Employee’s execution and delivery to the Company of the release identified in Subsection (b)(i) above.  The payments provided under this Section 2 shall be subject to applicable tax and payroll withholdings.  Notwithstanding the foregoing, in the event the 60 day period described in this Subsection (c) causes the lump sum payment to become payable after March 15 of the year following the year in which the Employee’s employment was terminated, the payment date shall be accelerated and the lump sum payment shall occur on or before March 15 of the year following the year in which the Employee’s employment was terminated.  
d.    For purposes of this Agreement, “Change of Control” shall mean any of the following events:
		
	i.
	The sale or other disposition by the Company of all or substantially all of its assets to a single purchaser or to a group of purchasers, other than to a corporation with respect to which, following such sale or disposition, more than eighty percent (80%) of, respectively, the then outstanding shares of common stock and the combined voting power of the then outstanding voting securities entitled to vote generally in the election of the Company’s Board of Directors is then owned beneficially, directly or indirectly, by all or substantially all of the individuals and entities who were the beneficial owners, respectively, of the outstanding common stock and the combined voting power of the then outstanding voting securities immediately prior to such sale or disposition in substantially the same proportion as their ownership of the outstanding common stock and voting power immediately prior to such sale or disposition;

		
	ii.
	The acquisition in one (1) or more transactions by any person or group, directly or indirectly, of beneficial ownership of thirty percent (30%) or more of the outstanding shares of common stock or the combined voting power of the then outstanding voting securities of the Company entitled to vote generally in the election of the Company’s Board of Directors; provided, however, that the following shall not constitute a Change of Control:  (A) any acquisition by the Company or any of its subsidiaries, or any employee benefit plan (or related trust) sponsored or maintained by the Company or any of its subsidiaries and (B) an acquisition by any person or group of persons of not more than forty percent (40%) of the outstanding Shares or the combined voting power of the then outstanding voting securities of the Company if such acquisition resulted from the issuance of capital stock by the Company and the issuance and the acquiring person or group was approved in advance of such issuance by at least two-thirds (2/3) of the Continuing Directors (as defined below) then in office;

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	iii.
	The Company’s termination of its business and liquidation of its assets;

		
	iv.
	There is consummated a merger, consolidation, reorganization, share exchange or similar transaction involving the Company (including a triangular merger), in any case, unless immediately following such transaction: (A) all or substantially all of the persons who were the beneficial owners of the outstanding common stock and outstanding voting securities of the Company immediately prior to the transaction beneficially own, directly or indirectly, more than fifty percent (50%) of the outstanding shares of common stock and the combined voting power of the then outstanding voting securities entitled to vote generally in the election of directors of the corporation resulting from such transaction (including a corporation or other person which as a result of such transaction owns the Company or all or substantially all of the Company’s assets through one (1) or more subsidiaries (a “Parent Company”)) in substantially the same proportion as their ownership of the common stock and other voting securities of the Company immediately prior to the consummation of the transaction, (B) no person (other than (1) the Company, any employee benefit plan sponsored or maintained by the Company or, if reference was made to equity ownership of any Parent Company for purposes of determining whether the foregoing clause (A) is satisfied in connection with the transaction, such Parent Company, or (2) any person or group that satisfied the requirements of the foregoing subsection (ii)(B)) beneficially owns, directly or indirectly, thirty percent (30%) or more of the outstanding shares of common stock the combined voting power of the voting securities entitled to vote generally in the election of directors of the corporation resulting from such transaction and (C) individuals who were members of the Company’s Board of Directors immediately prior to the consummation of the transaction constitute at least a majority of the members of the board of directors resulting from such transaction (or, if reference was made to equity ownership of any Parent Company for purposes of determining whether the foregoing clause (A) is satisfied in connection with the transaction, such Parent Company); or

		
	v.
	The following individuals (sometimes referred to herein as “Continuing Directors”) cease for any reason to constitute a majority of the number of directors then serving: individuals who, on the date hereof, constitute the entire Board of Directors and any new director (other than a director whose initial assumption of office is in connection with an actual or threatened election contest, including but not limited to a consent solicitation, relating to the election of directors of the Company) whose appointment or election by the Company’s Board of Directors or nomination for election by the Company’s shareholders was approved by a vote of at least two-thirds (2/3) of the directors then still in office who 

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either were directors on the date hereof or whose appointment, election or nomination for election was previously so approved.
The foregoing shall be construed and interpreted in a manner that is compliant with Section 409A of the Code.
Notwithstanding the foregoing, the consummation of the transactions contemplated by (i) the Agreement and Plan of Merger, dated as of February 26, 2020, by and among the Company, EQM LP Corporation, LS Merger Sub, LLC, EQM Midstream Partners, LP (the “Partnership”), and EQGP Services, LLC and (ii) the Preferred Restructuring Agreement, dated as of February 26, 2020, by and among the Company, the Partnership, and the investors set forth on Schedule I thereto, will not constitute a Change of Control.

e.    Solely for purposes of this Agreement, “Cause” shall include: (i) the Employee’s conviction of a felony, a crime of moral turpitude or fraud or the Employee having committed fraud, misappropriation or embezzlement in connection with the performance of the Employee’s duties; (ii) the Employee’s willful and repeated failures to substantially perform assigned duties; or (iii) the Employee’s violation of any provision of this Agreement or express significant policies of the Company.  If the Company terminates the Employee’s employment for Cause, the Company shall give the Employee written notice setting forth the reason for the Employee’s termination not later than 30 days after such termination.
f.    Solely for purposes of this Agreement, “Good Reason” shall mean the Employee’s resignation within 90 days after (but in all cases prior to the second anniversary of such Change of Control): (i) a reduction in the Employee’s base salary of 10% or more (unless the reduction is applicable to all similarly situated employees); (ii) a reduction in the Employee’s annual short-term bonus target by the greater of (A) 10 percent and (B) 5 percentage points of the Employee’s target bonus percentage, unless the reduction is applicable to all similarly situated employees; (iii) a significant diminution in the Employee’s job responsibilities, duties or authority; (iv) a change in the geographic location of the Employee’s primary reporting location of more than 50 miles; and/or (v) any other action or inaction that constitutes a material breach by the Company of any written employment-related agreement between the Employee and the Company, including this Agreement.  
A termination by the Employee shall not constitute termination for Good Reason unless the Employee first delivers to the General Counsel of the Company written notice: (i) stating that the Employee intends to resign for Good Reason pursuant to this Agreement; and (ii) setting forth with specificity the occurrence deemed to give rise to a right to terminate for Good Reason (which notice must be given no later than 90 days after the initial occurrence of such event).  The Company shall have a reasonable period of time (not less than 30 days) to take action to correct, rescind or substantially reverse the occurrence supporting termination for Good Reason as identified by the Employee.  Failure by the Company to act or respond to the written notice shall not be deemed to be an admission that Good Reason exists.  
3.    Non-Solicitation.  In consideration for the benefits described in Section 2 hereof and the rescission of the Non-Competition Agreement, the Employee agrees:

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a.    While the Employee is employed by the Company and for a period of twelve (12) months after the date of the Employee’s termination of employment with the Company for any reason, the Employee shall not (directly or indirectly) on his/her own behalf or on behalf of any other person or entity solicit or induce, or cause any other person or entity to solicit or induce, or attempt to solicit or induce, any employee, consultant, vendor or independent contractor to leave the employ of or engagement by the Company or its successors, assigns or affiliates, or to violate the terms of their contracts with the Company.
b.    For a period of twelve (12) months following the termination of the Employee's employment with the Company for any reason, including without limitation termination for Cause or without Cause, the Employee shall not, directly or indirectly, solicit the business of, or do business with:
		
	i.
	any customer that the Employee approached, solicited or accepted business from on behalf of the Company, and/or was provided confidential or proprietary information about while employed by the Company within the one (1) year period preceding the Employee's separation from the Company; and

		
	ii.
	any prospective customer of the Company who was identified to or by the Employee and/or who the Employee was provided confidential or proprietary information about while employed by the Company within the one (1) year period preceding the Employee's separation from the Company, for purposes of marketing, selling and/or attempting to market or sell products and services which are the same as or similar to any product or service the Company offers within the last two (2) years prior to the end of the Employee's employment with the Company, and/or, which are the same as or similar to any product or service the Company has in process over the last two (2) years prior to the end of the Employee's employment with the Company to be offered in the future.

4.    Severability.  The provisions of this Agreement are severable.  To the extent that any provision of this Agreement is deemed unenforceable in any court of law, the parties intend that such provision be construed by such court in a manner to make it enforceable and the validity, legality and enforceability of the remaining provisions shall not in any way be affected or impaired thereby.
5.    Reasonable and Necessary Agreement.  The Employee acknowledges and agrees that:  (a) this Agreement is necessary for the protection of the legitimate business interests of the Company; (b) the restrictions contained in this Agreement are reasonable; (c) the Employee will be fully able to earn an adequate livelihood for the Employee and the Employee’s dependents if the non-solicitation provisions contained in this Agreement are enforced against the Employee; and (d) the Employee has received adequate and valuable consideration for entering into this Agreement.

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6.    Injunctive Relief and Attorneys’ Fees.  The Employee stipulates and agrees that any breach of this Agreement by the Employee will result in immediate and irreparable harm to the Company, the amount of which will be extremely difficult to ascertain, and that the Company could not be reasonably or adequately compensated by damages in an action at law.  For these reasons, the Company shall have the right, without objection from the Employee, to obtain such preliminary, temporary or permanent mandatory or restraining injunctions, orders or decrees as may be necessary to protect the Company against, or on account of, any breach by the Employee of Sections 1 or 3 hereof.  In the event the Company obtains any such injunction, order, decree or other relief, in law or in equity: (a) the Employee shall be responsible for reimbursing the Company for all costs associated with obtaining the relief, including reasonable attorneys’ fees and expenses and costs of suit; and (b) the duration of any violations of Sections 1 and 3 shall be added to the twelve (12) months restricted period specified in Section 3.  Such right to equitable relief is in addition to the remedies the Company may have to protect its rights at law, in equity or otherwise.
7.    Binding Agreement.  This Agreement shall be binding upon and inure to the benefit of the successors and assigns of the Company.
8.    Governing Law/Consent to Jurisdiction and Venue.  This Agreement shall be governed by and construed in accordance with the laws of the Commonwealth of Pennsylvania.  For the purpose of any suit, action or proceeding arising out of or relating to this Agreement, the Employee irrevocably consents and submits to the jurisdiction and venue of any state or federal court located in Allegheny County, Pennsylvania.  The Employee agrees that service of the summons and complaint and all other process which may be served in any such suit, action or proceeding may be effected by mailing by registered mail a copy of such process to the Employee at the address set forth below (or such other address as the Employee shall provide to the Company in writing).  The Employee irrevocably waives any objection which he/she may now have or hereafter has to the venue of any such suit, action or proceeding brought in such court and any claim that such suit, action or proceeding brought in such court has been brought in an inconvenient forum and agrees that service of process in accordance with this Section will be deemed in every respect effective and valid personal service of process upon the Employee.  Nothing in this Agreement will be construed to prohibit service of process by any other method permitted by law.  The provisions of this Section will not limit or otherwise affect the right of the Company to institute and conduct an action in any other appropriate manner, jurisdiction or court.  The Employee agrees that final judgment in such suit, action or proceeding will be conclusive and may be enforced in any other jurisdiction by suit on the judgment or in any other manner provided by law.
9.    Employment at Will.  The Employee acknowledges that he/she is employed at‐will and for no definite term.  This means that either party may terminate the employment relationship at any time for any or no reason.
10.    Arbitration of Employment Claims.  In the event that the Employee does not execute a release of all claims pursuant to Section 2(b) above, any dispute arising out of or relating to the Employee’s employment or termination of employment with the Company shall be resolved by the sole and exclusive means of binding arbitration in accordance with the terms of the 

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Company’s Alternative Dispute Resolution Program Policy (the “ADR Program”).  Consistent with the provisions of the ADR Program, the parties further agree that any dispute arising out of or relating to their obligations under this Agreement itself, including but not limited to the Company’s obligations under Section 2 and the Employee’s obligations under Sections 1 and 3 above, shall not be subject to binding arbitration under the ADR Program.
11.    Internal Revenue Code Section 409A.
a.    General.  This Agreement shall be interpreted and administered in a manner so that any amount or benefit payable hereunder shall be paid or provided in a manner that is either exempt from or compliant with the requirements of Section 409A of the Code and applicable Internal Revenue Service guidance and Treasury Regulations issued thereunder. Nevertheless, the tax treatment of the benefits provided under the Agreement is not warranted or guaranteed.  Neither the Company nor its directors, officers, employees or advisers shall be held liable for any taxes, interest, penalties or other monetary amounts owed by the Employee as a result of the application of Section 409A of the Code.
b.    Separation from Service.  For purposes of the Agreement, the term “termination,” when used in the context of a condition to, or the timing of, a payment hereunder, shall be interpreted to mean a “separation from service” as such term is used in Section 409A of the Code.
c.    Six-Month Delay in Certain Circumstances.  Notwithstanding anything in this Agreement to the contrary, if any amount or benefit that would constitute non-exempt “deferred compensation” for purposes of Section 409A of the Code (“Non-Exempt Deferred Compensation”) would otherwise be payable or distributable under this Agreement by reason of the Employee’s separation from service during a period in which the Employee is a Specified Employee (as defined below), then, subject to any permissible acceleration of payment by the Company under Treas. Reg. Section 1.409A-3(j)(4)(ii) (domestic relations order), (j)(4)(iii) (conflicts of interest), or (j)(4)(vi) (payment of employment taxes):
		
	i.
	the amount of such Non-Exempt Deferred Compensation that would otherwise be payable during the six-month period immediately following the Employee’s separation from service will be accumulated through and paid or provided on the first day of the seventh month following the Employee’s separation from service (or, if the Employee dies during such period, within 30 days after the Employee’s death) (in either case, the “Required Delay Period”); and

		
	ii.
	the normal payment or distribution schedule for any remaining payments or distributions will resume at the end of the Required Delay Period.

For purposes of this Agreement, the term “Specified Employee” has the meaning given such term in Code Section 409A and the final regulations thereunder.
d.    Timing of Release of Claims.  Whenever in this Agreement a payment or benefit is conditioned on the Employee’s execution of a release of claims, such release must be 

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executed and all revocation periods shall have expired within 60 days after the date of termination; failing which such payment or benefit shall be forfeited.  If such payment or benefit constitutes Non-Exempt Deferred Compensation, and if such 60-day period begins in one calendar year and ends in the next calendar year, the payment or benefit shall not be made or commence before the second such calendar year, even if the release becomes irrevocable in the first such calendar year.  In other words, the Employee is not permitted to influence the calendar year of payment based on the timing of his/her signing of the release.
12.    Entire Agreement.  This Agreement contains the entire agreement between the parties hereto with respect to the subject matter hereof and supersedes all prior agreements and understandings, oral or written, including, for the avoidance of doubt, the Non-Competition Agreement.  This Agreement may not be changed, amended, or modified, except by a written instrument signed by the parties; provided, however, that the Company may amend this Agreement from time to time without the Employee’s consent to the extent deemed necessary or appropriate, in its sole discretion, to effect compliance with Section 409A of the Code, including regulations and interpretations thereunder, which amendments may result in a reduction of benefits provided hereunder and/or other unfavorable changes to the Employee.  
IN WITNESS WHEREOF, the Company has caused this Agreement to be executed by its officers thereunto duly authorized, and the Employee has hereunto set his hand, all as of the day and year first above written.
	
		
	EQUITRANS MIDSTREAM CORPORATION
	EMPLOYEE:

	By: _/s/ Anne M. Naqi_______________
      (Signature)

	_/s/ Brian P. Pietrandrea____________
(Signature)

Address:

__[***]_____________________________

__________________________________

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                                                                     EXHIBIT 10.3                             ~'\1ENDED AND  RESTATED                        LIMITED PARTNERSHIP AGREEMENT                                        OF           STEADFAST SECURE INCOME REIT OPERA TING PARTNERSHIP, L.P.                        A DELAWARE LIMITED PARTNERSHIP                                SEPTEMBER 28, 2009    LEGAL02/3 l274438v2 

 

                              TABLE OF CONTENTS    ARTICLE 1 DEFINED TERMS .................................................................................................. 1    ARTICLE 2 PARTNERSHIP FORMATION AND IDENTIFICATION ................................ 6       2.1     Formation ................................................................................................................. 6       2.2     Name, Office and Registered Agent. ........................................................................ 6       2.3     Term and Dissolution ............................................................................................... 7       2.4     Filing of Certificate and Perfection of Limited Partnership ..................................... 7    ARTICLE 3 BUSINESS OF THE PARTNERSHIP ................................................................... 7    ARTICLE 4 CAPITAL CONTRIBUTIONS AND ACCOUNTS ............................................. 8       4.1    Capital Contributions ................................................................................................ 8       4.2    Additional Capital Contributions and Issuances of Additional Partnership                  Interests ............................................................................................................. 8       4.3    Additional Funding ................................................................................................... 9       4.4    Capital Accounts ...................................................................................................... 9       4.5    No Interest on Contributions .................................................................................... 9      4.6     Return of Capital Contributions ............................................................................... 9      4.7     No Third Party Beneficiary ...................................................................................... 9   ARTICLE 5 PROFITS AND LOSSES; DISTRIBUTIONS .................................................... 10       5.1    Allocation of Profit and Loss ................................................................................. 10       5.2    Distribution of Cash ............................................................................................... 11       5.3    REIT Distribution Requirements ............................................................................ 12      5.4     No Right to Distributions in Kind .......................................................................... 12       5.5    Limitations on Return of Capital Contributions ..................................................... 12       5.6    Distributions Upon Liquidation .............................................................................. 12      5.7     Substantial Economic Effect .................................................................................. 13   ARTICLE 6 RIGHTS, OBLIGATIONS AND        POWERS OF THE GENERAL              PARTNER ............................................................................................................. 13      6.1     Management of the Partnership .............................................................................. 13      6.2     Delegation of Authority .......................................................................................... 15      6.3     Indemnification and Exculpation oflndemnitees...................................................  15      6.4     Liability of the General Partner. ............................................................................. 17      6.5     Reimbursement of General Partner. ....................................................................... 18      6.6     Outside Activities ................................................................................................... 18      6.7     Employment or Retention of Affiliates .................................................................. 18      6.8     General Partner Participation ................................................................................. 19      6.9     Title to Partnership Assets ...................................................................................... 19      6.10    No Duplication of Fees or Expenses ...................................................................... 19   ARTICLE 7 CHANGES IN GENERAL PARTNER ............................................................... 19      7.1     Transfer of the General Partner's Partnership Interest. .......................................... 19      7.2     Admission ofa Substitute or Additional General Partner. ..................................... 20      7.3     Effect of Bankruptcy, Withdrawal, Death or Dissolution of a General                  Partner. ............................................................................................................ 20 

 

     7.4     Removal of a General Partner ................................................................................ 21    ARTICLE 8 RIGHTS AND OBLIGATIONS OF THE LIMITED PARTNERS .................. 22       8. 1    Management of the Partnership .............................................................................. 22       8.2     Power of Attorney .................................................................................................. 22       8.3     Limitation on Liability of Limited Partners ........................................................... 22       8.4     Ownership by Limited Partner of Corporate General Partner or Affiliate ............. 22       8.5     Initial Limited Partner Right of Redemption .......................................................... 22    ARTICLE 9 TRANSFERS OF LIMITED PARTNERSHIP INTERESTS ........................... 23       9. I    Purchase for Investment. .................................................................................... , .. , 23       9 .2    Restrictions on Transfer of Limited Partnership Interests ...................................... 23       9 .3    Admission of Substitute Limited Partner. .............................................................. 24       9.4     Rights of Assignees of Partnership Interests .......................................................... 25       9.5     Effect of Bankruptcy, Death, Incompetence or Termination of a Limited                   Partner ............................................................................................................. 25       9 .6    Joint Ownership of Interests ................................................................................... 26    ARTICLE 10 BOOKS AND RECORDS; ACCOUNTING; TAX MATTERS ...................... 26       I O. 1  Books and Records ................................................................................................. 26       10.2    Custody of Partnership Funds; Bank Accounts ...................................................... 26       10.  3  Fiscal and Taxable Year ......................................................................................... 2 6       10.4    Annual Tax Information and Report ...................................................................... 27       I 0.5   Tax Matters Partner; Tax Elections; Special Basis Adjustments ........................... 27       10.6    Reports to Limited Partners .................................................................................... 27    ARTICLE 11  AMENDMENT OF AGREEMENT ................................................................... 28    ARTICLE 12  GENERAL PROVISIONS .................................................................................. 28       12.1   Notices .................................................................................................................... 28       12.2    Survival of Rights ................................................................................................... 28       12.3   Additional Documents ............................................................................................ 28       12.4    Severability ............................................................................................................. 28       12.5   Entire Agreement.. .................................................................................................. 29       12.6   Pronouns and Plurals .............................................................................................. 29       12.7   Headings ................................................................................................................. 29       12.8   Counterparts ........................................................................................................... 29       12.9   Governing Law ....................................................................................................... 29   EXHIBIT A CONTRIBUTIONS .............................................................................................. A-1                                            II 

 

           AMENDED AND RESTATED LIMITED PARTNERSHIP AGREEMENT                                             OF             STEADFAST SECURE INCOME REIT OPERATING PARTNERSHIP, L.P.          This Amended and Restated Limited Partnership Agreement is entered into this 28th day of  September, 2009, between Steadfast Secure Income REIT, Inc., a Maryland corporation (the "General  Partn~"), and the Initial Limited Partner (defined below). Capitalized terms used herein but not otherwise  defined shall have the meanings given them in Article 1.          WHEREAS, the General Partner and the Initial Limited Partner executed that Limited Partnership  Agreement of Steadfast Secure Income REIT Operating Partnership, L.P. on July 6, 2009 (the "Original  Agreement"); and          WHEREAS,   the General Partner and the Initial Limited Partner desire to amend and restate the  Original Agreement pursuant to the terms set forth herein.          NOW,  THEREFORE,   in consideration of mutual covenants between the parties hereto, and of  other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the  parties hereto agree as follows:                                        AGREEMENT                                         ARTICLE I                                     DEFINED TERMS          The following defined terms used in this Agreement shall have the meanings specified below:          "Act" means the Delaware Revised Uniform Limited Partnership Act, as it may be amended from  time to time.          "Additional Funds" has the meaning set forth in Section 4.3 hereof.          "Administrative Expenses" means (i) all administrative and operating costs and expenses incurred  by the Partnership, (ii) those administrative costs and expenses of the General Partner, including any  salaries or other payments to directors, officers or employees of the General Partner, and any accounting  and legal expenses of the General Partner, which expenses, the Pa1tners have agreed, are expenses of the  Partnership and not the General Partner, and (iii) to the extent not included in clause (ii) above, REIT  Expenses; provided, however, that Administrative Expenses shall not include any administrative costs  and expenses incurred by the General Partner that are attributable to Properties or partnership interests in  a Subsidiary Partnership that are owned by the General Partner directly.         "Advisor" or "Advisors" means the Person or Persons, if any, appointed, employed or contracted  with by the General Partner and responsible for directing or performing the day-to-day business affairs of  the General Partner, including any Person to whom such Advisor subcontracts substantially all of such  functions. 

 

       "Advisory Agreement" means the agreement between the General Partner, the Advisor and the  other parties named therein pursuant to which the Advisor will direct or perform the day-to-day business  affairs of the General Partner.          "Affiliate" means, with respect to any Person, (i) any Person directly or indirectly, owning,  controlling or holding with the power to vote l 0% of more of the outstanding voting securities of such  other Person; (ii) any Person 10% or more of whose outstanding voting securities are directly or indirectly  owned, controlled or held, with the power to vote, by such other Person; (iii) any Person directly or  indirectly controlling, controlled by or under common control with such other Person; (iv) any executive  officer, director, trustee or general partner of such other Person; and (v) any legal entity for which such  Person acts an executive officer, director, trustee or general partner.          "Agreed Value" means the fair market value of a Partner's non-cash Capital Contribution as of  the date of contribution as agreed to by such Partner and the General Partner.          "Agreement" means this Amended and Restated Limited Partnership Agreement, as amended,  modified supplemented or restated from time to time, as the context requires.          "Articles of Incorporation" means the Articles of Incorporation of the General Partner, as  amended or restated from time to time, filed with the Maryland State Department of Assessments and  Taxation.          "Capital Account" has the meaning provided in Section 4.4 hereof.          "Capital Contribution" means the total amount of cash, cash equivalents, and the Agreed Value of  any Property or other asset (other than cash) contributed or agreed to be contributed, as the context  requires, to the Partnership by each Partner pursuant to the terms of this Agreement. Any reference to the  Capital Contribution of a Partner shall include the Capital Contribution made by a predecessor holder of  the Partnership Interest of such Partner.          "Certificate" means any instrument or document that is required under the laws of the State of  Delaware, or any other jurisdiction in which the Partnership conducts business, to be signed and sworn to  by the Partners of the Partnership ( either by themselves or pursuant to the power-of-attorney granted to  the General Partner in Section 8.2 hereof) and filed for recording in the appropriate public offices within  the State of Delaware or such other jurisdiction to perfect or maintain the Partnership as a limited  partnership, to effect the admission, withdrawal, or substitution of any Partner of the Partnership, or to  protect the limited liability of the Limited Partners as limited partners under the laws of the State of  Delaware or such other jurisdiction.          "Code" means the Internal Revenue Code of 1986, as amended, and as hereafter amended from  time to time. Reference to any particular provision of the Code shall mean that provision in the Code at  the date hereof and any successor provision of the Code.          "Commission" means the U.S. Securities and Exchange Commission.          "Director" means a director of the General Partner.          "Event of Bankruptcy" as to any Person means the filing of a petition for relief as to such Person  as debtor or bankrupt under the Bankruptcy Code of 1978, as amended from time to time and any  successor code, law or act, or similar provision of law of any jurisdiction ( except if such petition is  contested by such Person and has been dismissed within 90 days); insolvency or bankruptcy of such                                               2 

 

Person as finally determined by a court proceeding; filing by such Person of a petition or application to  accomplish the same or for the appointment of a receiver or a trustee for such Person or a substantial part  of his assets; commencement of any proceedings relating to such Person as a debtor under any other  reorganization, arrangement, insolvency, adjustment of debt or liquidation law of any jurisdiction,  whether now in existence or hereinafter in effect, either by such Person or by another, provided that if  such proceeding is commenced by another, such Person indicates his approval of such proceeding,  consents thereto or acquiesces therein, or such proceeding is contested by such Person and has not been  finally dismissed within 90 days.          "General Partner" means Steadfast Secure Income REIT, Inc., a Maryland corporation, and any  Person who becomes a substitute or additional General Partner as provided herein, and any of their  successors as General Partner.          "General Partner Loan" has the meaning provided in Section 5.2(c) hereof.          "General Partnership Interest" means a Partnership Interest held by the General Partner that is a  general partnership interest.          "lndemnitee" means (i) any Person made a party to a proceeding by reason of its status as the  General Partner or a director, officer or employee of the General Partner or the Partnership, and (ii) such  other Persons (including Affiliates of the General Partner or the Partnership) as the General Partner may  designate from time to time, in its sole and absolute discretion.          "Independent Directors" means a Director who is not on the date of determination, and within the  last two years from the date of determination has not been, directly or indirectly associated with the  Sponsor of the General Partner or the Advisor by virtue of(i) ownership of an interest in the Sponsor, the  Advisor or any of their Affiliates, other than the General Partner (other than ownership of less than one  percent of any such entity that is a publicly traded company), (ii) employment by the Sponsor, the  Advisor or any of their Affiliates, (iii) service as an officer or director of the Sponsor, the Advisor or any  of their Affiliates, other than as a Director, (iv) perfonnance of services, other than as a Director, for the  General Partner, (v) service as a director or trustee of more than three real estate investment trusts  organized by the Sponsor or advised by the Advisor or (vi) maintenance of a material business or  professional relationship with the Sponsor, the Advisor or any of their Affiliates. A business or  professional relationship is considered "material" if the aggregate gross revenue derived by the Director  from the Sponsor, the Advisor and their Affiliates exceeds five percent of either the Director's annual  gross revenue during either of the last two years or the Director's net worth on a fair market value basis.  An indirect association with the Sponsor or the Advisor shall include circumstances in which a Director's  spouse, parent, child, sibling, mother- or father-in-law, son- or daughter-in-law or brother- or sister-in-law  is or has been associated with the Sponsor, the Advisor, any of their Affiliates or the General Partner.          "Initial Limited Partner" means Steadfast Secure Income Advisor, LLC and any permitted  transferee of its Limited Partnership Interests.          "Joint Venture" means any joint venture or general partnership arrangement in which the  Partnership is a co-venturer or general partner which are established to acquire one or more Real Estate  Assets.          "Limited Partner" means any Person named as a Limited Partner on Exhibit A attached hereto, as  such exhibit may be amended and restated from time to time, and any Person who becomes a Substitute  Limited Partner, in such Person's capacity as a Limited Partner in the Partnership.                                               3 

 

       "Limited Partner Borrower" has the meaning provided in Section 5.2(c) hereof.          "Limited Partnership Interest" means the ownership interest of a Limited Partner in the   Partnership at any particular time, including the right of such Limited Partner to any and all benefits to  which such Limited Partner may be entitled as provided in this Agreement and in the Act, together with  the obligations of such Limited Partner to comply with all the provisions of this Agreement and of the  Act.          "Loss" has the meaning provided in Section 5. l(h) hereof.          "Nonrecourse Liability" shall have the meaning set forth in Regulations Sections l.704-2(b)(3)  and l.752-l(a)(2).          "Offering" means the offer and sale of REIT Shares or other securities of the General Partner (i)  to the public pursuant to a registration statement filed under the Securities Act and declared effective by  the Commission or (ii) in an unregistered private placement pursuant to applicable exemptions from  registration under the Securities Act.          "Partner" means any General Partner or Limited Partner.          "Partner Nonrecourse Debt" shall have the meaning set forth m Regulations Section l.704- 2(b)(4).          "Partner Nonrecourse Debt Minimum Gain" shall have the meaning set forth in Regulations  Section 1. 704-2(i)(2).          "Partner Nonrecourse Deductions" shall have the meaning  set forth m  Regulations  Sections 1. 704-2(i)(l) and 1. 704-2(i)(2).          "Partnership" means Steadfast Secure Income REIT Operating Partnership, L.P., a Delaware  limited partnership.          "Partnership Interest" means an ownership interest in the Partnership held by either a Limited  Partner or the General Partner and includes any and all benefits to which the holder of such a Partnership  Interest may be entitled as provided in this Agreement, together with all obligations of such Person to  comply with the terms and provisions of this Agreement.          "Partnership Loan" has the meaning provided in Section 5.2(c) hereof.          "Partnership Minimum Gain" shall have the meaning set forth in Regulations Sections l .704- 2(b )(2) and 1. 704-2( d).          "Partnership Record Date" means the record date established by the General Partner for the  distribution of cash pursuant to Section 5.2 hereof.          "Percentage Interest" means, as to a Partner holding a category of Partnership Interests, its  interest in such category, determined by dividing the Partner's Capital Account allocable (in the  reasonable determination of the General Partner) to interests in such category by the sum of all Partners'  Capital Accounts allocable (in the reasonable determination of the General Partner) to interests in such  category.                                              4 

 

       "Person" means any individual, partnership, limited liability company, corporation, joint venture,  trust or other entity.          "Profit" has the meaning provided in Section 5. l(h) hereof.          "Property" means any Real Estate Asset or other investment in which the Partnership holds an  ownership interest.          "Real Estate Assets" means unimproved and improved real property, real estate related assets and  any direct or indirect interest therein, including, without limitation, fee or leasehold interests, options,  leases, partnership and joint venture interests, equity and debt securities of entities that own real estate,  first or second mortgages on real property, mezzanine loans secured by junior liens on real property,  preferred equity interests secured by a property owner's interest in real property and other contractual  rights in real estate.          "Regulations" means the Federal income tax regulations promulgated under the Code, as  amended  and as hereafter amended from time to time. Reference to any particular provision of the  Regulations shall mean that provision of the Regulations on the date hereof and any successor provision  of the Regulations.          "REIT" means a real estate investment trust under Sections 856 through 860 of the Code.          "REIT  Expenses" means (i) costs and expenses relating to the formation and continuity of  existence and operation of the General Partner and any Subsidiaries thereof (which Subsidiaries shall, for  purposes hereof, be included within the definition of General Partner), including taxes, fees and  assessments associated therewith, any and all costs, expenses or fees payable to any director, officer, or  employee of the General Partner, (ii) costs and expenses relating to any public offering and registration of  securities and any unregistered private placement of securities by the General Partner and all statements,  reports, fees and expenses incidental thereto, including, without limitation, underwriting discounts and  selling commissions applicable to any such offering of securities, and any costs and expenses associated  with any claims made by any holders of such securities or any underwriters or placement agents thereof,  (iii) costs and expenses associated with any repurchase of any securities by the General Partner, (iv) costs  and  expenses associated with the preparation and filing of any periodic or other reports and  communications by the General Partner under federal, state or local laws or regulations, including filings  with the Commission, (v) costs and expenses associated with compliance by the General Partner with  laws, rules and regulations promulgated by any regulatory body, including the Commission and any  securities exchange, (vi) costs and expenses associated with any 40l(k) plan, incentive plan, bonus plan  or other plan providing for compensation for the employees of the General Partner, (vii) costs and  expenses incurred by the General Partner relating to any issuing or redemption of Partnership Interests,  and (viii) all other operating or administrative costs of the General Partner incurred in the ordinary course  of its business on behalf of or in connection with the Partnership.          "REIT Share" means a share of common stock of the General Partner (or successor entity, as the  case may be).          "Securities Act" means the Securities Act of 1933, as amended, and the rules and regulations  promulgated thereunder.          "Securities and Debt-related Investments" means any investments by the General Partner or the  Partnership in (i) real estate securities such as common stock, preferred stock and options to acquire stock  in REITs and other real estate companies and (ii) debt-related investments such as (a) mortgage,                                               5 

 

mezzanine, bridge and other loans and (b) debt and derivative securities related to real estate assets  including mortgage-backed securities, collateralized debt obligations, debt securities issued by real estate  companies and credit default swaps.          "Service" means the United States Internal Revenue Service.          "Sponsor" means any Person which (i) is directly or indirectly instrumental in organizing, wholly  or in part, the General Partner, (ii) will control, manage or participate in the management of the General  Partner, and any Affiliate of any such Person, (iii) takes the initiative, directly or indirectly, in founding or  organizing the General Partner, either alone or in conjunction with one or more other Persons, (iv)  receives a material participation in the General Partner in connection with the founding or organizing of  the business of the General Partner, in consideration of services or property, or both services and  property, (v) has a substantial number of relationships and contacts with the General Partner, (vi)  possesses significant rights to control Properties, (vii) receives fees for providing services to the General  Partner which are paid on a basis that is not customary in the industry or (viii) provides goods or services  to the General Partner on a basis which was not negotiated at arm's-length with the General Partner.  "Sponsor" does not include any Person whose only relationship with the General Partner is that of an  independent property manager and whose only compensation is as such, or wholly independent third  parties such as attorney, accountants and underwriters whose only compensation is for professional  services.          "Subsidiary" means, with respect to any Person, any corporation or other entity of which a  majority of (i) the voting power of the voting equity securities or (ii) the outstanding equity interests is  owned, directly or indirectly, by such Person.          "Subsidiary Partnership" means any partnership of which the partnership interests therein are  owned by the General Partner or a direct or indirect subsidiary of the General Partner.          "Substitute Limited Pa11ner" means any Person admitted to the Partnership as a Limited Partner  pursuant to Section 9.3 hereof.          "Tax Matters Partner" has the meaning described in Section 623 l(a)(7) of the Code.          "Transfer" has the meaning set forth in Section 9.2(a) hereof.                                         ARTICLE2                    PARTNERSHIP FORMATION AND IDENTIFICATION          2.1   Formation.          The Partnership was formed as a limited partnership pursuant to the Act, and all other pertinent  Jaws of the State of Delaware, for the purposes and upon the terms ru1d conditions set forth in this  Agreement.          2.2   Name, Office and Registered Agent.          The name of the Partnership is Steadfast Secure Income REIT Operating Partnership, L.P. The  specified office and place of business of the Partnership shall be 4343 Von Karman Avenue, Suite 300,  Newport Beach, California 92660. The General Partner may at any time change the location of such  office, provided the General Partner gives notice to the Partners of any such change. The name and  address of the Partnership's registered agent is Corporation Service Company, 2711 Centerville Road,                                               6 

 

 Suite 400, Wilmington, New Castle County, Delaware 19808. The sole duty of the registered agent as   such is to forward to the Partnership any notice that is served on him as registered agent.          2.3    Term and Dissolntion.                 (a) The term of the Partnership shall continue in full force and effect until dissolved  npon the first to occnr of any of the following events:                       (i)    the occurrence of an Event of Bankruptcy as to a General Partner or the  dissolution, death, removal or withdrawal of a General Partner unless the business of the Partnership is  continued pursuant to Section 7.3(b) hereof; provided that if a General Partner is on the date of such  occurrence a partnership, the dissolution of such General Partner as a result of the dissolution, death,  withdrawal, removal or Event of Bankruptcy of a partner in such partnership shall not be an event of  dissolution of the Partnership if the business of such General Partner is continued by the remaining  partner or partners, either alone or with additional partners, and such General Partner and such partners  comply with any other applicable requirements of this Agreement;                       (ii)   the passage of ninety (90) days after the sale or other disposition of all or  substantially all of the assets of the Partnership (provided that if the Partnership receives an installment  obligation as consideration for such sale or other disposition, the Partnership shall continue, unless sooner  dissolved under the provisions of this Agreement, until such time as such note or notes are paid in full); or                       (iii)  the election by the General Partner that the Partnership should be  dissolved.                 (b) Upon dissolution of the Partnership (unless the business of the Partnership is  continued pursuant to Section 7.3(b) hereof), the General Partner (or its trustee, receiver, successor or  legal representative) shall amend or cancel any Certificate(s) and liquidate the Partnership's assets and  apply and distribute the proceeds thereof in accordance with Section 5 .6 hereof. Notwithstanding the  foregoing, the liquidating General Partner may either (i) defer liquidation of, or withhold from  distribution for a reasonable time, any assets of the Partnership (including those necessary to satisfy the  Partnership's debts and obligations), or (ii) distribute the assets to the Partners in kind.          2.4    Filing of Certificate and Perfection of Limited Partnership.          The General Partner shall execute, acknowledge, record and file at the expense of the Partnership,  any and all amendments to the Certificate(s) and all requisite fictitious name statements and notices in  such places and jurisdictions as may be necessary to cause the Partnership to be treated as a limited  partnership under, and otherwise to comply with, the laws of each state or other jurisdiction in which the  Partnership conducts business.                                         ARTICLE3                             BUSINESS OF THE PARTNERSHIP          The purpose and nature of the business to be conducted by the Partnership is (i) to conduct any  business that may be lawfully conducted by a limited partnership organized pursuant to the Act, provided,  however, that such business shall be limited to and conducted in such a manner as to permit the General  Partner at all times to qualify as a REIT, unless the General Partner otherwise ceases to qualify as a REIT,  and in a manner such that unless the General Partners determines otherwise, the General Partner will not  be subject to any taxes under Section 857 or 4981 of the Code, (ii) to enter into any partnership, joint  venture or other similar arrangement to engage in any of the foregoing or the ownership of interests in any                                               7 

 

entity engaged in any of the foregoing and (iii) to do anything necessary or incidental to the foregoing. In  connection with the foregoing, and without limiting the General Partner's right in its sole and absolute  discretion to qualify or cease qualifying as a REIT, the Partners acknowledge that the General Partner  intends to qua! ify as a REIT for federal income tax purposes and that, upon such qualification, the  avoidance of income and excise taxes on the General Partner inures to the benefit of all the Partners and  not solely to the General Partner. Notwithstanding the foregoing, the Limited Partners agree that the  General Partner may terminate its status as a REIT under the Code at any time to the full extent permitted  under the Articles of Incorporation. The General Partner on behalf of the Partnership shall also be  empowered to do any and all acts and things necessary or prudent to ensure that the Partnership will not  be classified as a "publicly traded partnership" that is taxable as a corporation under Section 7704 of the  Code.                                          ARTICLE4                        CAPITAL CONTRIBUTIONS AND       ACCOUNTS          4.1    Capital Contributions.                 (a)   The General Partner has not contributed any capital to the Partnership as of the  date hereof.                 (b)   The  Initial Limited Partner has contributed $1,000 to the capital of the  Partnership as of the date hereof.          4.2    Additional Capital Contributions and Issuances of Additional Partnership Interests.          Except as provided in this Section 4.2 or in Section 4.3, the Partners shall have no right or  obligation to make any additional Capital Contributions or loans to the Partnership. 111e General Partner  may contribute additional capital to the Partnership, from time to time, in the manner contemplated in this  Section 4.2.                (a)    The General Partner is hereby authorized to cause the Partnership to issue  additional Partnership Interests for any Partnership purpose at any time or from time to time, including  but not limited to Partnership Interests issued in connection with acquisitions of properties, to the Partners  (including the General Partner) or to other Persons for such consideration and on such terms and  conditions as shall be established by the General Partner in its sole and absolute discretion, all without the  approval of any Limited Partner. Any additional Partnership Interests issued thereby may be issued in one  or more classes, or one or more series of any of such classes, with such designations, preferences and  relative, participating, optional or other special rights, powers and duties, including rights, powers and  duties senior to Limited Partnership Interests, all as shall be determined by the General Partner in its sole  and absolute discretion and without the approval of any Limited Partner, subject to Delaware law,  including, without limitation, (i) the allocations of items of Partnership income, gain, loss, deduction and  credit to each such class or series of Partnership Interests; (ii) the right of each such class or series of  Partnership Interests to share in Partnership distributions; and (iii) the rights of each such class or series of  Partnership Interests upon dissolution and liquidation of the Partnership. Without limiting the foregoing,  the General Partner is expressly authorized to cause the Partnership to issue Partnership Interests for less  than fair market value, so long as the General Partner concludes in good faith that such issuance is in the  best interests of the General Partner and the Partnership.                (b)    The  General Partner may make  additional Capital Contributions to the  Partnership from time to time, such contributions being credited to its Capital Account in its General  Partnership Interest.                                               8 

 

       4.3    Additional Funding.          If the General Partner determines that it is in the best interests of the Partnership to provide for  additional Partnership funds ("Additional Funds") for any Partnership purpose, the General Partner may  (i) cause the Partnership to obtain such funds from outside borrowings or (ii) elect to have the General  Partner or any of its Affiliates provide such Additional Funds to the Partnership through loans or  otherwise, provided, however, that the Partnership may not borrow money from its Affiliates, unless a  majority of the Directors of the General Partner (including a majority of Independent Directors) not  otherwise interested in such transaction approve the transaction as being fair, competitive, and  commercially reasonable and no less favorable to the Partnership than loans between unaffiliated parties  under the same circumstances.          4.4    Capital Accounts.          A separate capital account (a "Capital Account") shall be established and maintained for each  Partner in accordance with Regulations Section 1.704-l(b)(2)(iv). If(i) a new or existing Partner acquires  an additional Partnership Interest in exchange for more than a de minimis Capital Contribution, (ii) the  Partnership distributes to a Partner more than a de minimis amount of Partnership property or money as  consideration for a Partnership Interest, or (iii) the Partnership is liquidated within the meaning of  Regulation Section 1.704-1 (h )(2)(ii)(g), the General Partner shall revalue the Property of the Partnership  to its fair market value (as determined by the General Partner, in its sole and absolute discretion, and  taking into account Section 7701(g) of the Code) in accordance with Regulations Section 1.704- 1(b  )(2)(iv)(f). When the Partnership's property is revalued by the General Partner, the Capital Accounts  of the Partners shall be adjusted in accordance with Regulations Sections 1.704-l(b)(2)(iv)(f) and (g),  which generally require such Capital Accounts to be adjusted to reflect the manner in which the  unrealized gain or Joss inherent in such Property (that has not been reflected in the Capital Accounts  previously) would be allocated among the Partners pursuant to Section 5.1 if there were a taxable  disposition of such property for its fair market value (as determined by the General Partner, in its sole and  absolute discretion, and taking into account Section 7701 (g) of the Code) on the date of the revaluation.          4.5   No Interest on Contributions.          No Partner shall be entitled to interest on its Capital Contribution.          4.6   Return of Capital Contributions.          No Partner shall be entitled to withdraw any part of its Capital Contribution or its Capital  Account or to receive any distribution from the Partnership, except as specifically provided in this  Agreement. Except as otherwise provided herein, there shall be no obligation to return to any Partner or  withdrawn Partner any part of such Partner's Capital Contribution for so Jong as the Partnership continues  in existence.          4.7   No Third Party Beneficiary.          No creditor or other third party having dealings witl1 the Partnership shall have the right to  enforce the right or obligation of any Partner to make Capital Contributions or loans or to pursue any  other right or remedy hereunder or at Jaw or in equity, it being understood and agreed that the provisions  of this Agreement shall be solely for the benefit of, and may be enforced solely by, the parties hereto and  their respective successors and assigns. None of the rights or obligations of the Partners herein set forth to  make Capital Contributions or loans to the Partnership shall be deemed an asset of the Partnership for any  purpose by any creditor or other third party, nor may such rights or obligations be sold, transferred or                                               9 

 

assigned by the Partnership or pledged or encumbered by the Partnership to secure any debt or other  obligation of the Partnership or of any of the Partners. In addition, it is the intent of the parties hereto that  no distribution to any Limited Partner shall be deemed a return of money or other property in violation of  the Act. However, if any court of competent jurisdiction holds that, notwithstanding the provisions of this  Agreement, any Limited Partner is obligated to return such money or property, such obligation shall be  the obligation of such Limited Partner and not of the General Partner. Without limiting the generality of  the foregoing, a deficit Capital Account of a Partner shall not be deemed to be a liability of such Partner  nor an asset or property of the Partnership.                                          ARTICLES                          PROFITS AND LOSSES; DISTRIBUTIONS          5.1    Allocation of Profit and Loss.                 (a)   Profit. After giving effect to the special allocations in Sections 5.l(c), 5.l(d),  5.l(e), and 5.l(f), Profit of the Partnership for each fiscal year or other applicable period of the  Partnership shall be allocated to the Partners in the following order and priority:                        (i)    Profit shall be allocated to the General Partner until the cumulative Profit  allocated to the General Partner pursuant to this Section 5.l(a)(i) equals the cumulative Loss allocated to  the General Partner pursuant to Section 5.l(b)(ii).                       (ii)   Profit shall be allocated to the Partners in accordance with their  Percentage Interests.                (b)    Loss.  After giving effect to the special allocations in Sections 5.l(c), 5.l(d),  5.1( e), and 5. I (f), Loss of the Partnership for each fiscal year or other applicable period of the Partnership  shall be allocated to the Partners in the following order and priority:                       (i)    Loss shall be allocated to the Partners in accordance with their  Percentage Interests, provided that Loss shall not be allocated to a Partner pursuant to this Section  5.l(b)(i) to the extent that such allocation would cause or increase a deficit in such Partner's Capital  Account at the end of any fiscal year (after reduction to reflect the items described in Regulations  Section 1.704-l(b)(2)(ii)(d)(4), (5) and (6)) to exceed the sum of such Partner's shares of Partnership  Minimum  Gain and  Partner Nonrecourse Debt Minimum Gain, as determined in accordance with  Regulations Sections I. 704-2(g)(I) and 1.704-2(i)(5).                        (ii)  Loss shall be allocated to the General Partner.                ( c)   Minimum  Gain Charge back. In the event there is a net decrease in Partnership  Minimum Gain during any fiscal year, the "minimum gain chargeback" described in Regulations Section  I. 704-2(!) and Regulations Section I. 704-2(g) shall apply. In the event there is a net decrease in Partner  Nonrecourse Debt Minimum  Gain during any fiscal year, the "partner minimum gain chargeback"  described in Regulations Section I. 704-2(i)( 4) shall apply.                (d)    Qualified Income Offset. This Section 5.l(d) incorporates the "qualified income  offset" set forth in Regulations Section l.704-l(b)(2)(ii)(d) as if those provisions were fully set forth in  this Section 5.l(d).                                              10 

 

              (e)   Nonrecourse Deductions. Nonrecourse Deductions for any fiscal year shall be   allocated to Partners pro rata in proportion to their Percentage Interests.                 (f)   Partner Nonrecourse Deductions. The Partner Nonrecourse Deductions of the  Partnership (as determined under Regulations Section l.704-2(i)(2)) shall be allocated each year to the  Partner that bears the economic risk of loss (within the meaning of Regulations Section 1.752-2) with  respect to the Partner Nonrecourse Debt to which such Partner Nonrecourse Deductions are attributable.                 (g)   Allocations Between Transferor and Transferee. If a Partner transfers any part  or all of its Partnership Interest, the distributive shares of the various items of Profit and Loss allocable  among the Partners during such fiscal year of the Partnership shall be allocated between the transferor and  the transferee Partner either (i) as if the Partnership's fiscal year had ended on the date of the transfer, or  (ii) based on the number of days of such fiscal year that each was a Partner without regard to the results of  Partnership activities in the respective portions of such fiscal year in which the transferor and the  transferee were Partners. The General Partner, in its sole and absolute discretion, shall determine which  method shall be used to allocate the distributive shares of the various items of Profit and Loss between the  transferor and the transferee Partner.                 (h)   Definition of Profit and Loss. "Profit" and "Loss" and any items of income,  gain, expense, or loss referred to in this Agreement shall be determined in accordance with federal income  tax accounting principles, as modified by Regulations Section l.704-l(b)(2)(iv), except that Profit and  Loss shall not include items of income, gain and expense that are specially allocated pursuant to Sections  5. l(c), 5. l(d), 5.l(e) or 5.l(f). All allocations of Profit and Loss (and all items contained therein) for  federal income tax purposes shall be identical to all allocations of such items set forth in this Section 5.1,  except as otherwise required by Section 704(c) of the Code and Regulations Section l.704-l(b)(4). The  General Partner shall have the authority to elect the method to be used by the Partnership for allocating  items of income, gain, and expense as required by Section 704(c) of the Code including a method that  may result in a Partner receiving a disproportionately larger share of the Partnership tax depreciation  deductions, and such election shall be binding on all Partners.          5.2   Distribution of Cash.                (a)    The Partnership shall distribute cash on a quarterly (or, at the election of the  General Partner, more frequent) basis, in an amount determined by the General Partner in its sole and  absolute discretion, to the Partners who are Partners on the Partnership Record Date with respect to such  quarter ( or other distribution period).                (b)    Subject to the provisions of Section 5.2(c), 5.2(d), 5.3, 5.5, 5.6 and 8.5 of this  Agreement, distributions shall be made to the Partners in accordance with their respective Percentage  Interests on the Pminership Record Date.                (c)    Notwithstanding any other provision of this Agreement, the General Partner is  authorized to take any action that it determines to be necessary or appropriate to cause the Partnership to  comply with any withholding requirements established under the Code or any other federal, state or local  law including, without limitation, pursuant to Sections 1441, 1442, 1445 and 1446 of the Code. To the  extent that the Partnership is required to withhold and pay over to any taxing authority any amount  resulting from the allocation or distribution of income to any Partner or assignee (including by reason of  Section 1446 of the Code), either (i) if the actual amount to be distributed to the Partner equals or exceeds  the amount required to be withheld by the Partnership, the mnount withheld shall be treated as a  distribution of cash in the amount of such withholding to such Partner, or (ii) if the actual amount to be  distributed to the Partner is less than the amount required to be withheld by the Partnership, the actual                                              11 

 

amount to be distributed shall be treated as a distribution of cash in the amount of such withholding and  the additional amount required to be withheld shall be treated as a loan ( a "Partnership Loan") from the  Partnership to the Partner on the day the Partnership pays over such amount to a taxing authority. A  Partnership Loan shall be repaid through withholding by the Partnership with respect to subsequent  distributions to the applicable Partner or assignee or upon demand upon the applicable Partner or  assignee. In the event tl1at a Limited Partner (a "Limited Partner Borrower") fails to pay any amount owed  to the Partnership with respect to the Partnership Loan within fifteen (15) days after demand for payment  thereof is made by the Partnership on the Limited Partner, the General Partner, in its sole and absolute  discretion, may elect to make the payment to the Partnership on behalf of such Limited Partner Borrower.  In such event, on the date of payment, the General Partner shall be deemed to have extended a loan (a  "General Partner Loan") to the Limited Partner Borrower in the amount of the payment made by the  General Partner and shall succeed to all rights and remedies of the Partnership against the Limited Partner  Borrower as to that amount. Without limitation, the General Partner shall have the right to receive any  distributions that otherwise would be made by the Partnership to the Limited Partner Borrower until such  time as the General Partner Loan has been paid in full, and any such distributions so received by the  General Partner shall be treated as having been received by the Limited Partner Borrower and  immediately paid to the General Partner. Any amounts treated as a Partnership Loan or a General Partner  Loan pursuant to this Section 5.2(c) shall bear interest at the lesser of (i) the base rate on corporate loans  at large United States money center commercial banks, as published from time to time in The Wall Street  Journal, or (ii) the maximum lawful rate of interest on such obligation, such interest to accrue from the  date the Partnership or the General Partner, as applicable, is deemed to extend the loan until such loan is  repaid in fu II.                 ( d)  The General Partner is authorized to cause the Partnership to make distributions  to the General Partner from time to time to fund redemptions of REIT Shares.          5.3   REIT Distribution Requirements.          The General Partner shall use its commercially reasonable efforts to cause the Partnership to  distribute amounts sufficient to enable the General Partner to make stockholder distributions that will  allow the General Partner to (i) meet its distribution requirement for qualification as a REIT as set forth in  Section 857 of the Code and (ii) avoid any federal income or excise tax liability imposed by the Code.          5.4   No Right to Distributions in Kind.          No Partner shall be entitled to demand Property other than cash m connection with any  distributions by the Partnership.          5.5   Limitations on Return of Capital Contributions.          Notwithstanding any of the provisions of this Article 5, no Partner shall have the right to receive,  and the General Partner shall not have the right to make, a distribution that includes a return of all or part  of a Partner's Capital Contributions, unless after giving effect to the return of a Capital Contribution, the  sum of all Partnership liabilities, other than the liabilities to a Partner for the return of his Capital  Contribution, does not exceed the fair market value of the Partnership's assets.          5.6   Distributions Upon Liquidation.          Upon liquidation of the Partnership, after payment of, or adequate provision for, debts and  obligations of the Partnership, including any Partner loans, any remaining assets of the Partnership shall  be distributed to all Partners in accordance with their Capital Accounts. To the extent deemed advisable                                             12 

 

by the General Partner, appropriate arrangements (including the use of a liquidating trust) may be made to  assure that adequate funds are available to pay any contingent debts or obligations.          5. 7   Substautial Economic Effect.          It is the intent of the Partners that the allocations of Profit and Loss under this Agreement have  substantial economic effect ( or be consistent with the Partners' interests in the Partnership in the case of  the allocation of losses attributable to nonrecourse debt) within the meaning of Section 704(b) of the Code  as interpreted by the Regulations promulgated pursuant thereto. Article 5 and other relevant provisions of  this Agreement shall be interpreted in a manner consistent witb such intent.                                          ARTICLE6                               RIGHTS, OBLIGATIONS AND                           POWERS OF THE GENERAL PARTNER          6.1   Management of the Partnership.                (a)    Except as otherwise expressly provided in this Agreement, the General Partner  shall have full, complete and exclusive discretion to manage and control the business of the Partnership  for the purposes herein stated, and shall make all decisions affecting the business and assets of the  Partnership. Subject to the restrictions specifically contained in this Agreement, the powers of the  General Partner shall include, without limitation, the authority to take the following actions on behalf of  the Partnership:                       (i)    to acquire, purchase, own, operate, lease and dispose of any Real Estate  Asset or Securities and Debt-related Investment that the General Partner determines are necessary or  appropriate or in the best interests of the business of the Partnership;                       (ii)   to construct buildings and make other improvements on the Properties;                       (iii)  to authorize, issue, sell, redeem or otherwise purchase any Partnership  Interests or any securities (including secured and unsecured debt obligations of the Partnership, debt  obligations of the Partnership convertible into any class or series of Partnership Interests, or options,  rights, warrants or appreciation rights relating to any Partnership Interests) of the Partnership;                       (iv)   to borrow or lend money for the Partnership, issue or receive evidences  of indebtedness in connection therewith, refinance, increase the amount of, modify, amend or change the  terms of, or extend the time for tbe payment of, any such indebtedness, and secure such indebtedness by  mortgage, deed of trust, pledge or other lien on tbe Partnership's assets;                       ( v)   to pay, either directly or by reimbursement, for all operating costs and  general administrative expenses of the Partnership to third parties or to the General Partner or its  Affiliates as set forth in this Agreement;                       (vi)   to guarantee or become a co-maker of indebtedness of the General  Partner or any Subsidiary thereof, refinance, increase the amount of, modify, amend or change the tenns  of, or extend the time for the payment of, any such guarantee or indebtedness, and secure such guarantee  or indebtedness by mortgage, deed of trust, pledge or other lien on the Partnership's assets;                       (vii)  to use assets of the Partnership (including, without limitation, cash on  hand) for any purpose consistent with this Agreement, including, without limitation, payment, either                                             13 

 

directly or by reimbursement, of all operating costs and general administrative expenses of the General  Partner, the Partnership or any Subsidiary of either, to third parties or to the General Partner as set forth in  this Agreement;                       (viii) to lease all or any portion of any of the Partnership's assets, whether or  not the terms of such leases extend beyond the tennination date of the Partnership and whether or not any  portion of the Partnership's assets so leased are to be occupied by the lessee, or, in turn, subleased in  whole or in part to others, for such consideration and on such terms as the General Partner may  detennine;                       (ix)   to prosecute, defend, arbitrate, or compromise any and all claims or  liabilities in favor of or against the Partnership, on such tenns and in such manner as the General Partner  may  reasonably determine, and similarly to prosecute, settle or defend litigation with respect to the  Partners, the Partnership, or the Partnership's assets;                       (x)    to file applications, communicate, and otherwise deal with any and all  governmental agencies having jurisdiction over, or in any way affecting, the Partnership's assets or any  other aspect of the Partnership business;                       (xi)   to make or revoke any election pcnnitted or required of the Partnership  by any taxing authority;                       (xii)  to maintain such insurance coverage for public liability, fire and casualty,  and any and all other insurance for the protection of the Partnership, for the conservation of Partnership  assets, or for any other purpose convenient or beneficial to the Partnership, in such amounts and such  types, as it shall determine from time to time;                       (xiii) to determine whether or not to apply any insurance proceeds for any  Property to the restoration of such Property or to distribute the same;                       (xiv)  to establish one or more divisions of the Partnership, to hire and dismiss  employees of the Partnership or any division of the Partnership, and to retain legal counsel, accountants,  consultants, real estate brokers, and such other persons, as the General Partner may deem necessary or  appropriate in connection with the Partnership business and to pay therefor such remuneration as the  General Partner may deem reasonable and proper;                       (xv)   to retain other services of any kind or nature in connection with the  Partnership business, and to pay therefor such remuneration as the General Partner may deem reasonable  and proper;                       (xvi)  to negotiate and conclude agreements on behalf of the Partnership with  respect to any of the rights, powers and authority conferred upon the General Partner;                       (xvii) to maintain accurate accounting records and to file promptly all federal,  state and local income tax returns on behalf of the Partnership;                       (xviii) to distribute Partnership cash or other Partnership assets in accordance  with this Agreement;                                              14 

 

                    (xix)  to form or acquire an interest in, and contribute Property to, any further  limited or general partnerships, joint ventures or other relationships that it deems desirable (including,  without limitation, the acquisition of interests in, and the contributions of Property to, its Subsidiaries and  any other Person in which it has an equity interest from time to time);                       (xx)   to  establish Partnership reserves for working capital, capital  expenditures, contingent liabilities, or any other valid Partnership purpose;                       (xxi)  to merge, consolidate or combine the Partnership with or into another  Person;                       (xxii) to do any and all acts and things necessary or prudent to ensure that the  Partnership will not be classified as a "publicly traded partnership" that is taxable as a corporation under  Section 7704 of the Code; and                       (xxiii) to take such other action, execute, acknowledge, swear to or deliver such  other documents and instruments, and perform any and all other acts that the General Partner deems  necessary or appropriate for the formation, continuation and conduct of the business and affairs of the  Partnership (including, without limitation, all actions consistent with allowing the General Partner at all  times to qualify as a REIT unless the General Partner voluntarily terminates its REIT status) and to  possess and enjoy all of the rights and powers of a general partner as provided by the Act.                (b)    Except as otherwise provided herein, to the extent the duties of the General  Partner require expenditures of funds to be paid to third parties, the General Partner shall not have any  obligations hereunder except to 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.          6.2   Delegation of Authority.          The General Partner may delegate any or all of its powers, rights and obligations hereunder, and  may appoint, employ, contract or otherwise deal with any Person for the transaction of the business of the  Partnership, which Person may, under supervision of the General Partner, perform any acts or services for  the Partnership as the General Partner may approve.          6.3   Indemnification and Exculpation of lndemnitees.                (a)    The Partnership shall indemnify an Indemnitee from and against any and all  losses, claims, damages, liabilities, joint or several, expenses (including reasonable legal fees and  expenses), judgments, fines, settlements, and other amounts arising from any and all claims, demands,  actions, suits or proceedings, civil, criminal, administrative or investigative, that relate to the operations  of the Partnership as set forth in this Agreement in which any Jndemnitee may be involved, or is  threatened to be involved, as a party or otherwise, unless 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 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. Any  indemnification pursuant to this Section 6J shall be made only out of the assets of the Partnership.                                              15 

 

              (b)   The Partnership shall reimburse an Indemnitee for reasonable expenses incurred  by an Indemnitee who is a party to a proceeding 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 6.3 has been met, and (ii) a written undertaking by or on behalf of the Indemnitee to repay the  amount ifit shall ultimately be detennined that the standard of conduct has not been met.                 (c)   The indemnification provided by this Section 6.3 shall be in addition to any other  rights to which an lndemnitee 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.                ( d)   The  Partnership may purchase and maintain insurance, on behalf of the  Indemnitees and such other Persons as the General Partner shall determine, against any liability that may  he asserted against or expenses that may he 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 6.3, 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 this  Section 6.3; and actions taken or omitted by the Indemnitee with respect to an employee benefit plan in  the performance of its duties for a purpose reasonably believed by it to be in the interest of the  participants and beneficiaries of the plan shall be deemed to be for a purpose which is not opposed to the  best interests of the Partnership.                (f)    In no event may an Indemnitee subject 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 6.3 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 6.3 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.                (i)    Notwithstanding the foregoing, the Partnership may not indemnify or hold  harmless an Indemnitee for any liability or loss unless all of the following conditions are met: (i) the  Indemnitee has determined, in good faith, that the course of conduct that caused the loss or liability was in  the best interests of the Partnership; (ii) the Indemnitee was acting on behalf of or performing services for  the Partnership; (iii) the liability or loss was not the result of (A) negligence or misconduct, in the case  that the lndemnitee is a director of the General Partner ( other than an Independent Director), the Advisor  or an Affiliate of the Advisor or (B) gross negligence or willful misconduct, in the case that the  Indemnitee is an Independent Director; and (iv) the indemnification or agreement to hold harmless is  recoverable only out of net assets of the Partnership. In addition, the Partnership shall not provide  indemnification for any loss, liability or expense arising from or out of an alleged violation of federal or  state securities laws by such party unless one or more of the following conditions are met: (i) there has  been a successful adjudication on the merits of each count involving alleged material securities law                                              i6 

 

violations as to the Indemnitee; (ii) such claims have been dismissed with prejudice on the merits by a   court of competent jurisdiction as to the lndemnitee; or (iii) a court of competent jurisdiction approves a  settlement of the claims against the Indemnitee and finds that indemnification of the settlement and the  related costs should be made, and the court considering the request for indemnification has been advised  of the position of the Commission and of the published position of any state securities regulatory  authority in which Securities were offered or sold as to indemnification for violations of securities laws.          6.4    Liability of the General Partner.                 (a)   Notwithstanding anything to the contrary set forth in this Agreement, the General  Partner shall not be liable for monetary damages to the Partnership or any Partners for losses sustained or  liabilities incurred as a result of errors in judgment or of any act or omission if the General Partner acted  in good faith. The General Partner shall not be in breach of any duty that the General Partner may owe to  the Limited Partners or the Partnership or any other Persons under this Agreement or of any duty stated or  implied by law or equity provided the General Partner, acting in good faith, abides by the terms of this  Agreement.                 (b)   The Limited Partners expressly acknowledge that the General Partner is acting on  behalf of the Partnership, itself and its stockholders collectively, that the General Partner is under no  obligation to consider the separate interests of the Limited Partners (including, without limitation, the tax  consequences to Limited Partners or the tax consequences of some, but not all, of the Limited Partners) in  deciding whether to cause the Partnership to take ( or decline to take) any actions. In the event of a conflict  between the interests of its stockholders on one hand and the Limited Partners on the other, the General  Partner shall endeavor in good faith to resolve the conflict in a manner not adverse to either its  stockholders or the Limited Partners; provided, however, that for so long as the General Partner directly  owns a controlling interest in the Partnership, any such conflict that the General Partner, in its sole and  absolute discretion, determines cannot be resolved in a manner not adverse to either its stockholders or  the Limited Partner shall be resolved in favor of the stockholders. The General Partner shall not be liable  for monetary damages for losses sustained, liabilities incurred, or benefits not derived by Limited Partners  in connection with such decisions, provided that the General Partner has acted in good faith.                (c)    Subject to its obligations and duties as General Partner set forth in Section 6.1  hereof, the General Partner may exercise any of the powers granted to it under this Agreement and  perform any of the duties imposed upon it hereunder either directly or by or through its agents. The  General Partner shall not be responsible for any misconduct or negligence on the part of any such agent  appointed by it in good faith.                (d)    Notwithstanding any other provisions of this Agreement or the Act, any action of  the General Partner on behalf of the Partnership or any decision of the General Partner to refrain from  acting on behalf of the Partnership, undertaken in the good faith belief that such action or omission is  necessary or advisable in order (i) to protect the ability of the General Partner to continue to qualify as a  REIT or (ii) to prevent the General Partner from incurring any taxes under Section 857, Section 4981, or  any other provision of the Code, is expressly authorized under this Agreement and is deemed approved by  all of the Limited Partners.                (e)    Any amendment, modification or repeal of this Section 6.4 or any prov1s10n  hereof shall be prospective only and shall not in any way affect the limitations on the General Partner's  liability to the Partnership and the Limited Partners under this Section 6.4 as in effect immediately prior  to such amendment, modification or repeal with respect to matters occurring, in whole or in part, prior to  such amendment, modification or repeal, regardless of when claims relating to such matters may arise or  be asserted.                                              17 

 

       6.5    Reim bursemeut of General Partner.                 (a)   Except as provided in this Section 6.5 and elsewhere in this Agreement  ( including the provisions of Articles 5 and 6 regarding distributions, payments, and allocations to which it  may  be entitled), the General Partner shall not be compensated for its services as general partner of the  Partnership.                 (b)   The General Partner shall be reimbursed on a monthly basis, or such other basis  as the General Partner may determine in its sole and absolute discretion, for all Administrative Expenses  incurred by the General Partner. Reimbursement of Administrative Expenses shall be treated as an  expense of the Partnership and not as allocations of Partnership income or gain.          6.6    Outside Activities.          Subject to Section 6.8 hereof, the Articles of Incorporation and any agreements entered into by  the General Partner or its Affiliates with the Partnership or a Subsidiary, any officer, director, employee,  agent, trustee, Affiliate or stockholder of the General Partner, the General 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 substantially similar or identical to those of the  Partnership. Neither the Partnership nor any of the Limited Partners shall have any rights by virtue of this  Agreement in any such business ventures, interests or activities. None of the Limited Partners nor any  other Person shall have any rights by virtue of this Agreement or the partnership relationship established  hereby in any such business ventures, interests or activities, and the General Partner shall have no  obligation pursuant to this Agreement to offer any interest in any such business ventures, interests and  activities to the Partnership or any Limited Partner, even if such opportunity is of a character which, if  presented to the Partnership or any Limited Partner, could be taken by such Person.          6. 7  Employment or Retention of Affiliates.                (a)    Any  Affiliate of the General Partner may be employed or retained by the  Partnership and may otherwise deal with the Partnership (whether as a buyer, lessor, lessee, manager,  furnisher of goods or services, broker, agent, lender or otherwise) and may receive from the Partnership  any compensation, price, or other payment therefor which the General Partner determines to be fair and  reasonable.                (b)    The Partnership may lend or contribute to its Subsidiaries or other Persons in  which it has an equity investment, and such Persons may borrow funds from the Partnership, on terms and  conditions established in the sole and absolute discretion of the General Partner. The foregoing authority  shall not create any right or benefit in favor of any Subsidiary or any other Person.                (c)    The Partnership may transfer assets to joint ventures, other partnerships,  corporations or other business entities in which it is or thereby becomes a participant upon such tenns and  subject to such conditions as the General Partner deems are consistent with this Agreement, applicable  law and the REIT status of the General Partner.                (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, in the General Partner's sole  discretion, on terms that are fair and reasonable to the Partnership.                                              18 

 

       6.8    General Partner Participation.          The General Partner agrees that all business activities of the General Partner, including activities   pertaining to the acquisition, development or ownership of any Real Estate Asset shall be conducted  through the Partnership, a Subsidiary, a Subsidiary Partnership or a taxable REIT subsidiary (within the  meaning of Section 856(1) of the Code); provided, however, that the General Partner is allowed to hold  cash and liquid investments to fund its expenses, including redemptions of REIT Shares.          6.9    Title to Partnership Assets.          Title to Partnership assets, whether real, personal or mixed and whether tangible or intangible,  shall be deemed to be owned by the Partnership as an entity, and no Partner, individually or collectively,  shall have any ownership interest in such Partnership assets or any portion thereof. Title to any or all of  the Partnership assets may be held in the name of the Partnership, the General Partner or one or more  nominees, as the General Partner may determine, including Affiliates of the General Partner. The General  Partner hereby declares and warrants that any Partnership assets for which legal title is held in the name  of the General Partner or any nominee or Affiliate of the General Partner shall be held by the General  Partner for the use and benefit of the Partnership in accordance with the provisions of this Agreement;  provided, however, that the General Partner shall use its reasonable best efforts to cause beneficial and  record title to such assets to be vested in the Partnership as soon as reasonably practicable. All Partnership  assets shall be recorded as the Property of the Partnership in its books and records, irrespective of the  name in which legal title to such Partnership assets is held.          6.10   No Duplication of Fees or Expenses.          The Partnership may not incur or be responsible for any fee or expense (in connection with an  Offering or otherwise) that would be duplicative of fees and expenses paid by the General Partner.                                          ARTICLE7                             CHANGES IN GENERAL PARTNER          7.1    Transfer of the General Partner's Partnership Interest.                 (a)   111e General Partner shall not transfer all or any portion of its General  Partnership Interest or withdraw as General Partner except as provided in, or in connection with a  transaction contemplated by, Section 7.1 ( c ).                 (b)   Except as otherwise provided in Section 6.4(b) or Section 7.l(c) hereof, the  General Partner shall not engage in any merger, consolidation or other combination with or into another  Person or the sale of all or substantially all of its assets ( other than in connection with a change in the  General Partner's state of incorporation or organizational form), in each case which results in a change of  control of the General Partner, unless the consent of Limited Partners holding more than 50% of the  Percentage Interests of the Limited Partners is obtained.                (c)    Notwithstanding Section 7.l(a)or(b),                       (i)    a General Partner may transfer all or any portion of its General  Partnership Interest to (A) a wholly-owned Subsidiary of such General Partner or (B) the owner of all of  the ownership interests of such General Partner, and following a transfer of all of its General Partnership  Interest, may withdraw as General Partner; and                                              19 

 

                    (ii)   the General Partner may engage in a transaction not required by law or   by the rules of any national securities exchange on which the REIT Shares are listed to be submitted to  the vote of the holders of the REIT Shares.          7.2    Admission of a Substitute or Additional General Partner.          A Person shall be admitted as a substitute or additional General Partner of the Partnership only if  the following terms and conditions are satisfied:                 (a)   the Person to be admitted as a substitute or additional General Partner shall have  accepted and agreed to be bound by all the terms and provisions of this Agreement by executing a  counterpart thereof and such other documents or instruments as may be required or appropriate in order to  effect the admission of such Person as a General Partner, and a certificate evidencing the admission of  such Person as a General Partner shall have been filed for recordation and all other actions required by  Section 2.4 hereof in connection with such admission shall have been performed;                 (b)   if the Person to be admitted as a substitute or additional General Partner is a  corporation, a limited liability company or a partnership it shall have provided the Partnership with  evidence satisfactory to counsel for the Partnership of such Person's authority to become a General  Partner and to be bound by the tenns and provisions of this Agreement; and                 (c)   counsel for the Partnership shall have rendered an opinion (relying on such  opinions from other counsel as may be necessary) that (x) the admission of the Person to be admitted as a  substitute or additional General Partner is in conformity with the Act and (y) none of the actions taken in  connection with the admission of such Person as a substitute or additional General Partner will cause  (i) the Partnership to be classified other than as a partnership for federal tax purposes, or (ii) the loss of  any Limited Partner's limited liability.          7.3    Effect of Bankruptcy, Withdrawal, Death or Dissolution of a General Partner.                (a)    Upon the occurrence ofan Event of Bankruptcy as to a General Partner (and its  removal pursuant to Section 7.4(a) hereof) or the death, withdrawal, removal or dissolution of a General  Partner (except that, if a General Partner is on the date of such occurrence a partnership, the withdrawal,  death, dissolution, Event of Bankruptcy as to, or removal of a partner in, such partnership shall be deemed  not to be a dissolution of such General Partner if the business of such General Partner is continued by the  remaining partner or partners), the Partnership shall be dissolved and terminated unless the Partnership is  continued pursuant to Section 7.J(b) hereof. The merger of the General Partner with or into any entity that  is admitted as a substitute or successor General Partner pursuant to Section 7.2 hereof shall not be deemed  to be the withdrawal, dissolution or removal of the General Partner.                (b)    Following the occurrence of an Event of Bankruptcy as to a General Partner (and  its removal pursuant to Section 7.4(a) hereof) or the death, withdrawal, removal or dissolution of a  General Partner (except that, if a General Partner is, on the date of such occurrence, a partnership, the  withdrawal of, death, dissolution, Event of Bankruptcy as to, or removal of a partner in, such partnership  shall be deemed not to be a dissolution of such General Partner if the business of such General Partner is  continued by the remaining partner or partners), the Limited Pa1tners, within ninety (90) days after such  occurrence, may elect to continue the business of the Partnership by selecting, subject to Section 7.2  hereof and any other provisions of this Agreement, a substitute General Partner by consent of a majority  in interest of the Limited Partners. If the Limited Partners elect to continue the business of the Partnership  and admit a substitute General Partner, the relationship with the Partners and of any Person who has  acquired an interest of a Partner in the Partnership shall be governed by this Agreement.                                             20 

 

       7.4          Removal of a General Partner.                 (a)   Upon  the occurrence of an Event of Bankruptcy as to, or the dissolution of, a  General Partner, such General Partner shall be deemed to be removed automatically; provided, however,  that if a General Partner is on the date of such occurrence a partnership, the withdrawal, death or  dissolution of, Event of Bankruptcy as to, or removal of, a partner in, such partnership shall be deemed  not to be a dissolution of the General Partner if the business of such General Partner is continued by the  remaining partner or partners. The Limited Partners may not remove the General Partner, with or without  cause.                 (b)   If a General Partner has been removed pursuant to this Section 7.4 and the  Partnership is continued pursuant to Section 7.3 hereof, such General Partner shall promptly transfer and  assign its General Partnership Interest in the Partnership to the substitute General Partner approved by a  majority in interest of the Limited Partners in accordance with Section 7.3(b) hereof and otherwise be  admitted to the Partnership in accordance with Section 7.2 hereof. At the time of assignment, the removed  General Partner shall be entitled to receive from the substitute General Partner the fair market value of the  General Partnership Interest of such removed General Partner as reduced by any damages caused to the  Partnership by such General Partner. Such fair market value shall be determined by an appraiser mutually  agreed upon by the General Partner and a majority in interest of the Limited Partners within ten (IO) days  following the removal of the General Partner. In the event that the parties are unable to agree upon an  appraiser, the removed General Partner and a majority in interest of the Limited Partners each shall select  an appraiser. Each such appraiser shall complete an appraisal of the fair market value of the removed  General Partner's General Partnership Interest within thirty (30) days of the General Partner's removal,  and the fair market value of the removed General Partner's General Partnership Interest shall be the  average of the two appraisals; provided, however, that if the higher appraisal exceeds the lower appraisal  by more than 20% of the amount of the lower appraisal, the two appraisers, no later than forty ( 40) days  after the removal of the General Partner, shall select a third appraiser who shall complete an appraisal of  the fair market value of the removed General Partner's General Partnership Interest no later than sixty  (60) days after the removal of the General Partner. In such case, the fair market value of the removed  General Partner's General Partnership Interest shall be the average of the two appraisals closest in value.                 (c)   The General Partnership Interest of a removed General Partner, during the time  after default until transfer under Section 7.4(b), shall be converted to that of a special Limited Partner;  provided, however, such removed General Partner shall not have any rights to participate in the  management  and affairs of the Partnership, and shall not be entitled to any portion of the income,  expense, profit, gain or loss allocations or cash distributions allocable or payable, as the case may be, to  the Limited Partners. Instead, such removed General Partner shall receive and be entitled only to retain  distributions or allocations of such items that it would have been entitled to receive in its capacity as  General Partner, until the transfer is effective pursuant to Section 7.4(b).                 (d)   All Partners shall have given and hereby do give such consents, shall take such  actions and shall execute such documents as shall be legally necessary, desirable and sufficient to effect  all the foregoing provisions of this Section.                                              21 

 

                                       ARTICLES                 RIGHTS AND    OBLIGATIONS OF    THE LIMITED PARTNERS          8.1    Management of the Partnership.          The Limited Partners shall not participate in the management or control of Partnership business   nor shall they transact any business for the Partnership, nor shall they have the power to sign for or bind  the Partnership, such powers being vested solely and exclusively in the General Partner.          8.2    Power of Attorney.          Each Limited Partner hereby irrevocably appoints the General Partner its true and lawful  attorney-in-fact, who may act for each Limited Partner and in its name, place and stead, and for its use  and benefit, to sign, acknowledge, swear to, deliver, file or record, at the appropriate public offices, any  and all documents, certificates, and instruments as may be deemed necessary or desirable by the General  Partner to carry out fully the provisions of this Agreement and the Act in accordance with their terms,  which power of attorney is coupled with an interest and shall survive the death, dissolution or legal  incapacity of the Limited Partner, or the transfer by the Limited Partner of any part or all of its  Partnership Interest.          8.3    Limitation on Liability of Limited Partners.          No  Limited Partner shall be liable for any debts, liabilities, contracts or obligations of the  Partnership. A Limited Partner shall be liable to the Partnership only to make payments of its Capital  Contribution, if any, as and when due hereunder. After its Capital Contribution is fully paid, no Limited  Partner shall, except as otherwise required by the Act, be required to make any further Capital  Contributions or other payments or lend any funds to the Partnership.          8.4    Ownership by Limited Partner of Corporate General Partner or Affiliate.          No Limited Partner shall at any time, either directly or indirectly, own any stock or other interest  in the General Partner or in any Affiliate thereof, if such ownership by itself or in conjunction with other  stock or other interests owned by other Limited Partners would, in the opinion of counsel for the  Partnership, jeopardize the classification of the Partnership as a partnership for federal tax purposes. The  General Partner shall be entitled to make such reasonable inquiry of the Limited Partners as is required to  establish compliance by the Limited Partners with the provisions of this Section.          8.5   Initial Limited Partner Right of Redemption.          (a)   In the event that an Affiliate of the Sponsor ceases to be the Advisor, the Initial Limited  Partner may require the Partnership to redeem its Limited Partnership Interests in exchange for cash in an  amount equal to its Capital Account.          (b)   The  Initial Limited Partner shall have the right, at any time, either to require the  Partnership to redeem all or a portion of the Limited Partnership Interests held by the Initial Limited  Partner in exchange for cash in an amount equal to the Initial Limited Partner's Capital Account or to  transfer to a third party all or a portion of the Limited Partnership Interest held by the Initial Limited  Partner in the event the Initial Limited Partner determines, after consulting with counsel, that such  redemption or transfer is required because a law or regulation precludes it from holding the Limited  Partnership Interests.                                              22 

 

                                      ARTICLE9                   TRANSFERS OF LIMITED PARTNERSHIP INTERESTS          9.1    Purchase for Investmeut.                 (a)   Each Limited Partner hereby represents and warrants to the General Partner and  to the Partnership that the acquisition of his Partnership Interest is made as a principal for his account for  investment purposes only and not with a view to the resale or distribution of such Partnership Interest.                 (b)   Each Limited Partner agrees that he will not sell, assign or otherwise transfer his  Partnership Interest or any fraction thereof, whether voluntarily or by operation of law or at judicial sale  or otherwise, to any Person who does not make the representations and warranties to the General Partner  set forth in Section 9.1 (a) above and similarly agree not to sell, assign or transfer such Partnership Interest  or fraction thereof to any Person who does not similarly represent, warrant and agree.          9.2    Restrictions on Transfer of Limited Partnership Interests.                 (a)   Subject to the provisions of 9.2(b) and (c), no Limited Partner may offer, sell,  assign, hypothecate, pledge or otherwise transfer all or any portion of his Limited Partnership Interest, or  any of such Limited Partner's economic rights as a Limited Partner, whether voluntarily or by operation  of law or at judicial sale or otherwise (collectively,  a "Transfer") without the consent of the General  Partner, which consent may be granted or withheld in its sole and absolute discretion. Any such purported  transfer undertaken without such consent shall be considered to be null and void ab initio and shall not be  given effect. The General Partner may require, as a condition of any Transfer to which it consents, that  the transferor assume all costs incurred by the Partnership in connection therewith.                 (b)   No Limited Partner may withdraw from the Partnership other than as a result of a  permitted Transfer (i.e., a Transfer consented to as contemplated by clause (a) above or clause (c)  below  or a Transfer pursuant to Section 9.5 below) of all of its Partnership Interest pursuant to this Article 9 or  pursuant to a redemption of all of its Pruinership Interests pursuant to Section 8.5. Upon the permitted  Transfer or redemption of al] of a Limited Partner's Partnership Interest, such Limited Partner shall cease  to be a Limited Partner.                 (c)   Notwithstanding Section 9.2(a) and subject to Sections 9.2(d), (e) and (f) below,  a Limited Partner may Transfer, without the consent of the General Partner, an or a portion of its  Partnership Interest to (i) a parent or parent's spouse, natural or adopted descendant or descendants,  spouse of such descendant, or brother or sister, or a trust created by such Limited Partner for the benefit  of such Limited Partner and/or any such person(s), of which trust such Limited Partner or any such  person(s) is a trustee, (ii) a corporation controlled by a Person or Persons nruned in (i) above, or (iii) if the  Limited Partner is an entity, its beneficial owners.                 (d)   No Limited Partner may effect a Transfer of its Limited Partnership Interest, in  whole or in part, if, in the opinion of legal counsel for the Partnership, such proposed Transfer would  require the registration of the Limited Partnership Interest under the Securities Act or would otherwise  violate any applicable federal or state securities or blue sky law (including investment suitability  standards).                 (e)   No Transfer by a Limited Partner of its Partnership Interest, in whole or in part,  may be made to any Person if (i) in the opinion of the General Partner based on the advice of legal  counsel for the Partnership, if appropriate, the transfer would result in the Partnership's being treated as  an association taxable as a corporation ( other than a qualified REIT subsidiary within the meaning of                                              23 

 

 Section 856(i) of the Code), (ii) in the opinion of the General Partner based on the advice of legal counsel  for the Partnership, if appropriate, it would adversely affect the ability of the General Partner to continue  to qualify as a REIT or subject the General Partner to any additional taxes under Section 857 or  Section 4981 of the Code, (iii) such transfer is effectuated through an "established securities market" or a  "secondary market ( or the substantial equivalent thereof)" within the meaning of Section 7704 of the  Code, (iv) such Transfer would cause the General Partner to own 10% or more of the ownership interests  of any tenant of a Property held by the Partnership within the meaning of Section 856( d)(2)(B) of the  Code, or ( v) such Transfer would result in the General Partner being "closely held" within the meaning of  Section 856(h) of the Code.                 (f)   No transfer by a Limited Partner of any Partnership Interest may be made to a  lender to the Partnership or any Person who is related (within the meaning of Regulations Section l. 752- 4(b )) to any lender to the Partnership whose loan constitutes a Nonreeourse Liability, without the consent  of the General Partner, which may be withheld in its sole and absolute discretion, provided that as a  condition to such consent the lender will be required to enter into an arrangement with the Partnership and  the General Partner to exchange or redeem any Partnership Interests in which a security interest is held  for cash in an amount equal to such Partner's Capital Account allocable (in the reasonable determination  of the General Partner) to such exchanged or redeemed Partnership Interests, simultaneously with the  time at which such lender would be deemed to be a Partner in the Partnership for purposes of allocating  liabilities to such lender under Section 752 of the Code.                 (g)   Any Transfer in contravention of any of the provisions of this Article 9 shall be  void and ineffectual and shall not be binding upon, or recognized by, the Partnership.                 (h)   Prior to the consummation of any Transfer under this Article 9, the transferor  and/or the transferee shall deliver to the General Partner such opinions, certificates and other documents  as the General Partner shall request in connection with such Transfer.          9.3   Admission of Substitute Limited Partner.                 (a)   Subject to the other provisions of this Article 9, an assignee of the Limited  Partnership Interest of a Limited Partner (which shall be understood to include any purchaser, transferee,  donee, or other recipient of any disposition of such Limited Partnership Interest) shall be deemed  admitted as a Limited Partner of the Partnership only with the consent of the General Partner and upon the  satisfactory completion of the following:                       (i)    The assignee shall have accepted and agreed to be bound by the terms  and provisions of this Agreement by executing a counterpart or an amendment thereof, including a  revised Exhibit A, and such other documents or instruments as the General Partner may require in order to  effect the admission of such Person as a Limited Partner.                       (ii)   To the extent required, an amended Certificate evidencing the admission  of such Person as a Limited Partner shall have been signed, acknowledged and filed for record in  accordance with the Act.                       (iii)  The assignee shall have delivered a letter containing the representation  set forth in Section 9. l(a) hereof and the agreement set forth in Section 9. l(b) hereof.                       (iv)  If the assignee is a corporation, limited liability company, partnership or  trust, the assignee shall have provided the General Partner with evidence satisfactory to counsel for the                                              24 

 

Partnership of the assignee's authority to become a Limited Partner under the terms and provisions of this  Agreement.                       (v)    The assignee shall have executed a power of attorney containing the  terms and provisions set forth in Section 8.2 hereof.                       (vi)   The assignee shall have paid all legal fees and other expenses of the  Partnership and the General Partner and filing and publication costs in connection with its substitution as  a Limited Partner.                       (vii)  The assignee has obtained the prior written consent of the General  Partner to its admission as a Substitute Limited Partner, which consent may be given or denied in the  exercise of the General Partner's sole and absolute discretion.                 (b)   For the purpose of allocating Profits and Losses and distributing cash received by  the Partnership, a Substitute Limited Partner shall be treated as having become, and appearing in the  records of the Partnership as, a Partner upon the filing of the Certificate described in Section 9.3(a)(ii)  hereof or, if no such filing is required, the later of the date specified in the transfer documents or the date  on which the General Partner has received all necessary instruments of transfer and substitution.                 ( c)  The  General Partner shall cooperate with the Person seeking to become a  Substitute Limited Partner by preparing the documentation required by this Section and making all  official filings and publications. The Partnership shall take all such action as promptly as practicable after  the satisfaction of the conditions in this Article 9 to the admission of such Person as a Limited Partner of  the Partnership.          9.4   Rights of Assignees of Partnership Interests.                (a)    Subject to the provisions of Sections 9. 1 and 9.2 hereof, except as required by  operation of law, the Partnership shall not be obligated for any purposes whatsoever to recognize the  assignment by any Limited Partner of its Partnership Interest until the Partnership has received notice  thereof.                (b)    Any Person who is the assignee of all or any portion of a Limited Partner's  Limited Partnership Interest, but does not become a Substitute Limited Partner and desires to make a  further assignment of such Limited Partnership Interest, shall be subject to all the provisions of this  Article 9 to the same extent and in the same manner as any Limited Partner desiring to make an  assignment of its Limited Partnership Interest.          9.5   Effect of Bankruptcy, Death, Incompetence or Termination of a Limited Partner.          The occurrence of an Event of Bankruptcy as to a Limited Partner, the death of a Limited Partner  or a final adjudication that a Limited Partner is incompetent (which term shall include, but not be limited  to, insanity) shall not cause the termination or dissolution of the Partnership, and the business of the  Partnership shall continue. If an order for relief in a bankruptcy proceeding is entered against a Limited  Partner, the trustee or receiver of his estate or, if he dies, his executor, administrator or trustee, or, if he is  finally adjudicated incompetent, his committee, guardian or conservator, shall have the rights of such  Limited Partner for the pmpose of settling or managing his estate property and such power as the  bankrupt, deceased or incompetent Limited Partner possessed to assign all or any part of his Partnership  Interest and to join with the assignee in satisfying conditions precedent to the admission of the assignee as  a Substitute Limited Partner.                                              25 

 

       9.6    Joint Ownership of Interests.          A Partnership Interest may be acquired by two individuals as joint tenants with right of  survivorship, provided that such individuals either are married or are related and share the same home as  tenants in common. The written consent or vote of both owners of any such jointly held Partnership  Interest shall be required to constitute the action of the owners of such Partnership Interest; provided,  however, that the written consent of only one joint owner will be required if the Partnership has been  provided with evidence satisfactory to the counsel for the Partnership that the actions of a single joint  owner can bind both owners under the applicable laws of the state of residence of such joint owners.  Upon the death of one owner of a Partnership Interest held in a joint tenancy with a right of survivorship,  the Partnership Interest shall become owned solely by the survivor as a Limited Partner and not as an  assignee. The Partnership need not recognize the death of one of the owners of a jointly-held Partnership  Interest until it shall have received notice of such death. Upon notice to the General Partner from either  owner, the General Partner shall cause the Partnership Interest to be divided into two equal Partnership  Interests, which shall thereafter be owned separately by each of the former owners.                                         ARTICLE 10                  BOOKS AND RECORDS;      ACCOUNTING;    TAX MATTERS          10.1  Books and Records.          At all times during the continuance of the Partnership, the Partners shall keep or cause to be kept  at the Partnership's specified office true and complete books of account in accordance with generally  accepted accounting principles, including: (a) a current list of the full name and last known business  address of each Partner, (b) a copy of the Certificate of Limited Partnership and all certificates of  amendment thereto, ( c) copies of the Partnership's federal, state and local income tax returns and reports,  ( d) copies of this Agreement and amendments thereto and any financial statements of the Partnership for  the three most recent years and (e) all documents and information required under the Act. Any Partner or  its duly authorized representative, upon paying the costs of collection, duplication and mailing, shall be  entitled to inspect or copy such records during ordinary business hours.          10.2  Custody of Partnership Funds; Bank Accounts.                (a)    All funds of the Partnership not otherwise invested shall be deposited in one or  more accounts maintained in such banking or brokerage institutions as the General Partner shall  determine, and withdrawals shall be made only on such signature or signatures as the General Partner  may, from time to time, determine.                (b)    All deposits and other funds not needed in the operation of the business of the  Partnership may be invested by the General Partner in investment grade instruments (or investment  companies whose portfolio consists primarily thereof), government obligations, certificates of deposit,  bankers' acceptances and municipal notes and bonds. The funds of the Partnership shall not be  commingled with the funds of any other Person except for such commingling as may necessarily result  from an investment in those investment companies pennitted by this Section I 0.2(b ).          10.3  Fiscal and Taxable Year.         The fiscal and taxable year of the Partnership shall be the calendar year.                                              26 

 

       10.4   Annual Tax Information and Report.          Within seventy-five (75) days after the end of each fiscal year of the Partnership, the General  Partner shall furnish to each person who was a Limited Partner at any time during such year the tax  information necessary to file such Limited Partner's individual tax returns as shall be reasonably required  bylaw.          10.5   Tax Matters Partner; Tax Elections; Special Basis Adjnstments.                 (a)   The General Partner shall be the Tax Matters Partner of the Partnership within  the meaning of Section 623 l(a)(7) of the Code. As Tax Matters Partner, the General Partner shall have  the right and obligation to take all actions authorized and required, respectively, by the Code for the Tax  Matters Partner. The General Prutner shall have the right to retain professional assistance in respect of any  audit of the Partnership by the Service and all out-of-pocket expenses and fees incurred by the General  Partner on behalf of the Partnership as Tax Matters Partner shall constitute Partnership expenses. In the  event the General Partner receives notice of a final Partnership adjustment under Section 6223(a)(2) of  the Code, the General Partner shall either (i) file a court petition for judicial review of such final  adjustment within the period provided under Section 6226(a) of the Code, a copy of which petition shall  be mailed to all Limited Partners on the date such petition is filed, or (ii) mail a written notice to all  Limited Partners, within such period, that describes the General Partner's reasons for determining not to  file such a petition.                 (b)   All elections required or permitted to be made by the Partnership under the Code  or ruw applicable state or local tax law shall be made by the General Partner in its sole and absolute  discretion.                ( c)   In the event of a transfer of all or any part of the Partnership Interest of any  Partner, the Partnership, at the option of the General Partner, may elect pursuant to Section 754 of the  Code to adjust the basis of the Partnership's assets. Notwithstanding anything contained in Article 5 of  this Agreement, any adjustments made pursuant to Section 754 of the Code shall affect only the successor  in interest to the transferring Partner and in no event shall be taken into account in establishing,  maintaining or computing Capital Accounts for the other Partners for any purpose under this Agreement.  Each Partner will furnish the Partnership with all infonnation necessary to give effect to such election.          10.6  Reports to Limited Partners.                (a)    As soon as practicable after the close of each fiscal year, the General Partner  shall cause to be mailed to each Limited Partner an annual report containing financial statements of the  Partnership, or of the General Partner if such statements are prepared solely on a consolidated basis with  the General Partner, for such fiscal year, presented in accordance with generally accepted accounting  principles. The annual financial statements shall be audited by accountants selected by the General  Partner.                (b)    Any Partner shall further have the right to a private audit of the books and  records of the Partnership at the expense of such Partner, provided such audit is made for Partnership  purposes and is made during normal business hours.                                              27 

 

                                      ARTICLE 11                              AMENDMENT OF AGREEMENT          The General Partner's consent shall be required for any amendment to this Agreement. The  General Partner, without the consent of the Limited Partners, may amend this Agreement in any respect;  provided, however, that the following amendments shall require the consent of Limited Partners holding  more than 50% of the Percentage Interests of the Limited Partners:          (a)    any amendment affecting the operation of the redemption right set forth in Section 8.5 in  a manner adverse to the Limited Partners;          (b)    any amendment that would adversely affect the rights of the Limited Partners to receive  the distributions payable to them hereunder, other than with respect to the issuance of additional  Partnership Interests pursuant to Section 4.2 hereof;          (c)   any amendment that would alter the Partnership's allocations of Profit and Loss to the  Limited Partners, other than with respect to the issuance of additional Partnership Interests pursuant to  Section 4.2 hereof; or          (d)   any amendment  that would impose on the Limited Partners any obligation to make  additional Capital Contributions to the Partnership.                                         ARTICLE 12                                  GENERAL PROVISIONS          12.1  Notices.          All communications required or permitted under this Agreement shall be in writing and shall be  deemed to have been given when delivered personally or upon deposit in the United States mail,  registered, postage prepaid return receipt requested, to the Partners at the addresses set forth in Exhibit A  attached hereto; provided, however, that any Partner may specify a different address by notifying the  General Partner in writing of such different address. Notices to the Partnership shall be delivered at or  mailed to its specified office.          12.2  Survival of Rights.          Subject to the provisions hereof limiting transfers, this Agreement shall be binding upon and  inure to the benefit of the Partners and the Partnership and their respective legal representatives,  successors, transferees and assigns.          12.3  Additional Documents.          Each Partner agrees to perform all further acts and execute, swear to, acknowledge and deliver all  further documents which may be reasonable, necessary, appropriate or desirable to carry out the  provisions of this Agreement or the Act.          12.4  Severability.         If any provision of this Agreement shall be declared illegal, invalid, or unenforceable in any  jurisdiction, then such provision shall be deemed to be severable from this Agreement (to the extent                                              28 

 

 permitted by law) and m any event such illegality, invalidity or unenforceability shall not affect the  remainder hereof.          12.5   Entire Agreement.          This Agreement and exhibits attached hereto constitute the entire Agreement of the Partners and  supersede all prior written agreements and prior and contemporaneous oral agreements, understandings  and negotiations with respect to the subject matter hereof.          12.6   Pronouns and Plurals.          When  the context in which words are used in the Agreement indicates that such is the intent,  words in the singular number shall include the plural and the masculine gender shall include the neuter or  female gender as the context may require.          12. 7 Headings.          The Article headings or sections in this Agreement are for convenience only and shall not be used  in construing the scope of this Agreement or any particular Article.          12.8  Counterparts.          This Agreement may be executed in several counterparts, each of which shall be deemed to be an  original copy and all of which together shall constitute one and the same instrument binding on all parties  hereto, notwithstanding that all parties shall not have signed the same counterpart.          12.9  Governing Law.          This Agreement shall be governed by and construed in accordance with the laws of the State of  Delaware; provided, however, that any cause of action for violation of federal or state securities laws shall  not be governed by this Section 12.9.                                              29 

 

       IN WITNESS   WHEREOF,   the parties hereto have hereunder affixed their signatures to this  Amended and Restated Limited Partnership Agreement as of the date first written above.                                           GENERAL PARTNER:                                           Steadfast Secure Iucome REIT, Iuc., a Marylaud                                                             Emery                                                      .f'l.'.,.,,<1utive Officer                                           INITIAL LIMITED PARTNER:                                           Steadfast Secure Iucome Advisor, LLC, a                                          Delaware limited liability compauy                                                        ayson Sanders, President                                              30 

 

                  EXHIBIT A                CONTRIBUTIONS                                              Cash                 Partner                 Contribution   GENERAL PARTNER:       Steadfast Secure Income REIT, Inc.    $ --  INITIAL LIMITED PARTNER:      Steadfast Secure Income Advisor, LLC   $1,000      Totals                                 $1,000                            A-1

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