Document:

Exhibit
10.1

 

 

AMENDED AND RESTATED

 

AGREEMENT OF LIMITED PARTNERSHIP

 

OF

 

KITE REALTY GROUP, L.P.

 

 

Dated as of August 16, 2004

 

 

TABLE OF CONTENTS

 

	
  ARTICLE I DEFINED TERMS

  	
   

  
	
   

  	
   

  
	
  ARTICLE II
  ORGANIZATIONAL MATTERS

  	
   

  
	
  Section 2.1

  	
  Organization

  	
   

  
	
  Section 2.2

  	
  Name

  	
   

  
	
  Section 2.3

  	
  Registered
  Office And Agent; Principal Office

  	
   

  
	
  Section 2.4

  	
  Term

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE III PURPOSE

  	
   

  
	
  Section 3.1

  	
  Purpose
  And Business

  	
   

  
	
  Section 3.2

  	
  Powers

  	
   

  
	
   

  	
   

  
	
  ARTICLE IV
  CAPITAL CONTRIBUTIONS AND ISSUANCES OF PARTNERSHIP INTERESTS

  	
   

  
	
  Section 4.1

  	
  Capital
  Contributions Of The Partners

  	
   

  
	
  Section 4.2

  	
  Issuances Of
  Partnership Interests

  	
   

  
	
  Section 4.3

  	
  No
  Preemptive Rights

  	
   

  
	
  Section 4.4

  	
  Other Contribution
  Provisions

  	
   

  
	
  Section 4.5

  	
  No
  Interest On Capital

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE V DISTRIBUTIONS

  	
   

  
	
  Section 5.1

  	
  Requirement
  And Characterization Of Distributions

  	
   

  
	
  Section 5.2

  	
  Amounts
  Withheld

  	
   

  
	
  Section 5.3

  	
  Distributions Upon
  Liquidation

  	
   

  
	
  Section 5.4

  	
  Revisions
  To Reflect Issuance Of Partnership Interests

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE VI ALLOCATIONS

  	
   

  
	
  Section 6.1

  	
  Allocations
  For Capital Account Purposes

  	
   

  
	
  Section 6.2

  	
  Revisions
  To Allocations To Reflect Issuance Of Partnership Interests

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE VII MANAGEMENT AND OPERATIONS
  OF BUSINESS

  	
   

  
	
  Section 7.1

  	
  Management

  	
   

  
	
  Section 7.2

  	
  Certificate of
  Limited Partnership

  	
   

  
	
  Section 7.3

  	
  Title to Partnership Assets

  	
   

  
	
  Section 7.4

  	
  Reimbursement of
  the General Partner

  	
   

  
	
  Section 7.5

  	
  Outside
  Activities of the General Partner; Relationship of Shares to Partnership
  Units; Funding Debt

  	
   

  
	
  Section 7.6

  	
  Transactions With
  Affiliates

  	
   

  
	
  Section 7.7

  	
  Indemnification

  	
   

  
	
  Section 7.8

  	
  Liability of the
  General Partner

  	
   

  
	
  Section 7.9

  	
  Other
  Matters Concerning the General Partner

  	
   

  
	
  Section 7.10

  	
  Reliance
  By Third Parties

  	
   

  
	
  Section 7.11

  	
  Restrictions
  on General Partner’s Authority

  	
   

  
	
  Section 7.12

  	
  Loans
  by Third Parties

  	
   

  

 

i

 

	
  ARTICLE VIII
  RIGHTS AND OBLIGATIONS OF LIMITED PARTNERS

  	
   

  
	
  Section 8.1

  	
  Limitation
  of Liability

  	
   

  
	
  Section 8.2

  	
  Management
  of Business

  	
   

  
	
  Section 8.3

  	
  Outside
  Activities of Limited Partners

  	
   

  
	
  Section 8.4

  	
  Return
  of Capital

  	
   

  
	
  Section 8.5

  	
  Rights
  of Limited Partners Relating to the Partnership

  	
   

  
	
  Section 8.6

  	
  Redemption Right

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE IX BOOKS, RECORDS, ACCOUNTING
  AND REPORTS

  	
   

  
	
  Section 9.1

  	
  Records and
  Accounting

  	
   

  
	
  Section 9.2

  	
  Fiscal Year

  	
   

  
	
  Section 9.3

  	
  Reports

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE X
  TAX MATTERS

  	
   

  
	
  Section 10.1

  	
  Preparation of
  Tax Returns

  	
   

  
	
  Section 10.2

  	
  Tax Elections

  	
   

  
	
  Section 10.3

  	
  Tax Matters Partner

  	
   

  
	
  Section 10.4

  	
  Organizational
  Expenses

  	
   

  
	
  Section 10.5

  	
  Withholding

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE XI TRANSFERS AND WITHDRAWALS

  	
   

  
	
  Section 11.1

  	
  Transfer

  	
   

  
	
  Section 11.2

  	
  Transfers
  of Partnership Interests of General Partner

  	
   

  
	
  Section 11.3

  	
  Limited
  Partners’ Rights to Transfer

  	
   

  
	
  Section 11.4

  	
  Substituted
  Limited Partners

  	
   

  
	
  Section 11.5

  	
  Assignees

  	
   

  
	
  Section 11.6

  	
  General Provisions

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE XII ADMISSION OF PARTNERS

  	
   

  
	
  Section 12.1

  	
  Admission
  of a Successor General Partner

  	
   

  
	
  Section 12.2

  	
  Admission
  of Additional Limited Partners

  	
   

  
	
  Section 12.3

  	
  Amendment
  of Agreement and Certificate of Limited Partnership

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE XIII
  DISSOLUTION AND LIQUIDATION

  	
   

  
	
  Section 13.1

  	
  Dissolution

  	
   

  
	
  Section 13.2

  	
  Winding Up

  	
   

  
	
  Section 13.3

  	
  Compliance
  With Timing Requirements of Regulations;

  Restoration of Deficit Capital Accounts

  	
   

  
	
  Section 13.4

  	
  Rights of
  Limited Partners

  	
   

  
	
  Section 13.5

  	
  Notice of
  Dissolution

  	
   

  
	
  Section 13.6

  	
  Cancellation
  of Certificate of Limited Partnership

  	
   

  
	
  Section 13.7

  	
  Reasonable
  Time for Winding Up

  	
   

  
	
  Section 13.8

  	
  Waiver of Partition

  	
   

  
	
  Section 13.9

  	
  Liability Of
  Liquidator

  	
   

  

 

ii

 

	
  ARTICLE XIV AMENDMENT OF PARTNERSHIP
  AGREEMENT; MEETINGS

  	
   

  
	
  Section 14.1

  	
  Amendments

  	
   

  
	
  Section 14.2

  	
  Meetings of the
  Partners

  	
   

  
	
   

  	
   

  	
   

  
	
  ARTICLE XV GENERAL PROVISIONS

  	
   

  
	
  Section 15.1

  	
  Addresses and Notice

  	
   

  
	
  Section 15.2

  	
  Titles and Captions

  	
   

  
	
  Section 15.3

  	
  Pronouns And Plurals

  	
   

  
	
  Section 15.4

  	
  Further Action

  	
   

  
	
  Section 15.5

  	
  Binding Effect

  	
   

  
	
  Section 15.6

  	
  Creditors

  	
   

  
	
  Section 15.7

  	
  Waiver

  	
   

  
	
  Section 15.8

  	
  Counterparts

  	
   

  
	
  Section 15.9

  	
  Applicable Law

  	
   

  
	
  Section 15.10

  	
  Invalidity Of
  Provisions

  	
   

  
	
  Section 15.11

  	
  Power Of Attorney

  	
   

  
	
  Section 15.12

  	
  Entire Agreement

  	
   

  
	
  Section 15.13

  	
  No Rights As
  Shareholders

  	
   

  
	
  Section 15.14

  	
  Limitation
  To Preserve REIT Status

  	
   

  

 

EXHIBITS

 

EXHIBIT
A FORM OF PARTNER REGISTRY

EXHIBIT
B CAPITAL ACCOUNT MAINTENANCE

EXHIBIT
C SPECIAL ALLOCATION RULES

EXHIBIT
D NOTICE OF REDEMPTION

 

iii

 

AMENDED AND RESTATED

AGREEMENT OF LIMITED PARTNERSHIP

OF

KITE REALTY GROUP, L.P.

 

THIS AMENDED AND RESTATED
AGREEMENT OF LIMITED PARTNERSHIP, dated as of August 16, 2004, is entered
into by and among Kite Realty Group Trust, a Maryland real estate investment
trust, as the General Partner, and the Persons whose names are set forth on the
Partner Registry (as hereinafter defined) as Limited Partners, together with
any other Persons who become Partners in the Partnership as provided herein.

 

WHEREAS, the General Partner
and the Organizational Limited Partner entered into an Agreement of Limited
Partnership of Kite Realty Group, L.P. dated as of March 29, 2004,
pursuant to which the Partnership was formed (the “Original Agreement”);

 

NOW, THEREFORE, in
consideration of the mutual covenants set forth herein, and for other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto hereby agree to amend and restate the Original
Agreement in its entirety and agree to continue the Partnership as a limited
partnership under the Delaware Revised Uniform Limited Partnership Act, as
amended from time to time, as follows:

 

ARTICLE I

DEFINED TERMS

 

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

 

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

 

“Additional Limited Partner”
means a Person admitted to the Partnership as a Limited Partner pursuant to
Section 12.2 hereof and who is shown as a Limited Partner on the
Partnership Registry.

 

“Adjusted Capital Account”
means the Capital Account maintained for each Partner as of the end of each
Fiscal Year (i) increased by any amounts which such Partner is obligated to
restore pursuant to any provision of this Agreement or is deemed to be obligated
to restore pursuant to the penultimate sentences of Regulations Sections
1.704-2(g)(1) and 1.704-2(i)(5) and (ii) decreased by the items described in
Regulations Sections 1.704-1(b)(2)(ii)(d)(4), 1.704-1(b)(2)(ii)(d)(5) and
1.704-1(b)(2)(ii)(d)(6). The foregoing definition of Adjusted Capital Account
is intended to comply with the provisions of Regulations
Section 1.704-1(b)(2)(ii)(d) and shall be interpreted consistently
therewith.

 

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

 

1

 

“Adjusted Property” means any
property the Carrying Value of which has been adjusted pursuant to Exhibit B.

 

“Affiliate” means, with respect
to any Person, (i) any Person directly or indirectly controlling, controlled by
or under common control with such Person, (ii) any Person owning or controlling
ten percent (10%) or more of the outstanding voting interests of such Person,
(iii) any Person of which such Person owns or controls ten percent (10%) or
more of the voting interests or (iv) any officer, director, general partner or
trustee of such Person or any Person referred to in clauses (i), (ii), and
(iii) above. For purposes of this definition, “control,” when used with respect
to any Person, means the power to direct the management and policies of such
Person, directly or indirectly, whether through the ownership of voting
securities, by contract or otherwise, and the terms “controlling” and
“controlled” have meanings correlative to the foregoing.

 

“Aggregate DRO Amount” means
the aggregate balances of the DRO Amounts, if any, of all DRO Partners, if any,
as determined on the date in question.

 

“Agreed Value” means (i) in the
case of any Contributed Property, the Section 704(c) Value of such
property as of the time of its contribution to the Partnership, reduced by any
liabilities either assumed by the Partnership upon such contribution or to
which such property is subject when contributed; and (ii) in the case of any
property distributed to a Partner by the Partnership, the Partnership’s
Carrying Value of such property at the time such property is distributed,
reduced by any indebtedness either assumed by such Partner upon such
distribution or to which such property is subject at the time of distribution
as determined under Section 752 of the Code and the regulations
thereunder.

 

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

 

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

 

“Available Cash” means, with
respect to any period for which such calculation is being made:

 

(a)                                  all
cash revenues and funds received by the Partnership from whatever source
(excluding the proceeds of any Capital Contribution, unless otherwise
determined by the General Partner in its sole and absolute discretion) plus the
amount of any reduction (including, without limitation, a reduction resulting
because the General Partner determines such amounts are no longer necessary) in
reserves of the Partnership, which reserves are referred to in clause (b)(iv)
below;

 

(b)                                 less
the sum of the following (except to the extent made with the proceeds of any
Capital Contribution):

 

(i)                                     all
interest, principal and other debt payments made during such period by the
Partnership,

 

2

 

(ii)                                  all
cash expenditures (including capital expenditures) made by the Partnership
during such period,

 

(iii)                               investments
in any entity (including loans made thereto) to the extent that such
investments are permitted under this Agreement and are not otherwise described
in clauses (b)(i) or (ii), and

 

(iv)                              the
amount of any increase in reserves established during such period which the
General Partner determines is necessary or appropriate in its sole and absolute
discretion (including any reserves that may be necessary or appropriate to
account for distributions required with respect to Partnership Interests having
a preference over other classes of Partnership Interests).

 

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

 

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

 

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

 

“Capital Account” means the
Capital Account maintained for a Partner pursuant to Exhibit B. The initial
Capital Account balance for each Partner who is a Partner on the date hereof
shall be the amount set forth opposite such Partner’s name on the Partner
Registry.

 

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

 

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

 

3

 

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

 

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

 

“Class A” has the meaning set
forth in Section 5.1.C.

 

“Class A Share” has the meaning
set forth in Section 5.1.C.

 

“Class A Unit” means any
Partnership Unit that is not specifically designated by the General Partner as
being of another specified class of Partnership Units.

 

“Class B” has the meaning set
forth in Section 5.1.C.

 

“Class B Share” has the meaning
set forth in Section 5.1.C.

 

“Class B Unit” means a
Partnership Unit that is specifically designated by the General Partner as
being a Class B Unit.

 

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

 

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

 

“Consent of the Outside Limited
Partners” means the Consent of Limited Partners (excluding for this purpose (i)
any Limited Partnership Interests held by the General Partner or the General
Partner Entity, (ii) any Person of which the General Partner or the General
Partner Entity directly or indirectly owns or controls more than fifty percent
(50%) of the voting interests and (iii) any Person directly or indirectly
owning or controlling more than fifty percent (50%) of the outstanding voting
interests of the General Partner or the General Partner Entity) holding Partnership
Interests representing more than fifty percent (50%) of the Percentage Interest
of the Class A Units of all Limited Partners who are not excluded for the
purposes hereof.

 

“Contributed Property” means
each property or other asset contributed to the Partnership, in such form as
may be permitted by the Act, but excluding cash contributed or deemed
contributed to the Partnership. Once the Carrying Value of a Contributed
Property is adjusted pursuant to Exhibit B, such property shall no longer constitute
a Contributed Property for purposes of Exhibit B, but shall be deemed an
Adjusted Property for such purposes.

 

“Conversion Factor” means 1.0;
provided that, if the General Partner Entity (i) declares or pays a dividend on
its outstanding Shares in Shares or makes a distribution to all holders of its
outstanding Shares in Shares, (ii) subdivides its outstanding Shares or (iii)
combines its outstanding Shares into a smaller number of Shares, the Conversion
Factor shall be adjusted by

 

4

 

multiplying
the Conversion Factor by a fraction, the numerator of which shall be the number
of Shares issued and outstanding on the record date for such dividend,
distribution, subdivision or combination (assuming for such purposes that such
dividend, distribution, subdivision or combination has occurred as of such
time) and the denominator of which shall be the actual number of Shares
(determined without the above assumption) issued and outstanding on the record
date for such dividend, distribution, subdivision or combination; and provided
further that if an entity shall cease to be the General Partner Entity (the
“Predecessor Entity”) and another entity shall become the General Partner
Entity (the “Successor Entity”), the Conversion Factor shall be adjusted by
multiplying the Conversion Factor by a fraction, the numerator of which is the
Value of one Share of the Predecessor Entity, determined as of the date when
the Successor Entity becomes the General Partner Entity, and the denominator of
which is the Value of one Share of the Successor Entity, determined as of that
same date. (For purposes of the second proviso in the preceding sentence, if
any shareholders of the Predecessor Entity will receive consideration in connection
with the transaction in which the Successor Entity becomes the General Partner
Entity, the numerator in the fraction described above for determining the
adjustment to the Conversion Factor (that is, the Value of one Share of the
Predecessor Entity) shall be the sum of the greatest amount of cash and the
fair market value (as determined in good faith by the General Partner) of any
securities and other consideration that the holder of one Share in the
Predecessor Entity could have received in such transaction (determined without
regard to any provisions governing fractional shares).) Any adjustment to the
Conversion Factor shall become effective immediately after the effective date
of the event retroactive to the record date, if any, for the event giving rise
thereto, it being intended that (x) adjustments to the Conversion Factor are to
be made to avoid unintended dilution or anti-dilution as a result of
transactions in which Shares are issued, redeemed or exchanged without a
corresponding issuance, redemption or exchange of Partnership Units and (y) if
a Specified Redemption Date shall fall between the record date and the
effective date of any event of the type described above, that the Conversion
Factor applicable to such redemption shall be adjusted to take into account
such event.

 

“Convertible Funding Debt” has
the meaning set forth in Section 7.5.F.

 

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

 

“Declaration of Trust” means
the Declaration of Trust relating to the General Partner filed in the State of
Maryland, as amended or restated from time to time.

 

 “Depreciation” means, for each fiscal year, an amount equal to the
federal income tax depreciation, amortization, or other cost recovery deduction
allowable with respect to an asset

 

5

 

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

 

“Distribution Period” has the
meaning set forth in Section 5.1.C.

 

“DRO Amount” means the amount
specified in the DRO Registry with respect to any DRO Partner, as such DRO
Registry may be amended from time to time.

 

“DRO Partner” means a Partner
who has agreed in writing to be a DRO Partner and has agreed and is obligated
to make certain contributions, not in excess of such DRO Partner’s DRO Amount,
to the Partnership with respect to any deficit balance in such Partner’s
Capital Account upon the occurrence of certain events. A DRO Partner who is
obligated to make any such contribution only upon liquidation of the
Partnership shall be designated in the DRO Registry as a Part I DRO Partner and
a DRO Partner who is obligated to make any such contribution to the Partnership
either upon liquidation of the Partnership or upon liquidation of such DRO
Partner’s Partnership Interest shall be designated in the DRO Registry as a
Part II DRO Partner.

 

“DRO Registry” means the DRO
Registry maintained by the General Partner in the books and records of the
Partnership containing substantially the same information as would be necessary
to complete the Form of DRO Registry attached hereto as Exhibit E.

 

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

 

“Fiscal Year” means the fiscal
year of the Partnership, which shall be the calendar year as provided in
Section 9.2.

 

“Funding Debt” means the
incurrence of any Debt for the purpose of providing funds to the Partnership by
or on behalf of the General Partner Entity, or any wholly owned subsidiary of
either the General Partner or the General Partner Entity.

 

“General Partner” means Kite
Realty Group Trust, a Maryland real estate investment trust, or its successor
or permitted assignee, as general partner of the Partnership.

 

“General Partner Entity” means
the General Partner; provided, however, that if (i) the common shares of
beneficial interest (or other comparable equity interests) of the General
Partner are at any time not Publicly Traded and (ii) the common shares of
beneficial interest (or other comparable equity interests) of an entity that
owns, directly or indirectly, fifty percent (50%) or more of the common shares
of beneficial interest (or other comparable equity interests) of the General
Partner are Publicly Traded, the term “General Partner Entity” shall refer to
such entity whose common shares of beneficial interest (or other comparable
equity securities) are Publicly Traded. If both requirements set forth in
clauses (i) and (ii) above are not satisfied, then the term “General Partner
Entity” shall mean the General Partner.

 

6

 

“General Partnership Interest”
means a Partnership Interest held by the General Partner that is a general
partnership interest. A General Partnership Interest may be expressed as a
number of Partnership Units.

 

“General Partner Payment” has
the meaning set forth in Section 15.14 hereof.

 

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

 

“Immediate Family” means, with
respect to any natural Person, such natural Person’s spouse, parents,
descendants, nephews, nieces, brothers, and sisters.

 

“Incapacity” or “Incapacitated”
means, (i) as to any individual who is a Partner, death, total physical
disability or entry by a court of competent jurisdiction adjudicating such
Partner incompetent to manage his or her Person or estate, (ii) as to any
corporation which is a Partner, the filing of a certificate of dissolution, or
its equivalent, for the corporation or the revocation of its charter, (iii) as
to any partnership or limited liability company which is a Partner, the
dissolution and commencement of winding up of the partnership or limited
liability company, (iv) as to any estate which is a Partner, the distribution
by the fiduciary of the estate’s entire interest in the Partnership, (v) as to
any trustee of a trust which is a Partner, the termination of the trust (but
not the substitution of a new trustee) or (vi) as to any Partner, the
bankruptcy of such Partner. For purposes of this definition, bankruptcy of a
Partner shall be deemed to have occurred when (a) the Partner commences a
voluntary proceeding seeking liquidation, reorganization or other relief under
any bankruptcy, insolvency or other similar law now or hereafter in effect, (b)
the Partner is adjudged as bankrupt or insolvent, or a final and nonappealable
order for relief under any bankruptcy, insolvency or similar law now or
hereafter in effect has been entered against the Partner, (c) the Partner
executes and delivers a general assignment for the benefit of the Partner’s
creditors, (d) the Partner files an answer or other pleading admitting or
failing to contest the material allegations of a petition filed against the
Partner in any proceeding of the nature described in clause (b) above, (e) the
Partner seeks, consents to or acquiesces in the appointment of a trustee,
receiver or liquidator for the Partner or for all or any substantial part of
the Partner’s properties, (f) any proceeding seeking liquidation,
reorganization or other relief under any bankruptcy, insolvency or other
similar law now or hereafter in effect has not been dismissed within one
hundred twenty (120) days after the commencement thereof, (g) the appointment
without the Partner’s consent or acquiescence of a trustee, receiver of
liquidator has not been vacated or stayed within ninety (90) days of such
appointment or (h) an appointment referred to in clause (g) is not vacated
within ninety (90) days after the expiration of any such stay.

 

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

 

7

 

“Limited Partner” means any
Person named as a Limited Partner in the Partner Registry or any Substituted
Limited Partner or Additional Limited Partner, in such Person’s capacity as a
Limited Partner in the Partnership.

 

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

 

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

 

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

 

“Net Income” means, for any
taxable period, the excess, if any, of the Partnership’s items of income and
gain for such taxable period over the Partnership’s items of loss and deduction
for such taxable period. The items included in the calculation of Net Income
shall be determined in accordance with Exhibit B. If an item of income, gain,
loss or deduction that has been included in the initial computation of Net
Income is subjected to the special allocation rules in Exhibit C, Net Income or
the resulting Net Loss, whichever the case may be, shall be recomputed without
regard to such item.

 

“Net Loss” means, for any
taxable period, the excess, if any, of the Partnership’s items of loss and
deduction for such taxable period over the Partnership’s items of income and
gain for such taxable period. The items included in the calculation of Net Loss
shall be determined in accordance with Exhibit B. If an item of income, gain,
loss or deduction that has been included in the initial computation of Net Loss
is subjected to the special allocation rules in Exhibit C, Net Loss or the
resulting Net Income, whichever the case may be, shall be recomputed without
regard to such item.

 

“New Securities” means (i) any
rights, options, warrants or convertible or exchangeable securities having the
right to subscribe for or purchase Shares, excluding grants under any Share
Option Plan, or (ii) any Debt issued by the General Partner Entity that
provides any of the rights described in clause (i).

 

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

 

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

 

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

 

8

 

“Notice of Redemption” means a
Notice of Redemption substantially in the form of Exhibit D.

 

“Organizational Limited
Partner” means Alvin Kite.

 

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

 

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

 

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

 

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

 

“Partner Registry” means the
Partner Registry maintained by the General Partner in the books and records of
the Partnership, which contains substantially the same information as would be
necessary to complete the form of the Partner Registry attached hereto as
Exhibit A.

 

“Partnership” means the limited
partnership formed under the Act upon the terms and conditions set forth in the
Original Agreement and continued pursuant to this Agreement, or any successor
to such limited partnership.

 

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

 

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

 

“Partnership Record Date” means
the record date established by the General Partner either (i) for the
distribution of Available Cash pursuant to Section 5.1 hereof, which
record date shall be the same as the record date established by the General
Partner Entity for a distribution to its shareholders of some or all of its
portion of such distribution, or (ii) if applicable, for determining the
Partners entitled to vote on or consent to any proposed action for which the
consent or approval of the Partners is sought pursuant to Section 14.2
hereof.

 

9

 

“Partnership Unit” means a
fractional, undivided share of the Partnership Interests of all Partners issued
pursuant to Sections 4.1 and 4.2, and includes Class A Units, Class B Units,
and any other classes or series of Partnership Units established after the date
hereof. The number of Partnership Units outstanding and the Percentage
Interests in the Partnership represented by such Partnership Units are set
forth in the Partner Registry.

 

“Percentage Interest” means, as
to a Partner holding a class of Partnership Interests, its interest in such class,
determined by dividing the Partnership Units of such class owned by such
Partner by the total number of Partnership Units of such class then
outstanding.  For purposes of
determining the Percentage Interest of the Class A Units at any time when there
are Class B Units outstanding, all Class B Units shall be treated as Class A
Units.

 

“Person” means a natural
person, partnership (whether general or limited), trust, estate, association,
corporation, limited liability company, unincorporated organization, custodian,
nominee or any other individual or entity in its own or any representative
capacity.

 

“Predecessor Entity” has the
meaning set forth in the definition of “Conversion Factor” herein.

 

“Publicly Traded” means listed
or admitted to trading on the New York Stock Exchange, the American Stock
Exchange or another national securities exchange or designated for quotation on
the NASDAQ National Market, or any successor to any of the foregoing.

 

“Qualified Assets” means any of
the following assets: (i) Interests, rights, options, warrants or convertible
or exchangeable securities of the Partnership; (ii) Debt issued by the
Partnership or any Subsidiary thereof in connection with the incurrence of
Funding Debt; (iii) equity interests in Qualified REIT Subsidiaries and limited
liability companies whose assets consist solely of Qualified Assets; (iv) up to
a one percent (1%) equity interest in any partnership or limited liability
company at least ninety-nine percent (99%) of the equity of which is owned,
directly or indirectly, by the Partnership; (v) cash held for payment of
administrative expenses or pending distribution to security holders of the
General Partner Entity or any wholly owned Subsidiary thereof or pending
contribution to the Partnership; and (vi) other tangible and intangible assets
that, taken as a whole, are de minimis in relation to the net assets of the
Partnership and its Subsidiaries.

 

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

 

“Recapture Income” means any
gain recognized by the Partnership (computed without regard to any adjustment
required by Section 734 or Section 743 of the Code) upon the
disposition of any property or asset of the Partnership, which gain is
characterized either as ordinary income or as “unrecaptured Section 1250
gain” (as defined in Section 1(h)(6) of the Code) because it represents
the recapture of depreciation deductions previously taken with respect to such
property or asset.

 

“Recourse Liabilities” means
the amount of liabilities owed by the Partnership (other than Nonrecourse
Liabilities and liabilities to which Partner Nonrecourse Deductions are
attributable in accordance with Section 1.704-(2)(i) of the Regulations).

 

10

 

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

 

“Redemption Amount” means
either the Cash Amount or the Shares Amount, as determined by the General
Partner, in its sole and absolute discretion; provided that if the Shares are
not Publicly Traded at the time a Redeeming Partner exercises its Redemption
Right, the Redemption Amount shall be paid only in the form of the Cash Amount
unless the Redeeming Partner, in its sole and absolute discretion, consents to
payment of the Redemption Amount in the form of the Shares Amount. A Redeeming
Partner shall have no right, without the General Partner’s consent, in its sole
and absolute discretion, to receive the Redemption Amount in the form of the
Shares Amount.

 

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

 

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

 

“REIT” means an entity that
qualifies as a real estate investment trust under the Code.

 

“REIT Requirements” has the
meaning set forth in Section 5.1.A.

 

“Residual Gain” or “Residual
Loss” means any item of gain or loss, as the case may be, of the Partnership
recognized for federal income tax purposes resulting from a sale, exchange or
other disposition of Contributed Property or Adjusted Property, to the extent
such item of gain or loss is not allocated pursuant to Section 2.B.1(a) or
2.B.2(a) of Exhibit C to eliminate Book-Tax Disparities.

 

“Safe Harbor” has the meaning
set forth in Section 11.6.F.

 

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

 

“Section 704(c) Value” of
any Contributed Property means the fair market value of such property at the
time of contribution as determined by the General Partner using such reasonable
method of valuation as they may adopt; provided, however, subject to Exhibit B,
the General Partner shall, in its sole and absolute discretion, use such method
as it deems reasonable and appropriate to allocate the aggregate of the
Section 704(c) Value of Contributed Properties in a single or integrated
transaction among each separate property on a basis proportional to its fair market
values.

 

“Share” means a share of
beneficial interest (or other comparable equity interest) of the General
Partner Entity. Shares may be issued in one or more classes or series in
accordance with the terms of the Declaration of Trust (or, if the General Partner
is not the General Partner Entity, the organizational documents of the General
Partner Entity). If there is more than one class or series of Shares, the term
“Shares” shall, as the context requires, be deemed to refer to the class or
series of Shares that corresponds to the class or series of Partnership
Interests for which the reference to Shares is made. When used with reference
to Class A Units, the term “Shares” refers to common shares of beneficial
interest (or other comparable equity interest) of the General Partner Entity.

 

11

 

“Share Option Plan” means any
equity incentive plan of the General Partner, the General Partner Entity, the
Partnership and/or any Affiliate of the Partnership.

 

“Shares Amount” means a number
of Shares equal to the product of the number of Partnership Units offered for
redemption by a Redeeming Partner times the Conversion Factor; provided that,
if the General Partner Entity issues to holders of Shares securities, rights, options,
warrants or convertible or exchangeable securities entitling such holders to
subscribe for or purchase Shares or any other securities or property
(collectively, the “rights”), then the Shares Amount shall also include such
rights that a holder of that number of Shares would be entitled to receive
unless the Partnership issues corresponding rights to holders of Partnership
Units.

 

“Specified Redemption Date”
means the tenth Business Day after receipt by the General Partner of a Notice
of Redemption or such shorter period as the General Partner, in its sole and
absolute discretion may determine; provided that, if the Shares are not
Publicly Traded, the Specified Redemption Date means the thirtieth Business Day
after receipt by the General Partner of a Notice of Redemption.

 

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

 

“Substituted Limited Partner”
means a Person who is admitted as a Limited Partner to the Partnership pursuant
to Section 11.4 and who is shown as a Limited Partner in the Partner
Registry.

 

“Successor Entity” has the
meaning set forth in the definition of “Conversion Factor” herein.

 

“Termination Transaction” has
the meaning set forth in Section 11.2.B.

 

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

 

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

 

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

 

“Value” means, with respect to
one Share of a class of outstanding Shares of the General Partner Entity that
are Publicly Traded, the average of the daily market price for the ten
consecutive trading days immediately preceding the date with respect to which
value must be determined. The market price for each such trading day shall be
the closing price, regular way,

 

12

 

on such day,
or if no such sale takes place on such day, the average of the closing bid and
asked prices on such day. If the outstanding Shares of the General Partner
Entity are Publicly Traded and the Shares Amount includes, in addition to the
Shares, rights or interests that a holder of Shares has received or would be
entitled to receive, then the Value of such rights shall be determined by the
General Partner acting in good faith on the basis of such quotations and other
information as it considers, in its reasonable judgment, appropriate. If the
Shares of the General Partner Entity are not Publicly Traded, the Value of the
Shares Amount per Partnership Unit offered for redemption (which will be the
Cash Amount per Partnership Unit offered for redemption payable pursuant to
Section 8.6.A) means the amount that a holder of one Partnership Unit
would receive if each of the assets of the Partnership were to be sold for its
fair market value on the Specified Redemption Date, the Partnership were to pay
all of its outstanding liabilities, and the remaining proceeds were to be
distributed to the Partners in accordance with the terms of this Agreement.
Such Value shall be determined by the General Partner, acting in good faith and
based upon a commercially reasonable estimate of the amount that would be
realized by the Partnership if each asset of the Partnership (and each asset of
each partnership, limited liability company, trust, joint venture or other
entity in which the Partnership owns a direct or indirect interest) were sold
to an unrelated purchaser in an arms’ length transaction where neither the
purchaser nor the seller were under economic compulsion to enter into the
transaction (without regard to any discount in value as a result of the
Partnership’s minority interest in any property or any illiquidity of the
Partnership’s interest in any property).

 

ARTICLE II

ORGANIZATIONAL MATTERS

 

Section 2.1                                        Organization

 

A.                                   Organization,
Status and Rights.  The Partnership
is a limited partnership organized pursuant to the provisions of the Act and
upon the terms and conditions set forth in the Original Agreement, as amended
by this Agreement. The Partners hereby confirm and agree to their status as
Partners of the Partnership and to continue the business of the Partnership on
the terms set forth in this Agreement. Immediately after the admission of an
additional Limited Partner, the Organizational Limited Partner is withdrawing
from the Partnership and relinquishing any and all rights or interest he may
have in the Partnership, and the Partnership is being continued without
dissolution.  Except as expressly
provided herein, the rights and obligations of the Partners and the
administration and termination of the Partnership shall be governed by the Act.
The Partnership Interest of each Partner shall be personal property for all
purposes.

 

B.                                     Qualification
of Partnership.  The Partners
(i) agree that if the laws of any jurisdiction in which the Partnership
transacts business so require, the appropriate officers or other authorized
representatives of the Partnership shall file, or shall cause to be filed, with
the appropriate office in that jurisdiction, any documents necessary for the
Partnership to qualify to transact business under such laws; and
(ii) agree and obligate themselves to execute, acknowledge and cause to be
filed for record, in the place or places and manner prescribed by law, any
amendments to the Certificate of Limited Partnership as may be required, either
by the Act, by the laws of any jurisdiction in which the Partnership transacts
business, or by this

 

13

 

Agreement, to
reflect changes in the information contained therein or otherwise to comply
with the requirements of law for the continuation, preservation and operation
of the Partnership as a limited partnership under the Act.

 

C.                                     Representations.  Each Partner represents and warrants that
such Partner is duly authorized to execute, deliver and perform its obligations
under this Agreement and that the Person, if any, executing this Agreement on
behalf of such Partner is duly authorized to do so and that this Agreement is
binding on and enforceable against such Partner in accordance with its terms.

 

Section 2.2                                        Name

 

The name of the Partnership is
Kite Realty Group, L.P.  The
Partnership’s business may be conducted under any other name or names deemed
advisable by the General Partner, including the name of any of the General
Partner or any Affiliate thereof. The words “Limited Partnership,” “L.P.,”
“Ltd.” or similar words or letters shall be included in the Partnership’s name
where necessary for the purposes of complying with the laws of any jurisdiction
that so requires. The General Partner in its sole and absolute discretion may
change the name of the Partnership at any time and from time to time and shall
notify the Limited Partners of such change in the next regular communication to
the Limited Partners.

 

Section 2.3                                        Registered Office And Agent;
Principal Office

 

The address of the registered
office of the Partnership in the State of Delaware shall be located at 2711
Centreville Road, Suite 400, Wilmington, Delaware 19808, and the registered
agent for service of process on the Partnership in the State of Delaware at
such registered office shall be Corporation Service Company. The principal
office of the Partnership shall be 30 South Meridian Street, Suite 1100,
Indianapolis, Indiana 46204, or such other place as the General Partner may
from time to time designate by notice to the Limited Partners. The Partnership
may maintain offices at such other place or places within or outside the State
of Delaware as the General Partner deems advisable.

 

Section 2.4                                        Term

 

The term of the Partnership
commenced on March 29, 2004, and shall continue until dissolved pursuant
to the provisions of Article XIII or as otherwise provided by law.

 

ARTICLE III

PURPOSE

 

Section 3.1                                        Purpose And Business

 

The purpose and nature of the
business to be conducted by the Partnership is (i) to conduct any business that
may be lawfully conducted by a limited partnership organized pursuant to the
Act; (ii) to enter into any corporation, partnership, joint venture, trust,
limited

 

14

 

liability
company or other similar arrangement to engage in any of the foregoing or the
ownership of interests in any entity engaged, directly or indirectly, in any of
the foregoing; and (iii) to do anything necessary or incidental to the
foregoing; provided, however, that any business shall be limited to and
conducted in such a manner as to permit the General Partner and, if different,
the General Partner Entity at all times to be classified as a REIT, unless the
General Partner or General Partner Entity, as applicable, in its sole and
absolute discretion has chosen to cease to qualify as a REIT or has chosen not
to attempt to qualify as a REIT for any reason or reasons whether or not
related to the business conducted by the Partnership. In connection with the
foregoing, and without limiting the General Partner or the General Partner
Entity’s right, in its sole and absolute self discretion, to cease qualifying
as a REIT, the Partners acknowledge that the status of the General Partner
Entity as a REIT inures to the benefit of all the Partners and not solely to
the General Partner, the General Partner Entity or their Affiliates.

 

Section 3.2                                        Powers

 

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

 

ARTICLE IV

CAPITAL CONTRIBUTIONS AND ISSUANCES OF PARTNERSHIP INTERESTS

 

Section 4.1                                        Capital Contributions Of The
Partners

 

Prior to the execution of this
Agreement, the Partners have made the Capital Contributions as set forth in the
Partner Registry. On the dater hereof, the Partners own Partnership Units in
the amounts set forth in the Partner Registry and have Percentage Interests in
the Partnership as set forth in the Partner Registry.  The number of Partnership Units and Percentage Interest shall be
adjusted in the Partner Registry from time to time by the General Partner to
the extent necessary to reflect accurately exchanges, redemptions, Capital
Contributions, the issuance of additional Partnership Units or similar events
having an effect on a Partner’s Percentage Interest occurring after the date
hereof in accordance with the terms of this Agreement. To the extent the
Partnership acquires any property by the merger of any other

 

15

 

Person into
the Partnership or any of its Subsidiaries, Persons who receive Partnership
Interests in exchange for their interests in the Person merging into the
Partnership or any Subsidiary shall become Partners and shall be deemed to have
made Capital Contributions as provided in the applicable merger agreement and
as set forth in the Partner Registry. One thousand (1,000) Partnership Units
shall be deemed to be the General Partner’s Partnership Units and shall be the
General Partnership Interest of the General Partner. All other Partnership
Units held by the General Partner shall be deemed to be Limited Partnership
Interests and shall be held by the General Partner in its capacity as a Limited
Partner in the Partnership. Except as provided in Sections 7.5, 10.5, and 13.3
hereof, the Partners shall have no obligation to make any additional Capital
Contributions or provide any additional funding to the Partnership (whether in
the form of loans, repayments of loans or otherwise). Except as otherwise set
forth in Section 13.3 hereof, no Partner shall have any obligation to
restore any deficit that may exist in its Capital Account, either upon a
liquidation of the Partnership or otherwise.

 

Section 4.2                                        Issuances Of Partnership Interests

 

A.                                   General.
The General Partner is hereby authorized to cause the Partnership from time to
time to issue to Partners (including the General Partner and its Affiliates) or
other Persons (including, without limitation, in connection with the
contribution of property to the Partnership or any of its Subsidiaries)
Partnership Units or other Partnership Interests in one or more classes, or in
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 one or more other classes
of Partnership Interests, all as shall be determined, subject to applicable
Delaware law, by the General Partner in its sole and absolute discretion,
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, (iii) the rights
of each such class or series of Partnership Interests upon dissolution and
liquidation of the Partnership, (iv) the rights, if any, of each such class to
vote on matters that require the vote or Consent of the Limited Partners, and
(v) the consideration, if any, to be received by the Partnership; provided that
no such Partnership Units or other Partnership Interests shall be issued to the
General Partner unless either (a) the Partnership Interests are issued in
connection with the grant, award or issuance of Shares or other equity
interests in the General Partner having designations, preferences and other
rights such that the economic interests attributable to such Shares or other
equity interests are substantially similar to the designations, preferences and
other rights (except voting rights) of the Partnership Interests issued to the
General Partner in accordance with this Section 4.2.A or (b) the additional
Partnership Interests are issued to all Partners holding Partnership Interests
in the same class in proportion to their respective Percentage Interests in
such class. If the Partnership issues Partnership Interests pursuant to this
Section 4.2.A, the General Partner shall make such revisions to this
Agreement (including but not limited to the revisions described in
Section 5.4, Section 6.2 and Section 8.6) as it deems necessary
to reflect the issuance of such Partnership Interests. The designation of any
newly issued class or series of Partnership Interests may provide a formula for
treating such Partnership Interests solely for purposes of voting on or
consenting to any matter that requires the vote or Consent of the Limited
Partners as set forth in one or more of Sections 7.5.A, 7.11.A, 7.11.B,

 

16

 

11.2.B,
13.1(i), 13.1(ii), 13.1(vi), 14.1.A, 14.1.C, 14.2.A, and 14.2.B of this
Agreement as the equivalent of a specified number (including any fraction
thereof) of Class A Units.

 

B.                                     Classes
of Partnership Units. From and after the date of the Agreement, the
Partnership shall have two classes of Partnership Units entitled “Class A
Units” and “Class B Units” and such additional classes of Partnership Units as
may be created by the General Partner pursuant to Section 4.2.A.  Class A Units, Class B Units, or a class of
Partnership Interests created pursuant to Section 4.2.A, at the election
of the General Partner, in its sole and absolute discretion, may be issued to newly
admitted Partners in exchange for the contribution by such Partners of cash,
real estate partnership interests, stock, notes or other assets or
consideration; provided that any Partnership Unit that is not specifically
designated by the General Partner as being of a particular class shall be
deemed to be a Class A Unit. Each Class B Unit shall be converted automatically
into a Class A Unit on the day immediately following the Partnership Record
Date for the Distribution Period (as defined in Section 5.1.C) in which
such Class B Unit was issued, without the requirement for any action by the
General Partner, the Partnership or the Partner holding the Class B Unit.

 

Section 4.3                                        No Preemptive Rights

 

Except to the extent expressly
granted by the Partnership pursuant to another agreement, no Person shall have
any preemptive, preferential or other similar right with respect to (i)
additional Capital Contributions or loans to the Partnership or (ii) issuance
or sale of any Partnership Units or other Partnership Interests.

 

Section 4.4                                        Other Contribution Provisions

 

A.                                   General.
If any Partner is admitted to the Partnership and is given a Capital Account in
exchange for services rendered to the Partnership, such transaction shall be
treated by the Partnership and the affected Partner as if the Partnership had
compensated such Partner in cash, and the Partner had made a Capital
Contribution of such cash to the capital of the Partnership.

 

B.                                     Mergers.
To the extent the Partnership acquires any property (or an indirect interest
therein) by the merger of any other Person into the Partnership or with or into
a Subsidiary of the Partnership in a triangular merger, Persons who receive
Partnership Interests in exchange for their interest in the Person merging into
the Partnership or with or into a Subsidiary of the Partnership shall become
Partners and shall be deemed to have made Capital Contributions as provided in
the applicable merger agreement (or if not so provided, as determined by the
General Partner in its sole and absolute discretion) and as set forth in the
Partner Registry.

 

Section 4.5                                        No Interest On Capital

 

No Partner shall be entitled to
interest on its Capital Contributions or its Capital Account.

 

17

 

ARTICLE V

DISTRIBUTIONS

 

Section 5.1                                        Requirement And Characterization Of
Distributions

 

A.                                   General.
The General Partner shall distribute at least quarterly an amount equal to one
hundred percent (100%) of the Available Cash of the Partnership with respect to
such quarter or shorter period to the Partners in accordance with the terms
established for the class or classes of Partnership Interests held by such
Partners who are Partners on the respective Partnership Record Date with
respect to such quarter or shorter period as provided in Sections 5.1.B, 5.1.C
and 5.1.D and in accordance with the respective terms established for each
class of Partnership Interest. Notwithstanding anything to the contrary
contained herein, in no event may a Partner receive a distribution of Available
Cash with respect to a Partnership Unit for a quarter or shorter period if such
Partner is entitled to receive a distribution with respect to a Share for which
such Partnership Unit has been redeemed or exchanged. Unless otherwise
expressly provided for herein, or in the terms established for a new class or
series of Partnership Interests created in accordance with Article IV
hereof, no Partnership Interest shall be entitled to a distribution in
preference to any other Partnership Interest. The General Partner shall make
such reasonable efforts, as determined by it in its sole and absolute
discretion and consistent with the qualification of the General Partner Entity
as a REIT, to distribute Available Cash (a) to Limited Partners so as to preclude
any such distribution or portion thereof from being treated as part of a sale
of property to the Partnership by a Limited Partner under Section 707 of
the Code or the Regulations thereunder; provided, that, the General Partner and
the Partnership shall not have liability to a Limited Partner under any
circumstances as a result of any distribution to a Limited Partner being so
treated, and (b) to the General Partner in an amount sufficient to enable the
General Partner Entity to make distributions to its shareholders that will
enable the General Partner Entity to (1) satisfy the requirements for
qualification as a REIT under the Code and the Regulations (the “REIT
Requirements”), and (2) avoid any federal income or excise tax liability.

 

B.                                     Method.  (i) Each holder of Partnership Interests
that is entitled to any preference in distribution shall be entitled to a
distribution in accordance with the rights of any such class of Partnership
Interests (and, within such class, pro rata in proportion to the respective
Percentage Interests on such Partnership Record Date); and

 

(ii)                                  To
the extent there is Available Cash remaining after the payment of any
preference in distribution in accordance with the foregoing clause (i), with
respect to Partnership Interests that are not entitled to any preference in
distribution, pro rata to each such class in accordance with the terms of such
class (and, within each such class, pro rata in proportion to the respective
Percentage Interests on such Partnership Record Date).

 

C.                                     Distributions
When Class B Units Are Outstanding. If for any quarter or shorter period
with respect to which a distribution is to be made (a “Distribution Period”)
Class B Units are outstanding on the Partnership Record Date for such
Distribution Period, the General Partner shall allocate the Available Cash with
respect to such Distribution Period available for distribution with respect to
the Class A Units and Class B Units collectively between the Partners who are
holders of Class A Units (“Class A”) and the Partners who are holders of Class
B Units (“Class B”) as follows:

 

18

 

(1)                                  Class
A shall receive that portion of the Available Cash (the “Class A Share”)
determined by multiplying the amount of Available Cash by the following
fraction:

 

 

(2)                                  Class
B shall receive that portion of the Available Cash (the “Class B Share”)
determined by multiplying the amount of Available Cash by the following
fraction:

 

 

(3)                                  For
purposes of the foregoing formulas, (i) “A” equals the number of Class A Units
outstanding on the Partnership Record Date for such Distribution Period; (ii)
“B” equals the number of Class B Units outstanding on the Partnership Record
Date for such Distribution Period; (iii) “Y” equals the number of days in the
Distribution Period; and (iv) “X” equals the number of days in the Distribution
Period for which the Class B Units were issued and outstanding.

 

The Class A Share shall be
distributed pro rata among Partners holding Class A Units on the Partnership
Record Date for the Distribution Period in accordance with the number of Class
A Units held by each Partner on such Partnership Record Date; provided that in
no event may a Partner receive a distribution of Available Cash with respect to
a Class A Unit if a Partner is entitled to receive a distribution with respect
to a Share for which such Class A Unit has been redeemed or exchanged. If Class
B Shares were issued on the same date, the Class B Share shall be distributed
pro rata among the Partners holding Class B Units on the Partnership Record
Date for the Distribution Period in accordance with the number of Class B Units
held by each Partner on such Partnership Record Date. In no event shall any
Class B Units be entitled to receive any distribution of Available Cash for any
Distribution Period ending prior to the date on which such Class B Units are
issued.

 

D.                                    Distributions
When Class B Units Have Been Issued on Different Dates. If Class B Units
which have been issued on different dates are outstanding on the Partnership
Record Date for any Distribution Period, then the Class B Units issued on each
particular date shall be treated as a separate series of Partnership Units for
purposes of making the allocation of Available Cash for such Distribution Period
among the holders of Partnership Units (and the formula for making such
allocation, and the definitions of variables used therein, shall be modified
accordingly). Thus, for example, if two series of Class B Units are outstanding
on the Partnership Record Date for any Distribution Period, the allocation
formula for each series, “Series B1” and “Series B2” would be as follows:

 

(1)                                  Series
B1 shall receive that portion of the Available Cash determined by multiplying
the amount of Available Cash by the following fraction:

 

19

 

 

(2)                                  Series
B2 shall receive that portion of the Available Cash determined by multiplying
the amount of Available Cash by the following fraction:

 

 

(3)                                  For
purposes of the foregoing formulas the definitions set forth in
Section 5.1.C.3 remain the same except that (i) “B1” equals the number of
Partnership Units in Series B1 outstanding on the Partnership Record Date for
such Distribution Period; (ii) “B2” equals the number of Partnership Units in
Series B2 outstanding on the Partnership Record Date for such Distribution
Period; (iii) “X1” equals the number of days in the Distribution Period for
which the Partnership Units in Series B1 were issued and outstanding; and (iv)
“X2” equals the number of days in the Distribution Period for which the
Partnership Units in Series B2 were issued and outstanding.

 

Section 5.2                                        Amounts Withheld

 

All amounts withheld pursuant
to the Code or any provisions of any state or local tax law and
Section 10.5 with respect to any allocation, payment or distribution to
the General Partner, the Limited Partners or Assignees shall be treated as
amounts distributed to the General Partner, Limited Partners or Assignees, as
the case may be, pursuant to Section 5.1 for all purposes under this
Agreement.

 

Section 5.3                                        Distributions Upon Liquidation

 

Proceeds from a Liquidating
Event shall be distributed to the Partners in accordance with
Section 13.2.

 

Section 5.4                                        Revisions To Reflect Issuance Of
Partnership Interests

 

If the Partnership issues
Partnership Interests to the General Partner or any Additional Limited Partner
pursuant to Article IV hereof, the General Partner shall make such
revisions to this Article V and the Partner Registry in the books and records
of the Partnership as it deems necessary to reflect the issuance of such
additional Partnership Interests without the consent or approval of any other
Partner.

 

20

 

ARTICLE VI

ALLOCATIONS

 

Section 6.1                                                           Allocations For Capital Account
Purposes

 

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

 

A.                                   Net
Income.  After giving effect to the
special allocations set forth in Section 1 of Exhibit C of the Partnership
Agreement, Net Income shall be allocated:

 

(1)                                  first,
to the General Partner to the extent that Net Losses previously allocated the
General Partner pursuant to Section 6.1.B(6) exceed Net Income previously
allocated to the General Partner pursuant to this clause (1);

 

(2)                                  second,
to each DRO Partner until the cumulative Net Income allocated such DRO Partner
under this clause (2) equals the cumulative Net Losses allocated such DRO
Partner under Section 6.1.B(5) (and, among the DRO Partners, pro rata in
proportion to their respective percentages of the cumulative Net Losses
allocated to all DRO Partners pursuant to Section 6.1.B(5) hereof);

 

(3)                                  third,
to the General Partner until the cumulative Net Income allocated under this
clause (3) equals the cumulative Net Losses allocated the General Partner under
Section 6.1.B(4);

 

(4)                                  fourth,
to the holders of any Partnership Interests that are entitled to any preference
upon liquidation until the cumulative Net Income allocated under this clause
(4) equals the cumulative Net Losses allocated to such Partners under
Section 6.1.B(3);

 

(5)                                  fifth,
to the holders of any Partnership Interests that are entitled to any preference
in distribution in accordance with the rights of any other class of Partnership
Interests until each such Partnership Interest has been allocated, on a
cumulative basis pursuant to this clause (5), Net Income equal to the amount of
distributions payable that are attributable to the preference of such class of
Partnership Interests whether or not paid (and, within such class, pro rata in
proportion to the respective Percentage Interests as of the last day of the
period for which such allocation is being made); and

 

(6)                                  finally,
with respect to Partnership Interests that are not entitled to any preference
in distribution or with respect to which distributions are not limited to any
preference in distribution, pro rata to each such class in accordance with the
terms of such class (and, within such class, pro rata in proportion to the
respective Percentage Interests as of the last day of the period for which such
allocation is being made).

 

21

 

B.                                     Net Losses. 
After giving effect to the special allocations set forth in
Section 1 of Exhibit C, Net Losses shall be allocated:

 

(1)                                  first,
to the holders of Partnership Interests, in proportion to, and to the extent
that, their share of the Net Income previously allocated pursuant to
Section 6.1.A(6) exceeds, on a cumulative basis, the sum of (a)
distributions with respect to such Partnership Interests pursuant to clause
(ii) of Section 5.1.B and (b) Net Losses allocated under this clause (1);

 

(2)                                  second,
with respect to classes of Partnership Interests that are not entitled to any
preference in distribution upon distribution, pro rata to each such class in accordance
with the terms of such class (and, within such class, pro rata in proportion to
the respective Percentage Interests as of the last day of the period for which
such allocation is being made); provided that Net Losses shall not be allocated
to any Partner pursuant to this Section 6.1.B(2) to the extent that such
allocation would cause such Partner to have an Adjusted Capital Account Deficit
(or increase any existing Adjusted Capital Account Deficit) (determined in each
case (i) by not including in the Partners’ Adjusted Capital Accounts any amount
that a Partner is obligated to contribute to the Partnership with respect to
any deficit in its Capital Account pursuant to Section 13.3 and (ii) in
the case of a Partner who also holds classes of Partnership Interests that are
entitled to any preferences in distribution upon liquidation, by subtracting
from such Partners’ Adjusted Capital Account the amount of such preferred
distribution to be made upon liquidation) at the end of such taxable year (or
portion thereof);

 

(3)                                  third,
with respect to classes of Partnership Interests that are entitled to any
preference in distribution upon liquidation, in reverse order of the priorities
of each such class (and within each such class, pro rata in proportion to their
respective Percentage Interests as of the last day of the period for which such
allocation is being made); provided that Net Losses shall not be allocated to
any Partner pursuant to this Section 6.1.B(3) to the extent that such
allocation would cause such Partner to have an Adjusted Capital Account Deficit
(or increase any existing Adjusted Capital Account Deficit) (determined in each
case by not including in the Partners’ Adjusted Capital Accounts any amount
that a Partner is obligated to contribute to the Partnership with respect to
any deficit in its Capital Account pursuant to Section 13.3) at the end of
such taxable year (or portion thereof);

 

(4)                                  fourth,
to the General Partner in an amount equal to the excess of (a) the amount of
the Partnership Recourse Liabilities over (b) the Aggregate DRO Amount;

 

(5)                                  fifth,
to and among the DRO Partners, in proportion to their respective DRO Amounts,
until such time as the DRO Partners as a group have been allocated cumulative
Net Losses pursuant to this clause (5) equal to the Aggregate DRO Amount; and

 

(6)                                  thereafter,
to the General Partner.

 

22

 

C.                                     Allocation
of Nonrecourse Debt. For purposes of Regulation Section 1.752-3(a),
the Partners agree that Nonrecourse Liabilities of the Partnership in excess of
the sum of (i) the amount of Partnership Minimum Gain and (ii) the total amount
of Nonrecourse Built-in Gain shall be allocated by the General Partner by
taking into account facts and circumstances relating to each Partner’s
respective interest in the profits of the Partnership. For this purpose, the
General Partner shall have the sole and absolute discretion in any fiscal year
to allocate such excess Nonrecourse Liabilities among the Partners in any
manner permitted under Code Section 752 and the Regulations thereunder.

 

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

 

Section 6.2                                        Revisions To Allocations To Reflect
Issuance Of Partnership Interests

 

If the Partnership issues
Partnership Interests to the General Partner or any Additional Limited Partner
pursuant to Article IV hereof, the General Partner shall make such
revisions to this Article VI and the Partner Registry in the books and
records of the Partnership as it deems necessary to reflect the terms of the
issuance of such Partnership Interests, including making preferential
allocations to classes of Partnership Interests that are entitled thereto. Such
revisions shall not require the consent or approval of any other Partner.

 

ARTICLE VII

MANAGEMENT AND OPERATIONS OF BUSINESS

 

Section 7.1                                        Management

 

A.                                   Powers
of General Partner. Except as otherwise expressly provided in this
Agreement, all management powers over the business and affairs of the
Partnership are and shall be exclusively vested in the General Partner, and no
Limited Partner shall have any right to participate in or exercise control or
management power over the business and affairs of the Partnership. The General
Partner may not be removed by the Limited Partners with or without cause
(unless the Shares of the General Partner Entity corresponding to Partnership
Units are not Publicly Traded, in which case the General Partner may be removed
with or without cause by the Consent of the Partners holding Partnership
Interests representing more than fifty percent (50%) of the Percentage Interest
of the Class A Units). In addition to the powers now or hereafter granted a
general partner of a limited partnership under applicable law or which are
granted to the General Partner under any other provision of this Agreement, the
General Partner, subject to Section 7.11, shall have full power and authority
to do all things deemed necessary or desirable by it to conduct the business of
the Partnership, to exercise all powers set forth in Section 3.2 and to
effectuate the purposes set forth in Section 3.1, including, without
limitation:

 

(1)                                  the
making of any expenditures, the lending or borrowing of money (including,
without limitation, making prepayments on loans and borrowing money to permit

 

23

 

the Partnership to make distributions to its Partners in such amounts
as are required under Section 5.1.A or will permit the General Partner
Entity (so long as the General Partner Entity qualifies as a REIT) to avoid the
payment of any federal income tax (including, for this purpose, any excise tax
pursuant to Section 4981 of the Code) and to make distributions to its
shareholders sufficient to permit the General Partner Entity to maintain its
REIT status), the assumption or guarantee of, or other contracting for,
indebtedness and other liabilities including, without limitation, the
assumption or guarantee of the debt of the General Partner, its Subsidiaries or
the Partnership’s Subsidiaries, the issuance of evidences of indebtedness
(including the securing of same by mortgage, deed of trust or other lien or
encumbrance on the Partnership’s assets) and the incurring of any obligations
the General Partner deems necessary for the conduct of the activities of the
Partnership;

 

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

 

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

 

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

 

(5)                                  the
management, operation, leasing, landscaping, repair, alteration, demolition or
improvement of any real property or improvements owned by the Partnership or
any Subsidiary of the Partnership or any Person in which the Partnership has
made a direct or indirect equity investment;

 

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

 

24

 

and other agents and the payment of their expenses and compensation out
of the Partnership’s assets;

 

(7)                                  the
mortgage, pledge, encumbrance or hypothecation of any assets of the
Partnership;

 

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

 

(9)                                  the
holding, managing, investing and reinvesting of cash and other assets of the
Partnership;

 

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

 

(11)                            the
selection, designation of powers, authority and duties and the dismissal of
employees of the Partnership (including, without limitation, employees having
titles such as “president,” “vice president,” “secretary” and “treasurer”) and
agents, outside attorneys, accountants, consultants and contractors of the
Partnership and the determination of their compensation and other terms of
employment or hiring;

 

(12)                            the
maintenance of such insurance for the benefit of the Partnership and the
Partners as it deems necessary or appropriate;

 

(13)                            the
formation of, or acquisition of an interest (including non-voting interests in
entities controlled by Affiliates of the Partnership or third parties) in, and
the contribution of property to, any further limited or general partnerships,
joint ventures, limited liability companies or other relationships that it
deems desirable (including, without limitation, the acquisition of interests
in, and the contributions of funds or property to, or making of loans to, its
Subsidiaries and any other Person in which it has an equity investment from
time to time, or the incurrence of indebtedness on behalf of such Persons or
the guarantee of the obligations of such Persons); provided that, as long as
the General Partner has determined to continue to qualify as a REIT, the
Partnership may not engage in any such formation, acquisition or contribution
that would cause the General Partner to fail to qualify as a REIT;

 

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

 

25

 

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

 

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

 

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

 

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

 

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

 

(20)                            the
distribution of cash to acquire Partnership Units held by a Limited Partner in
connection with a Limited Partner’s exercise of its Redemption Right under
Section 8.6;

 

(21)                            the
determination regarding whether a payment to a Partner who exercises its
Redemption Right under Section 8.6 that is assumed by the General Partner
will be paid in the form of the Cash Amount or the Shares Amount, except as
such determination may be limited by Section 8.6.

 

(22)                            the
acquisition of Partnership Interests in exchange for cash, debt instruments and
other property;

 

(23)                            the
maintenance of the Partner Registry in the books and records of the Partnership
to reflect the Capital Contributions and Percentage Interests of the Partners
as the same are adjusted from time to time to the extent necessary to reflect
redemptions, Capital Contributions, the issuance of Partnership Units, the
admission of any Additional Limited Partner or any Substituted Limited Partner
or otherwise; and

 

(24)                            the
registration of any class of securities of the Partnership under the Securities
Act of 1933, as amended or the Securities Exchange Act of 1934, as amended, and
the listing of any debt securities of the Partnership on any exchange.

 

26

 

B.                                     No
Approval by Limited Partners. Except as provided in Section 7.11, each
of the Limited Partners agrees that the General Partner is authorized to
execute, deliver and perform the above-mentioned agreements and transactions on
behalf of the Partnership without any further act, approval or vote of the
Partners, notwithstanding any other provision of this Agreement, the Act or any
applicable law, rule or regulation, to the full extent permitted under the Act
or other applicable law. The execution, delivery or performance by the General
Partner or the Partnership of any agreement authorized or permitted under this
Agreement shall be in the sole and absolute discretion of the General Partner
without consideration of any other obligation or duty, fiduciary or otherwise,
of the Partnership or the Limited Partners and shall not constitute a breach by
the General Partner of any duty that the General Partner may owe the
Partnership or the Limited Partners or any other Persons under this Agreement
or of any duty stated or implied by law or equity.

 

C.                                     Insurance.  At all times from and after the date hereof,
the General Partner may cause the Partnership to obtain and maintain (i)
casualty, liability and other insurance on the properties of the Partnership
and (ii) liability insurance for the Indemnitees hereunder and (iii) such other
insurance as the General Partner, in its sole and absolute discretion,
determines to be necessary.

 

D.                                    Working
Capital and Other Reserves. At all times from and after the date hereof, the
General Partner may cause the Partnership to establish and maintain working
capital reserves in such amounts as the General Partner, in its sole and
absolute discretion, deems appropriate and reasonable from time to time,
including upon liquidation of the Partnership under Section 13.

 

E.                                      No
Obligations to Consider Tax Consequences of Limited Partners. In exercising
their authority under this Agreement, the General Partner (which for the
purposes of this Section 7.1.E shall include, the board of trustees of the
General Partner) may, but shall be under no obligation to, take into account
the tax consequences to any Partner (including the General Partner) of any
action taken (or not taken) by the General Partner. The General Partner and the
Partnership shall not have liability to a Limited Partner for monetary or other
damages or otherwise for losses sustained, liabilities incurred or benefits not
derived by such Limited Partner in connection with any decisions, provided that
the General Partner has acted in good faith and pursuant to its authority under
this Agreement and any decisions or actions taken or not taken in accordance
with the terms of this Agreement shall not constitute a breach of any duty owed
to the Partnership or the Limited Partners by law or equity, fiduciary or
otherwise.

 

Section 7.2                                        Certificate of Limited Partnership

 

The General Partner has
previously filed the Certificate of Limited Partnership with the Secretary of
State of Delaware. To the extent that such action is determined by the General
Partner to be reasonable and necessary or appropriate, the General Partner
shall file amendments to and restatements of the Certificate of Limited
Partnership and do all the things to maintain the Partnership as a limited
partnership (or a partnership in which the limited partners have limited
liability) under the laws of the State of Delaware and each other state, the
District of Columbia or other jurisdiction in which the Partnership may elect
to do business or own property. Subject to the terms of Section 8.5.A(4),
the General Partner shall not be required, before or after filing, to deliver
or mail a copy of the Certificate of Limited Partnership or any amendment
thereto to any

 

27

 

Limited
Partner. The General Partner shall use all reasonable efforts to cause to be
filed such other certificates or documents as may be reasonable and necessary
or appropriate for the formation, continuation, qualification and operation of
a limited partnership (or a partnership in which the limited partners have
limited liability) in the State of Delaware and any other state, the District
of Columbia or other jurisdiction in which the Partnership may elect to do
business or own property.

 

Section 7.3                                        Title to Partnership Assets

 

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

 

Section 7.4                                        Reimbursement of the General Partner

 

A.                                   No
Compensation.  Except as provided in
this Section 7.4 and elsewhere in this Agreement (including the provisions
of Articles V and VI regarding distributions, payments and allocations to which
it may be entitled), the General Partner shall not receive payments from the
Partnership or otherwise be compensated for its services as the general partner
of the Partnership.

 

B.                                     Responsibility
for Partnership and General Partner and General Partner Entity Expenses.
The Partnership shall be responsible for and shall pay all expenses relating to
the Partnership’s organization, the ownership of its assets and its operations.
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 expenses it incurs relating to or resulting from the ownership and
operation of, or for the benefit of, the Partnership (including, without
limitation, expenses related to the operations of the General Partner and the
General Partner Entity and to the management and administration of any
Subsidiaries of the General Partner, the General Partner Entity or the
Partnership or Affiliates of the Partnership, such as auditing expenses and
filing fees); provided that (i) the amount of any such reimbursement shall be
reduced by (x) any interest earned by the General Partner with respect to bank
accounts or other instruments or accounts held by it on behalf of the
Partnership as permitted in Section 7.5.A (which interest is considered to
belong to the Partnership and shall be paid over to the Partnership to the
extent not applied to reimburse the General Partner for expenses hereunder);
and (y) any amount derived by the General Partner from any investments
permitted in Section 7.5.A; (ii) the Partnership shall not be responsible
for any taxes that the General Partner or General Partner Entity would not have
been required to pay if that entity qualified as a REIT for federal income tax
purposes or any taxes imposed on the General Partner or General Partner Entity
by reason of that entity’s

 

28

 

failure to
distribute to its shareholders an amount equal to its taxable income; (iii) the
Partnership shall not be responsible for expenses or liabilities incurred by
the General Partner in connection with any business or assets of the General
Partner other than its ownership of Partnership Interests or operation of the
business of the Partnership or ownership of interests in Qualified Assets to
the extent permitted in Section 7.5.A; and (iv) the Partnership shall not
be responsible for any expenses or liabilities of the General Partner that are
excluded from the scope of the indemnification provisions of Section 7.7.A
by reason of the provisions of clause (i), (ii) or (iii) thereof. The General
Partner shall determine in good faith the amount of expenses incurred by it or
the General Partner Entity related to the ownership of Partnership Interests or
operation of, or for the benefit of, the Partnership. If certain expenses are
incurred that are related both to the ownership of Partnership Interests or
operation of, or for the benefit of, the Partnership and to the ownership of
other assets (other than Qualified Assets as permitted under
Section 7.7.A) or the operation of other businesses, such expenses will be
allocated to the Partnership and such other entities (including the General
Partner and General Partner Entity) owning such other assets or businesses in
such a manner as the General Partner in its sole and absolute discretion deems
fair and reasonable. Such reimbursements shall be in addition to any
reimbursement to the General Partner and the General Partner Entity pursuant to
Section 10.3.C and as a result of indemnification pursuant to
Section 7.7. All payments and reimbursements hereunder shall be
characterized for federal income tax purposes as expenses of the Partnership
incurred on its behalf, and not as expenses of the General Partner or General
Partner Entity.

 

C.                                     Partnership
Interest Issuance Expenses. The General Partner shall also be reimbursed
for all expenses it incurs relating to any issuance of Partnership Interests,
Shares, Debt of the Partnership, Funding Debt of the General Partner or rights,
options, warrants or convertible or exchangeable securities pursuant to
Article IV (including, without limitation, all costs, expenses, damages
and other payments resulting from or arising in connection with litigation
related to any of the foregoing), all of which expenses are considered by the
Partners to constitute expenses of, and for the benefit of, the Partnership.

 

D.                                    Purchases
of Shares by the General Partner Entity. If the General Partner Entity
exercises its rights under the Declaration of Trust to purchase Shares or
otherwise elects to purchase from its shareholders Shares in connection with a
share repurchase or similar program or for the purpose of delivering such
Shares to satisfy an obligation under any dividend reinvestment or equity purchase
program adopted by the General Partner Entity, any employee equity purchase
plan adopted by the General Partner Entity or any similar obligation or
arrangement undertaken by the General Partner Entity in the future, the
purchase price paid by the General Partner Entity for those Shares and any
other expenses incurred by the General Partner Entity in connection with such
purchase shall be considered expenses of the Partnership and shall be
reimbursable to the General Partner Entity, subject to the conditions that: (i)
if those Shares subsequently are to be sold by the General Partner Entity, the
General Partner Entity shall pay to the Partnership any proceeds received by
the General Partner Entity for those Shares (provided that a transfer of Shares
for Partnership Units pursuant to Section 8.6 would not be considered a
sale for such purposes); and (ii) if such Shares are not retransferred by the
General Partner Entity within thirty (30) days after the purchase thereof, the
General Partner Entity shall cause the Partnership to cancel a number of
Partnership Units (rounded to the nearest whole Partnership Unit) held by the
General Partner Entity equal to the product attained by multiplying

 

29

 

the number of
those Shares by a fraction, the numerator of which is one and the denominator
of which is the Conversion Factor.

 

E.                                      Reimbursement
not a Distribution. Except as set forth in the succeeding sentence, if and
to the extent any reimbursement made pursuant to this Section 7.4 is
determined for federal income tax purposes not to constitute a payment of
expenses of the Partnership, the amount so determined shall constitute a
guaranteed payment with respect to capital within the meaning of
Section 707(c) of the Code, shall be treated consistently therewith by the
Partnership and all Partners and shall not be treated as a distribution for
purposes of computing the Partners’ Capital Accounts.  Amounts deemed paid by the Partnership to the General Partner in
connection with redemption of Partnership Units pursuant to clause (ii) of
subparagraph (D) above shall be treated as a distribution for purposes of
computing the Partner’s Capital Accounts.

 

F.                                      Funding
for Certain Capital Transactions. In the event that the General Partner
Entity shall undertake to acquire (whether by merger, consolidation, purchase,
or otherwise) the assets or equity interests of another Person and such
acquisition shall require the payment of cash by the General Partner Entity
(whether to such Person or to any other selling party or parties in such
transaction or to one or more creditors, if any, of such Person or such selling
party or parties), (i) the Partnership shall advance to the General Partner
Entity the cash required to consummate such acquisition if, and to the extent
that, such cash is not to be obtained by the General Partner Entity through an
issuance of Shares described in Section 4.2 or pursuant to a transaction
described in Section 7.5.B, (ii) the General Partner Entity shall immediately,
upon consummation of such acquisition, transfer to the Partnership (or cause to
be transferred to the Partnership), in full and complete satisfaction of such
advance and as required by Section 7.5, the assets or equity interests of
such Person acquired by the General Partner Entity in such acquisition, and
(iii) pursuant to and in accordance with Section 4.2 and
Section 7.5.B, the Partnership shall issue to the General Partner
Partnership Interests and/or rights, options, warrants or convertible or exchangeable
securities of the Partnership having designations, preferences and other rights
that are substantially the same as those of any additional Shares, other equity
securities, New Securities and/or Convertible Funding Debt, as the case may be,
issued by the General Partner Entity in connection with such acquisition
(whether issued directly to participants in the acquisition transaction or to
third parties in order to obtain cash to complete the acquisition).  In addition to, and without limiting the
foregoing, in the event that the General Partner Entity engages in a
transaction in which (x) the General Partner Entity (or a wholly owned direct
or indirect Subsidiary of the General Partner Entity) merges with another
entity (referred to as the “Parent Entity”) that is organized in the “UPREIT
format” (i.e., where the Parent Entity holds substantially all of its assets
and conducts substantially all of its operations through a partnership, limited
liability company or other entity (referred to as an “Operating Entity”)) and
the General Partner Entity survives such merger, (y) such Operating Entity
merges with or is otherwise acquired by the Partnership in exchange in whole or
in part for Partnership Interests, and (z) the General Partner Entity is required
or elects to pay part of the consideration in connection with such merger
involving the Parent Entity in the form of cash and part of the consideration
in the form of Shares, the Partnership shall distribute to the General Partner
with respect to its existing Partnership Interest an amount of cash sufficient
to complete such transaction and the General Partner shall cause the
Partnership to cancel a number of Partnership Units (rounded to the nearest
whole number) held by the General Partner equal to the product attained by
multiplying the number of additional Shares of the General Partner Entity that
the

 

30

 

General
Partner Entity would have issued to the Parent Entity or the owners of the
Parent Entity in such transaction if the entire consideration therefor were to
have been paid in Shares by a fraction, the numerator of which is one and the
denominator of which is the Conversion Factor.

 

Section 7.5                                        Outside Activities of the General
Partner; Relationship of Shares to Partnership Units; Funding Debt

 

A.                                   General.
Without the Consent of the Outside Limited Partners, the General Partner shall
not, directly or indirectly, enter into or conduct any business other than in
connection with the ownership, acquisition and disposition of Partnership
Interests as General Partner or Limited Partner and the management of the
business of the Partnership and such activities as are incidental thereto.
Without the Consent of the Outside Limited Partners, the assets of the General
Partner shall be limited to Partnership Interests and permitted debt
obligations of the Partnership (as contemplated by Section 7.5.F), so that
Shares and Partnership Units are completely fungible except as otherwise
specifically provided herein; provided that the General Partner shall be
permitted to hold such bank accounts or similar instruments or accounts in its
name as it deems necessary to carry out its responsibilities and purposes as
contemplated under this Agreement and its organizational documents (provided
that accounts held on behalf of the Partnership to permit the General Partner
to carry out its responsibilities under this Agreement shall be considered to
belong to the Partnership and the interest earned thereon shall, subject to
Section 7.4.B, be applied for the benefit of the Partnership); and,
provided further that, the General Partner shall be permitted to acquire
Qualified Assets.

 

B.                                     Repurchase
of Shares and Other Securities. If the General Partner Entity exercises its
rights under the Declaration of Trust to purchase Shares or otherwise elects to
purchase from the holders thereof Shares, other equity securities of the
General Partner Entity, New Securities or Convertible Funding Debt, then the
General Partner shall cause the Partnership to purchase from the General
Partner (i) in the case of a purchase of Shares, that number of Partnership
Units of the appropriate class equal to the product obtained by multiplying the
number of Shares purchased by the General Partner Entity times a fraction, the
numerator of which is one and the denominator of which is the Conversion
Factor, or (ii) in the case of the purchase of any other securities on the same
terms and for the same aggregate price that the General Partner Entity
purchased such securities.

 

C.                                     Forfeiture
of Shares. If the Partnership or the General Partner acquires Shares as a
result of the forfeiture of such Shares under a restricted or similar share,
share bonus or similar share plan, then the General Partner shall cause the
Partnership to cancel, without payment of any consideration to the General
Partner, that number of Partnership Units of the appropriate class equal to the
number of Shares so acquired, and, if the Partnership acquired such Shares, it
shall transfer such Shares to the General Partner for cancellation.

 

D.                                    Issuances
of Shares and Other Securities. The General Partner shall not grant, award,
or issue any additional Shares (other than Shares issued pursuant to
Section 8.6 hereof or pursuant to a dividend or distribution (including
any share split) of Shares to all of its shareholders that results in an
adjustment to the Conversion Factor pursuant to clause (i), (ii) or (iii) of
the definition thereof), other equity securities of the General Partner, New
Securities or Convertible Funding Debt unless (i) the General Partner shall
cause, pursuant to Section 4.2.A

 

31

 

hereof, the
Partnership to issue to the General Partner, Partnership Interests or rights,
options, warrants or convertible or exchangeable securities of the Partnership
having designations, preferences and other rights, all such that the economic
interests are substantially the same as those of such additional Shares, other
equity securities, New Securities or Convertible Funding Debt, as the case may
be, and (ii) the General Partner transfers to the Partnership, as an additional
Capital Contribution, the proceeds from the grant, award, or issuance of such
additional Shares, other equity securities, New Securities or Convertible
Funding Debt, as the case may be, or from the exercise of rights contained in
such additional Shares, other equity securities, New Securities or Convertible
Funding Debt, as the case may be. Without limiting the foregoing, the General Partner
is expressly authorized to issue additional Shares, other equity securities,
New Securities or Convertible Funding Debt, as the case may be, for less than
fair market value, and the General Partner is expressly authorized, pursuant to
Section 4.2.A hereof, to cause the Partnership to issue to the General
Partner corresponding Partnership Interests, (for example, and not by way of
limitation, the issuance of Shares and corresponding Partnership Units pursuant
to a share purchase plan providing for purchases of Shares, either by employees
or shareholders, at a discount from fair market value or pursuant to employee
share options that have an exercise price that is less than the fair market
value of the Shares, either at the time of issuance or at the time of exercise)
as long as (a) the General Partner concludes in good faith that such issuance
is in the interests of the General Partner and the Partnership and (b) the
General Partner transfers all proceeds from any such issuance or exercise to
the Partnership as an additional Capital Contribution.

 

E.                                      Share
Option Plan. If at any time or from time to time, the General Partner sells
or otherwise issues Shares pursuant to any Share Option Plan, the General
Partner shall transfer the proceeds of the sale of such Shares, if any, to the
Partnership as an additional Capital Contribution in exchange for an amount of
additional Partnership Units equal to the number of Shares so sold divided by
the Conversion Factor.

 

F.                                      Funding
Debt. The General Partner or the General Partner Entity or any wholly owned
Subsidiary of either of them may incur a Funding Debt, including, without
limitation, a Funding Debt that is convertible into Shares or otherwise
constitutes a class of New Securities (“Convertible Funding Debt”), subject to
the condition that the General Partner, the General Partner Entity or such
Subsidiary, as the case may be, lend to the Partnership the net proceeds of
such Funding Debt; provided that Convertible Funding Debt shall be issued in
accordance with the provisions of Section 7.5.D above; and, provided
further that the General Partner, the General Partner Entity or such Subsidiary
shall not be obligated to lend the net proceeds of any Funding Debt to the
Partnership in a manner that would be inconsistent with the General Partner’s
or General Partner Entity’s ability to remain qualified as a REIT. If the
General Partner, General Partner Entity or such Subsidiary enters into any
Funding Debt, the loan to the Partnership shall be on comparable terms and conditions,
including interest rate, repayment schedule, costs and expenses and other
financial terms, as are applicable with respect to or incurred in connection
with such Funding Debt.

 

G.                                     Capital
Contributions of the General Partner. 
The Capital Contributions by the General Partner pursuant to Sections
7.5.D and 7.5.E will be deemed to equal the cash contributed by the General
Partner plus (a) in the case of cash contributions funded by an offering of any
equity interests in or other securities of the General Partner, the offering
costs

 

32

 

attributable
to the cash contributed to the Partnership, and (b) in the case of Partnership
Units issued pursuant to Section 7.5.E, an amount equal to the difference
between the Value of the Shares sold pursuant to any Share Option Plan and the
net proceeds of such sale.

 

H.                                    Tax
Loans. The General Partner or the General Partner Entity may in its sole
and absolute discretion, cause the Partnership to make an interest free loan to
the General Partner or the General Partner Entity, as applicable, provided that
the proceeds of such loans are used to satisfy any tax liabilities of the
General Partner or the General Partner Entity, as applicable.

 

Section 7.6                                        Transactions With Affiliates

 

A.                                   Transactions
with Certain Affiliates. Except as expressly permitted by this Agreement
with respect to any non-arms’ length transaction with an Affiliate, the
Partnership shall not, directly or indirectly, sell, transfer or convey any
property to, or purchase any property from, or borrow funds from, or lend funds
to, any Partner or any Affiliate of the Partnership that is not also a
Subsidiary of the Partnership, except pursuant to transactions that are
determined in good faith by the General Partner to be on terms that are fair
and reasonable and no less favorable to the Partnership than would be obtained
from an unaffiliated third party.

 

B.                                     Conflict
Avoidance. The General Partner is expressly authorized to enter into, in
the name and on behalf of the Partnership, a non-competition arrangement and
other conflict avoidance agreements with various Affiliates of the Partnership
and General Partner on such terms as the General Partner, in its sole and
absolute discretion, believes are advisable.

 

C.                                     Benefit
Plans Sponsored by the Partnership. The General Partner in its sole and
absolute discretion and without the approval of the Limited Partners, may
propose and adopt on behalf of the Partnership employee benefit plans funded by
the Partnership for the benefit of employees of the General Partner, the
Partnership, Subsidiaries of the Partnership or any Affiliate of any of them.

 

Section 7.7                                        Indemnification

 

A.                                   General.
The Partnership shall indemnify each Indemnitee to the fullest extent provided
by the Act from and against any and all losses, claims, damages, liabilities,
joint or several, expenses (including, without limitation, attorneys fees and
other legal fees and expenses), judgments, fines, settlements and other amounts
arising from or in connection with any and all claims, demands, actions, suits
or proceedings, civil, criminal, administrative or investigative, incurred by
the Indemnitee and relating to the Partnership or the General Partner or the
General Partner Entity or the operation of, or the ownership of property by,
the Indemnitee, Partnership or the General Partner or the General Partner
Entity as set forth in this Agreement in which any such Indemnitee may be
involved, or is threatened to be involved, as a party or otherwise, unless it is
established by a final determination of a court of competent jurisdiction 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. Without limitation, the foregoing indemnity
shall

 

33

 

extend to any
liability of any Indemnitee, pursuant to a loan guarantee, contractual
obligation for any indebtedness or other obligation or otherwise, for any indebtedness
of the Partnership or any Subsidiary of the Partnership (including, without
limitation, any indebtedness which the Partnership or any Subsidiary of the
Partnership has assumed or taken subject to), and the General Partner is hereby
authorized and empowered, on behalf of the Partnership, to enter into one or
more indemnity agreements consistent with the provisions of this
Section 7.7 in favor of any Indemnitee having or potentially having
liability for any such indebtedness. The termination of any proceeding by
judgment, order or settlement does not create a presumption that the Indemnitee
did not meet the requisite standard of conduct set forth in this
Section 7.7.A. The termination of any proceeding by conviction or upon a
plea of nolo contendere or its equivalent, or an entry of an order of probation
prior to judgment, creates a rebuttable presumption that the Indemnitee acted
in a manner contrary to that specified in this Section 7.7.A with respect
to the subject matter of such proceeding. Any indemnification pursuant to this
Section 7.7 shall be made only out of the assets of the Partnership, and
any insurance proceeds from the liability policy covering the General Partner
and any Indemnitee, and neither the General Partner nor any Limited Partner
shall have any obligation to contribute to the capital of the Partnership or
otherwise provide funds to enable the Partnership to fund its obligations under
this Section 7.7.

 

B.                                     Reimbursement
of Expenses. Reasonable expenses expected to be incurred by an Indemnitee
shall be paid or reimbursed by the Partnership in advance of the final
disposition of any and all claims, demands, actions, suits or proceedings,
civil, criminal, administrative or investigative made or threatened against an
Indemnitee upon receipt by the Partnership of (i) a written affirmation by the
Indemnitee of the Indemnitee’s good faith belief that the standard of conduct
necessary for indemnification by the Partnership as authorized in this
Section 7.7.A has been met and (ii) a written undertaking by or on behalf
of the Indemnitee to repay the amount if it shall ultimately be determined that
the standard of conduct has not been met.

 

C.                                     No
Limitation of Rights. The indemnification provided by this Section 7.7
shall be in addition to any other rights to which an Indemnitee or any other
Person may be entitled under any agreement, pursuant to any vote of the
Partners, as a matter of law or otherwise, and shall continue as to an
Indemnitee who has ceased to serve in such capacity unless otherwise provided
in a written agreement pursuant to which such Indemnitee is indemnified.

 

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

 

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

 

F.                                      Interested
Transactions. An Indemnitee shall not be denied indemnification in whole or
in part under this Section 7.7 because the Indemnitee had an interest in
the transaction

 

34

 

with respect
to which the indemnification applies if the transaction was otherwise permitted
by the terms of this Agreement.

 

G.                                     Benefit.
The provisions of this Section 7.7 are for the benefit of the Indemnitees,
their employees, officers, directors, trustees, heirs, successors, assigns and
administrators and shall not be deemed to create any rights for the benefit of
any other Persons. Any amendment, modification or repeal of this
Section 7.7, or any provision hereof, shall be prospective only and shall
not in any way affect the limitation on the Partnership’s liability to any
Indemnitee under this Section 7.7 as in effect immediately prior to such
amendment, modification or repeal with respect to claims arising from or
related to matters occurring, in whole or in part, prior to such amendment,
modification or repeal, regardless of when such claims may arise or be
asserted.

 

H.                                    Indemnification
Payments Not Distributions. If and to the extent any payments to the
General Partner pursuant to this Section 7.7 constitute gross income to
the General Partner (as opposed to the repayment of advances made on behalf of
the Partnership), such amounts shall constitute guaranteed payments within the
meaning of Section 707(c) of the Code, shall be treated consistently
therewith by the Partnership and all Partners, and shall not be treated as
distributions for purposes of computing the Partners’ Capital Accounts.

 

I.                                         Exception
to Indemnification. Notwithstanding anything to the contrary in this
Agreement, the General Partner shall not be entitled to indemnification
hereunder for any loss, claim, damage, liability or expense for which the
General Partner is obligated to indemnify the Partnership under any other
agreement between the General Partner and the Partnership.

 

Section 7.8                                        Liability of the General Partner

 

A.                                   General.
Notwithstanding anything to the contrary set forth in this Agreement, the
General Partner (which for the purposes of this Section 7.8 shall include
the directors, trustees and officers of the General Partner) shall not be
liable for monetary or other damages to the Partnership, any Partners or any
Assignees for losses sustained, liabilities incurred or benefits not derived as
a result of errors in judgment or mistakes of fact or law or of any act or
omission unless the General Partner acted in bad faith and the act or omission
was material to the matter giving rise to the loss, liability or benefit not
derived.

 

B.                                     Obligation
to Consider Interests of General Partner Entity.  The Limited Partners expressly acknowledge that the General Partner,
in considering whether to dispose of any of the Partnership assets, shall take
into account the tax consequences to the General Partner Entity of any such
disposition and shall have no liability whatsoever to the Partnership or any
Limited Partner for decisions that are based upon or influenced by such tax
consequences.

 

C.                                     No
Obligation to Consider Separate Interests of Limited Partners or Shareholders.
The Limited Partners expressly acknowledge that the General Partner is acting
on behalf of the Partnership and the shareholders of the General Partner
Entity, 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 Assignees) in deciding whether to cause
the Partnership to take (or decline to take) any actions, and that the General
Partner shall not be liable for monetary or other damages for losses sustained,
liabilities incurred or benefits not

 

35

 

derived by
Limited Partners in connection with any decisions or actions made or taken or
declined to be made or taken, provided that the General Partner has acted
pursuant to its authority under this Agreement.

 

D.                                    Actions
of Agents. Subject to its obligations and duties as General Partner set
forth in Section 7.1.A, the General Partner may exercise any of the powers
granted to it by this Agreement and perform any of the duties imposed upon it
hereunder either directly or by or through its agents. The General Partner
shall not be responsible for any misconduct or negligence on the part of any
such agent appointed by the General Partner in good faith.

 

E.                                      Effect
of Amendment. Notwithstanding any other provision contained herein, any
amendment, modification or repeal of this Section 7.8 or any provision
hereof shall be prospective only and shall not in any way affect the
limitations on the General Partner’s liability to the Partnership and the
Limited Partners under this Section 7.8 as in effect immediately prior to
such amendment, modification or repeal with respect to claims arising from or
relating to matters occurring, in whole or in part, prior to such amendment,
modification or repeal, regardless of when such claims may arise or be asserted.

 

F.                                      Limitations
of Fiduciary Duty.  Sections 7.1.B,
7.1.E and this Section 7.8 and any other Section of this Agreement
limiting the liability of the General Partner and/or its trustees, directors
and officers shall constitute an express limitation of any duties, fiduciary or
otherwise, that they would owe the Partnership or the Limited Partners if such
duty would be imposed by any law, in equity or otherwise.

 

Section 7.9                                        Other Matters Concerning the General
Partner

 

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

 

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

 

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

 

D.                                    Actions
to Maintain REIT Status or Avoid Taxation of the General Partner Entity.
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

 

36

 

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

 

Section 7.10                                 Reliance By Third Parties

 

Notwithstanding anything to the
contrary in this Agreement, any Person dealing with the Partnership shall be
entitled to assume that the General Partner has full power and authority,
without consent or approval of any other Partner or Person, to encumber, sell
or otherwise use in any manner any and all assets of the Partnership, to enter
into any contracts on behalf of the Partnership and to take any and all actions
on behalf of the Partnership, and such Person shall be entitled to deal with
the General Partner as if the General Partner were the Partnership’s sole party
in interest, both legally and beneficially. Each Limited Partner hereby waives
any and all defenses or other remedies that may be available against such
Person to contest, negate or disaffirm any action of the General Partner in
connection with any such dealing, in each case except to the extent that such
action imposes, or purports to impose, liability on the Limited Partner. In no
event shall any Person dealing with the General Partner or its representatives
be obligated to ascertain that the terms of this Agreement have been complied
with or to inquire into the necessity or expedience of any act or action of the
General Partner or its representatives. Each and every certificate, document or
other instrument executed on behalf of the Partnership by the General Partner
or its representatives shall be conclusive evidence in favor of any and every
Person relying thereon or claiming thereunder that (i) at the time of the
execution and delivery of such certificate, document or instrument, this
Agreement was in full force and effect, (ii) the Person executing and
delivering such certificate, document or instrument was duly authorized and
empowered to do so for and on behalf of the Partnership, and (iii) such
certificate, document or instrument was duly executed and delivered in
accordance with the terms and provisions of this Agreement and is binding upon
the Partnership.

 

Section 7.11                                 Restrictions on General Partner’s
Authority

 

A.                                   Consent
Required. The General Partner may not take any action in contravention of
an express prohibition or limitation of this Agreement without the written
Consent of (i) all Partners adversely affected or (ii) such lower percentage of
the Partnership Interests held by Limited Partners as may be specifically
provided for under a provision of this Agreement or the Act.  The preceding sentence shall not apply to
any limitation or prohibition in this Agreement that expressly authorizes the
General Partner to take action (either in its discretion or in specified
circumstances) so long as the General Partner acts within the scope of such
authority.

 

B.                                     Sale
of All Assets of the Partnership. Except as provided in Article XIII,
the General Partner may not, directly or indirectly, cause the Partnership to
sell, exchange, transfer or otherwise dispose of all or substantially all of
the Partnership’s assets in a single transaction or a series of related
transactions (including by way of merger (including a triangular merger),
consolidation or other combination with any other Persons) without the Consent
of the Partners holding Partnership Interests representing more than fifty
percent (50%) of the Percentage

 

37

 

Interest of
the Class A Units, provided, however, that the foregoing limitation shall not
apply to any leases of all or substantially all of the Partnership’s assets
entered into by the Partnership in order to satisfy any REIT Requirements.

 

Section 7.12                                 Loans by Third Parties

 

The Partnership may incur Debt,
or enter into similar credit, guarantee, financing or refinancing arrangements
for any purpose (including, without limitation, in connection with any
acquisition of property and any borrowings from, or guarantees of Debt of the
General Partner or any of its Affiliates) with any Person upon such terms as
the General Partner determines appropriate.

 

ARTICLE VIII

RIGHTS AND OBLIGATIONS OF LIMITED PARTNERS

 

Section 8.1                                        Limitation of Liability

 

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

 

Section 8.2                                        Management of Business

 

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

 

Section 8.3                                        Outside Activities of Limited
Partners

 

Subject to Section 7.5
hereof, and subject to any agreements entered into pursuant to
Section 7.6.B hereof and to any other agreements entered into by a Limited
Partner or its Affiliates with the Partnership or a Subsidiary, any Limited
Partner (other than the General Partner) and any officer, director, employee,
agent, trustee, Affiliate or shareholder of any Limited Partner shall be
entitled to and may have business interests and engage in business activities
in addition to those relating to the Partnership, including business interests
and activities in direct or indirect competition with the Partnership. Neither
the Partnership nor any Partners shall have any rights by virtue of this
Agreement in any business ventures of any Limited Partner or Assignee. None of
the Limited Partners (other than the General Partner) or any other Person shall
have any rights by virtue of this Agreement or the partnership relationship
established hereby in any business ventures of any other Person (other than the
General Partner

 

38

 

to the extent
expressly provided herein), and no Person (other than the General Partner)
shall have any obligation pursuant to this Agreement to offer any interest in
any such business venture to the Partnership, any Limited Partner or any such
other Person, even if such opportunity is of a character which, if presented to
the Partnership, any Limited Partner or such other Person, could be taken by
such Person.

 

Section 8.4                                        Return of Capital

 

Except pursuant to the right of
redemption set forth in Section 8.6, no Limited Partner shall be entitled
to the withdrawal or return of its Capital Contribution, except to the extent
of distributions made pursuant to this Agreement or upon termination of the
Partnership as provided herein. No Limited Partner or Assignee shall have
priority over any other Limited Partner or Assignee either as to the return of
Capital Contributions (except as permitted by Section 4.2.A) or, except to
the extent provided by Exhibit C or as permitted by Sections 4.2.A, 5.1.B(i),
6.1.A and 6.1.B, or otherwise expressly provided in this Agreement, as to profits,
losses, distributions or credits.

 

Section 8.5                                        Rights of Limited Partners Relating
to the Partnership

 

A.                                   General.
In addition to other rights provided by this Agreement or by the Act, and
except as limited by Section 8.5.D, each Limited Partner shall have the
right, for a purpose reasonably related to such Limited Partner’s interest as a
limited partner in the Partnership, upon written demand with a statement of the
purpose of such demand and at such Limited Partner’s own expense:

 

(1)                                  to
obtain a copy of the most recent annual and quarterly reports filed with the
Securities and Exchange Commission by either the General Partner Entity or the
Partnership, if any, pursuant to the Exchange Act;

 

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

 

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

 

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

 

(5)                                  to
obtain true and full information regarding the amount of cash and a description
and statement of the agreed value of any other property or services contributed
by each Partner and which each Partner has agreed to contribute in the future,
and the date on which each Partner became a Partner; and

 

(6)                                  other
information regarding the affairs of the Partnership as is just and reasonable.

 

39

 

B.                                     Notice
of Conversion Factor. The Partnership shall notify each Limited Partner
upon request (i) of the then current Conversion Factor and (ii) of any changes
to the Conversion Factor.

 

C.                                     Notice
of Extraordinary Transaction of the General Partner Entity. The General
Partner Entity shall not make any extraordinary distributions of cash or
property to its shareholders or effect a merger (including, without limitation,
a triangular merger), consolidation or other combination with or into another
Person, a sale of all or substantially all of its assets or any other similar
extraordinary transaction without providing written notice to the Limited
Partners of its intention to make such distribution or effect such merger,
consolidation, combination, sale or other extraordinary transaction at least
twenty (20) Business Days prior to the record date to determine shareholders
eligible to receive such distribution or to vote upon the approval of such
merger, sale or other extraordinary transaction (or, if no such record date is
applicable, at least twenty (20) Business Days before consummation of such
merger, sale or other extraordinary transaction), which notice shall describe
in reasonable detail the action to be taken; provided, however, that the
General Partner, in its sole and absolute discretion, may shorten the required
notice period of not less than twenty (20) Business Days prior to the record
date to determine the shareholders eligible to vote upon a merger transaction
(but not any of the other transactions covered by this Section 8.5.C.) to a
period of not less than ten (10) calendar days (thereby continuing to afford
the holders of Partnership Units the opportunity to redeem Partnership Units
under Section 8.6 on or prior to the record date for the shareholder vote on
the merger transaction) so long as (i) the General Partner Entity will be the
surviving entity in such merger transaction, (ii) immediately following the
merger transaction, Persons who held voting securities of the General Partner
Entity immediately prior to such merger transaction will hold, solely by reason
of the ownership of voting securities of the General Partner Entity immediately
prior to the merger transaction, voting securities of the General Partner
Entity representing not less than fifty-one percent (51%) of the total combined
voting power of all outstanding voting securities of the General Partner Entity
after such merger, and (iii) in the event that in connection with such merger
transaction the Partnership will merge with another entity, the Partnership
will be the surviving entity in such merger. This provision for such notice
shall not be deemed (i) to permit any transaction that otherwise is prohibited
by this Agreement or requires a Consent of the Partners or (ii) to require a Consent
on the part of any one or more of the Limited Partners to a transaction that
does not otherwise require Consent under this Agreement. Each Limited Partner
agrees, as a condition to the receipt of the notice pursuant hereto, to keep
confidential the information set forth therein until such time as the General
Partner Entity has made public disclosure thereof and to use such information
during such period of confidentiality solely for purposes of determining
whether to exercise the Redemption Right; provided, however, that a Limited
Partner may disclose such information to its attorney, accountant and/or
financial advisor for purposes of obtaining advice with respect to such
exercise so long as such attorney, accountant and/or financial advisor agrees to
receive and hold such information subject to this confidentiality requirement.

 

D.                                    Confidentiality.
Notwithstanding any other provision of this Section 8.5, the General Partner
may keep confidential from the Limited Partners, for such period of time as the
General Partner determines in its sole and absolute discretion, any information
that (i) the General Partner reasonably believes to be in the nature of trade
secrets or other information the disclosure of which the General Partner in
good faith believes is not in the best interests of the

 

40

 

Partnership or
could damage the Partnership or its business or (ii) the Partnership is
required by law or by agreements with unaffiliated third parties to keep confidential,
provided that this Section 8.5.D shall not affect the notice requirements set
forth in Section 8.5.C above.

 

Section
8.6                                        Redemption
Right

 

A.                                   General.
(i) Subject to Section 8.6.C, at any time on or after one year following the
date of the initial issuance thereof (which, in the event of the transfer of a
Class A Unit or Class B Unit, shall be deemed to be the date that the Class A
Unit (or corresponding Class B Unit) or such Class B Unit, as the case may be,
was issued to the original recipient thereof for purposes of this Section 8.6),
the holder of a Partnership Unit (if other than the General Partner or the
General Partner Entity or any Subsidiary of either the General Partner or the
General Partner Entity) shall have the right (the “Redemption Right”) to
require the Partnership to redeem such Partnership Unit, with such redemption
to occur on the Specified Redemption Date and at a redemption price equal to
and in the form of the Cash Amount to be paid by the Partnership. Any such
Redemption Right shall be exercised pursuant to a Notice of Redemption
delivered to the Partnership (with a copy to the General Partner) by the holder
of the Partnership Units who is exercising the Redemption Right (the “Redeeming
Partner”). A Limited Partner may exercise the Redemption Right from time to
time, without limitation as to frequency, with respect to part or all of the
Partnership Units that it owns, as selected by the Limited Partner, provided
that a Limited Partner may not exercise the Redemption Right for less than one
thousand (1,000) Partnership Units of a particular class unless such Redeeming
Partner then holds less than one thousand (1,000) Partnership Units in that
class, in which event the Redeeming Partner must exercise the Redemption Right
for all of the Partnership Units held by such Redeeming Partner in that class,
and provided further that, with respect to a Limited Partner which is an
entity, such Limited Partner may exercise the Redemption Right for less than
one thousand (1,000) Partnership Units without regard to whether or not such
Limited Partner is exercising the Redemption Right for all of the Partnership
Units held by such Limited Partner as long as such Limited Partner is
exercising the Redemption Right on behalf of one or more of its equity owners
in respect of one hundred percent (100%) of such equity owners’ interests in
such Limited Partner. For purposes hereof, a Class A Unit issued upon
conversion of a Class B Unit shall be deemed to have been issued when the Class
B Unit was issued.

 

(ii)                                  The
Redeeming Partner shall have no right with respect to any Partnership Units so
redeemed to receive any distributions paid in respect of a Partnership Record
Date for distributions in respect of Partnership Units after the Specified
Redemption Date with respect to such Partnership Units.

 

(iii)                               The
Assignee of any Limited Partner may exercise the rights of such Limited Partner
pursuant to this Section 8.6, and such Limited Partner shall be deemed to have
assigned such rights to such Assignee and shall be bound by the exercise of
such rights by such Limited Partner’s Assignee. In connection with any exercise
of such rights by such Assignee on behalf of such Limited Partner, the Cash
Amount shall be paid by the Partnership directly to such Assignee and not to
such Limited Partner.

 

(iv)                              If
the General Partner Entity provides notice to the Limited Partners, pursuant to
Section 8.5.C hereof, the Redemption Right shall be exercisable, without regard
to

 

41

 

whether the
Partnership Units have been outstanding for any specified period, during the
period commencing on the date on which the General Partner Entity provides such
notice and ending on the record date to determine shareholders eligible to
receive such distribution or to vote upon the approval of such merger, sale or
other extraordinary transaction (or, if no such record date is applicable, at
least twenty (20) Business Days before the consummation of such merger, sale or
other extraordinary transaction). If this subparagraph (iv) applies, the
Specified Redemption Date is the date on which the Partnership and the General
Partner receive notice of exercise of the Redemption Right, rather than ten
(10) Business Days after receipt of the notice of redemption.

 

B.                                     General
Partner Assumption of Right. (i) If a Limited Partner has delivered a
Notice of Redemption, the General Partner Entity may, in its sole and absolute
discretion (subject to the limitations on ownership and transfer of Shares set
forth in the Declaration of Trust), elect to assume directly and satisfy a
Redemption Right.  If such election is
made by the General Partner Entity, the Partnership shall determine whether the
General Partner Entity shall pay the Redemption Amount in the form of the Cash
Amount or the Shares Amount.  The
Partnership’s decision regarding whether such payment shall be made in the form
of the Cash Amount or the Shares Amount shall be made by the General Partner,
in its capacity as the general partner of the Partnership and in its sole and
absolute discretion.  Payment of the
Redemption Amount in the form of Shares shall be in Shares registered for
resale under Section 12 of the Exchange Act and listed for trading on the
exchange or national market on which the Shares are Publicly Traded and the
issuance of Shares upon redemption shall be registered under the Securities Act
or, at the election of the General Partner Entity resale of the Shares issued
upon redemption shall be registered (so long as the Redeeming Partner provides
all information required for such registration), and, provided further that, if
the Shares are not Publicly Traded at the time a Redeeming Partner exercises
its Redemption Right, the Redemption Amount shall be paid only in the form of
the Cash Amount unless the Redeeming Partner, in its sole and absolute
discretion, consents to payment of the Redemption Amount in the form of the
Shares Amount), on the Specified Redemption Date, upon such payment the General
Partner Entity shall acquire the Partnership Units offered for redemption by
the Redeeming Partner and shall be treated for all purposes of this Agreement
as the owner of such Partnership Units. Unless the General Partner Entity, in
its sole and absolute discretion, shall exercise its right to assume directly
and satisfy the Redemption Right, the General Partner Entity shall not have any
obligation to the Redeeming Partner or to the Partnership with respect to the
Redeeming Partner’s exercise of the Redemption Right. If the General Partner
Entity shall exercise its right to assume directly and satisfy the Redemption
Right in the manner described in the first sentence of this Section 8.6B and
shall fully perform its obligations in connection therewith, the Partnership
shall have no right or obligation to pay any amount to the Redeeming Partner
with respect to such Redeeming Partner’s exercise of the Redemption Right, and
each of the Redeeming Partner, the Partnership and the General Partner Entity
shall, for federal income tax purposes, treat the transaction between the
General Partner Entity and the Redeeming Partner as a sale of the Redeeming
Partner’s Partnership Units to the General Partner Entity. Nothing contained in
this Section 8.6.B shall imply any right of the General Partner Entity to require
any Limited Partner to exercise the Redemption Right afforded to such Limited
Partner pursuant to Section 8.6.A.

 

(ii)                                  If
the General Partner Entity determines to pay the Redeeming Partner the
Redemption Amount in the form of Shares, the total number of Shares to be paid
to the Redeeming Partner in exchange for the Redeeming Partner’s Partnership
Units shall be the

 

42

 

applicable Shares Amount. If this amount is
not a whole number of Shares, the Redeeming Partner shall be paid (i) that
number of Shares which equals the nearest whole number less than such amount
plus (ii) an amount of cash which the General Partner Entity determines, in its
reasonable discretion, to represent the fair value of the remaining fractional
Share which would otherwise be payable to the Redeeming Partner.

 

(iii)                               Each
Redeeming Partner agrees to execute such documents as the General Partner
Entity may reasonably require in connection with the issuance of Shares upon
exercise of the Redemption Right.

 

C.                                     Exceptions
to Exercise of Redemption Right. Notwithstanding the provisions of Sections
8.6.A and 8.6.B, a Partner shall not be entitled to exercise the Redemption
Right pursuant to Section 8.6.A if (but only as long as) the delivery of Shares
to such Partner on the Specified Redemption Date would be (i) prohibited under
the restrictions on the ownership or transfer of Shares in the Declaration of
Trust (or, if the General Partner is not the General Partner Entity, the
organizational documents of the General Partner Entity) or (ii) prohibited
under applicable federal or state securities laws or regulations (in each case
regardless of whether the General Partner Entity would in fact assume and
satisfy the Redemption Right).

 

D.                                    No
Liens on Partnership Units Delivered for Redemption. Each Limited Partner
covenants and agrees with the General Partner that all Partnership Units
delivered for redemption shall be delivered to the Partnership or the General
Partner Entity, as the case may be, free and clear of all liens; and,
notwithstanding anything contained herein to the contrary, neither the General
Partner Entity nor the Partnership shall be under any obligation to acquire
Partnership Units which are or may be subject to any liens. Each Limited
Partner further agrees that, if any state or local property transfer tax is
payable as a result of the transfer of its Partnership Units to the Partnership
or the General Partner Entity, such Limited Partner shall assume and pay such
transfer tax.

 

E.                                      Additional
Partnership Interests; Modification of Holding Period. If the Partnership
issues Partnership Interests to any Additional Limited Partner pursuant to
Article IV, the General Partner shall make such revisions to this Section 8.6
as it determines are necessary to reflect the issuance of such Partnership
Interests (including setting forth any restrictions on the exercise of the
Redemption Right with respect to such Partnership Interests) which differ from
those set forth in this Agreement), provided that no such revisions shall
materially adversely affect the rights of any other Limited Partner to exercise
its Redemption Right without that Limited Partner’s prior written consent. In
addition, the General Partner may, with respect to any holder or holders of
Partnership Units, at any time and from time to time, as it shall determine in
its sole and absolute discretion, (i) reduce or waive the length of the period
prior to which such holder or holders may not exercise the Redemption Right or
(ii) reduce or waive the length of the period between the exercise of the
Redemption Right and the Specified Redemption Date.

 

43

 

ARTICLE IX

BOOKS, RECORDS, ACCOUNTING AND REPORTS

 

Section 9.1                                        Records
and Accounting

 

The General Partner shall keep
or cause to be kept at the principal office of the Partnership appropriate
books and records with respect to the Partnership’s business, including,
without limitation, all books and records necessary to provide to the Limited
Partners any information, lists and copies of documents required to be provided
pursuant to Section 9.3. Any records maintained by or on behalf of the
Partnership in the regular course of its business may be kept on, or be in the
form of, punch cards, magnetic tape, photographs, micrographics or any other
information storage device, provided that the records so maintained are
convertible into clearly legible written form within a reasonable period of
time. The books of the Partnership shall be maintained, for financial and tax
reporting purposes, on an accrual basis in accordance with generally accepted
accounting principles.

 

Section
9.2                                        Fiscal
Year

 

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

 

Section
9.3                                        Reports

 

A.                                   Annual
Reports. As soon as practicable, but in no event later than the date on
which the General Partner Entity mails its annual report to its shareholders,
the General Partner Entity shall cause to be mailed to each Limited Partner an
annual report, as of the close of the most recently ended Fiscal Year,
containing financial statements of the Partnership, or of the General Partner
Entity if such statements are prepared on a consolidated basis with the
Partnership, for such Fiscal Year, presented in accordance with generally
accepted accounting principles, such statements to be audited by a nationally
recognized firm of independent public accountants selected by the General
Partner Entity.

 

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

 

44

 

ARTICLE X

TAX MATTERS

 

Section 10.1                                 Preparation
of Tax Returns

 

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

 

Section
10.2                                 Tax
Elections

 

Except as otherwise provided
herein, the General Partner shall, in its sole and absolute discretion,
determine whether to make any available election pursuant to the Code
(including the election under Section 754 of the Code). The General Partner
shall have the right to seek to revoke any such election upon the General
Partner’s determination in its sole and absolute discretion that such
revocation is in the best interests of the Partners.

 

Section
10.3                                 Tax
Matters Partner

 

A.                                   General.
The General Partner shall be the “tax matters partner” of the Partnership for
federal income tax purposes. Pursuant to Section 6223(c)(3) of the Code, upon
receipt of notice from the IRS of the beginning of an administrative proceeding
with respect to the Partnership, the tax matters partner shall furnish the IRS
with the name, address, taxpayer identification number and profit interest of
each of the Limited Partners and any Assignees; provided, however, that such
information is provided to the Partnership by the Limited Partners.

 

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

 

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

 

(2)                                  if
a notice of a final administrative adjustment at the Partnership level of any
item required to be taken into account by a Partner for tax purposes (a “final
adjustment”) is mailed to the tax matters partner, to seek judicial review of
such

 

45

 

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

 

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

 

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

 

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

 

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

 

The taking of any action and
the incurring of any expense by the tax matters partner in connection with any
such proceeding, except to the extent required by law, is a matter in the sole
and absolute discretion of the tax matters partner and the provisions relating
to indemnification of the General Partner set forth in Section 7.7 shall be
fully applicable to the tax matters partner in its capacity as such.

 

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

 

Section 10.4                                 Organizational
Expenses

 

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

 

Section
10.5                                 Withholding

 

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

 

46

 

Limited Partner, which loan shall be repaid
by such Limited Partner within fifteen (15) days after notice from the General
Partner that such payment must be made unless (i) the Partnership withholds
such payment from a distribution which would otherwise be made to the Limited
Partner or (ii) the General Partner determines, in its sole and absolute
discretion, that such payment may be satisfied out of the available funds of
the Partnership which would, but for such payment, be distributed to the
Limited Partner. Any amounts withheld pursuant to the foregoing clauses (i) or
(ii) shall be treated as having been distributed to such Limited Partner. Each
Limited Partner hereby unconditionally and irrevocably grants to the
Partnership a security interest in such Limited Partner’s Partnership Interest
to secure such Limited Partner’s obligation to pay to the Partnership any
amounts required to be paid pursuant to this Section 10.5. If a Limited Partner
fails to pay any amounts owed to the Partnership pursuant to this Section 10.5
when due, the General Partner may, in its sole and absolute discretion, elect
to make the payment to the Partnership on behalf of such defaulting Limited
Partner, and in such event shall be deemed to have loaned such amount to such
defaulting Limited Partner and shall succeed to all rights and remedies of the
Partnership as against such defaulting Limited Partner (including, without
limitation, the right to receive distributions). Any amounts payable by a
Limited Partner hereunder shall bear interest at the base rate on corporate
loans at large United States money center commercial banks, as published from
time to time in The Wall Street Journal, plus four (4) percentage points (but not
higher than the maximum lawful rate that may be charged under the law) from the
date such amount is due (i.e., fifteen (15) days after demand) until such
amount is paid in full. Each Limited Partner shall take such actions as the
Partnership or the General Partner shall request to perfect or enforce the
security interest created hereunder.

 

ARTICLE XI

TRANSFERS AND WITHDRAWALS

 

Section
11.1                                 Transfer

 

A.                                   Definition.
The term “transfer,” when used in this Article XI with respect to a Partnership
Interest or a Partnership Unit, shall be deemed to refer to a transaction by
which the General Partner purports to assign all or any part of its General
Partnership Interest to another Person or by which a Limited Partner purports
to assign all or any part of its Limited Partnership Interest to another
Person, and includes a sale, assignment, gift, pledge, encumbrance,
hypothecation, mortgage, exchange or any other disposition by law or otherwise.
The term “transfer” when used in this Article XI does not include any redemption
or repurchase of Partnership Units by the Partnership from a Partner or
acquisition of Partnership Units from a Limited Partner by the General Partner
Entity pursuant to Section 8.6 or otherwise. No part of the interest of a
Limited Partner shall be subject to the claims of any creditor, any spouse for
alimony or support, or to legal process, and may not be voluntarily or
involuntarily alienated or encumbered except as may be specifically provided
for in this Agreement.

 

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

 

47

 

Section 11.2                                 Transfers
of Partnership Interests of General Partner

 

A.                                   General.  The General Partner may not transfer any of
its Partnership Interests except in connection with (i) a transaction permitted
under Section 11.2.B, (ii) any merger (including a triangular merger),
consolidation or other combination with or into another Person following the
consummation of which the equity holders of the surviving entity are
substantially identical to the shareholders of the General Partner Entity, or
(iii) as otherwise expressly permitted under this Agreement, nor shall the
General Partner withdraw as General Partner except in connection with a
transaction permitted under Section 11.2.B or any merger, consolidation, or
other combination permitted under clause (ii) of this Section 11.2.A.

 

B.                                     Specific
Transactions Prohibited. The General Partner Entity shall not engage in any
merger (including a triangular merger), consolidation or other combination with
or into another Person (other than any transaction permitted by Section
11.2.A), sale of all or substantially all of its assets or any
reclassification, recapitalization or change of outstanding Shares (other than
a change in par value, or from par value to no par value, or as a result of a
subdivision or combination as described in the definition of “Conversion
Factor”) (“Termination Transaction”), unless (i) the Termination Transaction
has been approved by the Consent of Partners holding Partnership Interests
representing more than fifty percent (50%) of the Percentage Interest of the
Class A Units, (ii) following such merger or other consolidation, substantially
all of the assets of the surviving entity consist of Partnership Units and
(iii) in connection with which all Partners either will receive, or will have
the right to receive, for each Unit an amount of cash, securities, or other
property equal to the product of the Conversion Factor and the greatest amount
of cash, securities or other property paid to a holder of Shares, if any,
corresponding to such Unit in consideration of one such Share at any time
during the period from and after the date on which the Termination Transaction
is consummated; provided that, if, in connection with the Termination Transaction,
a purchase, tender or exchange offer shall have been made to and accepted by
the holders of the percentage required for the approval of mergers under the
charter documents of the General Partner Entity, each holder of Partnership
Units shall receive, or shall have the right to receive without any right of
Consent set forth above in this subsection B, the greatest amount of cash,
securities, or other property which such holder would have received had it
exercised the Redemption Right and received Shares in exchange for its
Partnership Units immediately prior to the expiration of such purchase, tender
or exchange offer and had thereupon accepted such purchase, tender or exchange
offer. The General Partner shall not enter into an agreement or other arrangement
providing for or facilitating the creation of a General Partner Entity other
than the General Partner, unless the successor General Partner Entity executes
and delivers a counterpart to this Agreement in which such General Partner
Entity agrees to be fully bound by all of the terms and conditions contained
herein that are applicable to a General Partner Entity.

 

Section 11.3                                 Limited
Partners’ Rights to Transfer

 

A.                                   General.
Except to the extent expressly permitted in Sections 11.3.B and 11.3.C or in
connection with the exercise of a Redemption Right pursuant to Section 8.6, a
Limited Partner may not transfer all or portion of its Partnership Interest, or
any of such Limited Partner’s rights as a Limited Partner, without the prior
written consent of the General Partner, which consent may be withheld in the
General Partner’s sole and absolute discretion. Any transfer

 

48

 

otherwise permitted under Sections 11.3.B and
11.3.C shall be subject to the conditions set forth in Section 11.3.D, 11.3.E
and 11.3.F, and all permitted transfers shall be subject to Section 11.5.

 

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

 

C.                                     Permitted
Transfers. A Limited Partner may transfer, with or without the consent of
the General Partner, all or a portion of its Partnership Interest (i) in the
case of a Limited Partner who is an individual, to a member of his Immediate
Family, any trust formed for the benefit of himself and/or members of his
Immediate Family, or any partnership, limited liability company, joint venture,
corporation or other business entity comprised only of himself and/or members
of his Immediate Family and entities the ownership interests in which are owned
by or for the benefit of himself and/or members of his Immediate Family, (ii)
in the case of a Limited Partner which is a trust, to the beneficiaries of such
trust, (iii) in the case of a Limited Partner which is a partnership, limited
liability company, joint venture, corporation or other business entity to which
Units were transferred pursuant to clause (i) above, to its partners, owners or
stockholders, as the case may be, who are members of the Immediate Family of or
are actually the Person(s) who transferred Partnership Units to it pursuant to
clause (i) above, (iv) in the case of a Limited Partner which acquired
Partnership Units as of the date hereof and which is a partnership, limited
liability company, joint venture, corporation or other business entity, to its
partners, owners, stockholders or Affiliates thereof, as the case may be, or
the Persons owning the beneficial interests in any of its partners, owners or
stockholders or Affiliates thereof (it being understood that this clause (iv)
will apply to all of each Person’s Interests whether the Partnership Units
relating thereto were acquired on the date hereof or hereafter), (v) in the
case of a Limited Partner which is a partnership, limited liability company,
joint venture, corporation or other business entity other than any of the
foregoing described in clause (iii) or (iv), in accordance with the terms of
any agreement between such Limited Partner and the Partnership pursuant to
which such Partnership Interest was issued, (vi) pursuant to a gift or other
transfer without consideration, (vii) pursuant to applicable laws of descent or
distribution, (viii) to another Limited Partner and (ix) pursuant to a grant of
security interest or other encumbrance effectuated in a bona fide transaction
or as a result of the exercise of remedies related thereto, subject to the
provisions of Section 11.3.F hereof. A trust or other entity will be considered
formed “for the benefit” of a Partner’s Immediate Family even though some other
Person has a remainder interest under or with respect to such trust or other
entity.

 

D.                                    No
Transfers Violating Securities Laws. The General Partner may prohibit any
transfer of Partnership Units by a Limited Partner unless it receives a written
opinion of legal counsel (which opinion and counsel shall be reasonably
satisfactory to the Partnership) to such Limited Partner to the effect that
such transfer would not require filing of a registration statement under the
Securities Act or would not otherwise violate any federal or state securities
laws or regulations applicable to the Partnership or the Partnership Unit or,
at the option of the Partnership, an opinion of legal counsel to the
Partnership to the same effect.

 

49

 

E.                                      No
Transfers Affecting Tax Status of Partnership. No transfer of Partnership
Units by a Limited Partner (including a redemption or exchange pursuant to
Section 8.6) may be made to any Person if (i) in the opinion of legal counsel
for the Partnership, there is a significant risk that it would result in the
Partnership being treated as an association taxable as a corporation for
federal income tax purposes or would result in a termination of the Partnership
for federal income tax purposes (except as a result of the redemption or exchange
for Shares of all Partnership Units held by all Limited Partners other than the
General Partner or the General Partner Entity or any Subsidiary of the General
Partner or the General Partner Entity or pursuant to a transaction expressly
permitted under Section 7.11.B or Section 11.2), (ii) in the opinion of legal
counsel for the Partnership, there is a significant risk that it would
adversely affect the ability of the General Partner Entity to continue to
qualify as a REIT or would subject the General Partner Entity to any additional
taxes under Section 857 or Section 4981 of the Code or (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 (provided that this clause (iii) shall not be the basis for limiting
or restricting in any manner the exercise of the Redemption Right under Section
8.6 unless, and only to the extent that, outside tax counsel provides to the
General Partner an opinion to the effect that, in the absence of such
limitation or restriction, there is a significant risk that the Partnership
will be treated as a “publicly traded partnership” and, by reason thereof,
taxable as a corporation).

 

F.                                      No
Transfers to Holders of Nonrecourse Liabilities. No pledge or transfer of
any Partnership Units may be made to a lender to the Partnership or any Person
who is related (within the meaning of Section 1.752-4(b) of the Regulations) to
any lender to the Partnership whose loan constitutes a Nonrecourse Liability
unless (i) the General Partner is provided prior written notice thereof and
(ii) the lender enters into an arrangement with the Partnership and the General
Partner to exchange or redeem for the Redemption Amount any Partnership Units
in which a security interest is held simultaneously with the time at which such
lender would be deemed to be a partner in the Partnership for purposes of
allocating liabilities to such lender under Section 752 of the Code.

 

Section 11.4                                 Substituted
Limited Partners

 

A.                                   Consent
of General Partner. No Limited Partners shall have the right to substitute
a transferee as a Limited Partner in its place. The General Partner shall,
however, have the right to consent to the admission of a transferee of the
interest of a Limited Partner pursuant to this Section 11.4 as a Substituted
Limited Partner, which consent may be given or withheld by the General Partner
in its sole and absolute discretion. The General Partner’s failure or refusal
to permit a transferee of any such interests to become a Substituted Limited
Partner shall not give rise to any cause of action against the Partnership or
any Partner. The General Partner hereby grants its consent to the admission as
a Substituted Limited Partner to any bona fide financial institution that loans
money or otherwise extends credit to a holder of Partnership Units and
thereafter becomes the owner of such Partnership Units pursuant to the exercise
by such financial institution of its rights under a pledge of such Partnership
Units granted in connection with such loan or extension of credit.

 

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

 

50

 

subject to all the restrictions and
liabilities of a Limited Partner under this Agreement. The admission of any
transferee as a Substituted Limited Partner shall be conditioned upon the transferee
executing and delivering to the Partnership an acceptance of all the terms and
conditions of this Agreement (including, without limitation, the provisions of
Section 15.11) and such other documents or instruments as may be required to
effect the admission.

 

C.                                     Partner
Registry. Upon the admission of a Substituted Limited Partner, the General
Partner shall update the Partner Registry in the books and records of the
Partnership as it deems necessary to reflect such admission in the Partner
Registry.

 

Section
11.5                                 Assignees

 

If the General Partner, in its
sole and absolute discretion, does not consent to the admission of any
permitted transferee under Section 11.3 as a Substituted Limited Partner, as
described in Section 11.4, such transferee shall be considered an Assignee for
purposes of this Agreement. An Assignee shall be entitled to all the rights of
an assignee of a limited partnership interest under the Act, including the
right to receive distributions from the Partnership and the share of Net Income,
Net Losses, gain, loss and Recapture Income attributable to the Partnership
Units assigned to such transferee, and shall have the rights granted to the
Limited Partners under Section 8.6, but shall not be deemed to be a holder of
Partnership Units for any other purpose under this Agreement, and shall not be
entitled to vote such Partnership Units in any matter presented to the Limited
Partners for a vote (such Partnership Units being deemed to have been voted on
such matter in the same proportion as all other Partnership Units held by
Limited Partners are voted). If any such transferee desires to make a further
assignment of any such Partnership Units, such transferee shall be subject to
all the provisions of this Article XI to the same extent and in the same manner
as any Limited Partner desiring to make an assignment of Partnership Units.

 

Section
11.6                                 General
Provisions

 

A.                                   Withdrawal
of Limited Partner. No Limited Partner may withdraw from the Partnership
other than as a result of a permitted transfer of all of such Limited Partner’s
Partnership Units in accordance with this Article XI or pursuant to redemption
of all of its Partnership Units under Section 8.6.

 

B.                                     Termination
of Status as Limited Partner. Any Limited Partner who shall transfer all of
its Partnership Units in a transfer permitted pursuant to this Article XI or
pursuant to redemption of all of its Partnership Units under Section 8.6 shall
cease to be a Limited Partner.

 

C.                                     Timing
of Transfers. Transfers pursuant to this Article XI may only be made upon
three (3) Business Days prior notice, unless the General Partner otherwise
agrees.

 

D.                                    Allocations.
If any Partnership Interest is transferred during any quarterly segment of the
Partnership’s fiscal year in compliance with the provisions of this Article XI
or redeemed or transferred pursuant to Section 8.6, Net Income, Net Losses,
each item thereof and all other items attributable to such interest for such
fiscal year shall be divided and allocated between the transferor Partner and
the transferee Partner by taking into account their varying

 

51

 

interests during the fiscal year in
accordance with Section 706(d) of the Code, using the interim closing of the
books method (unless the General Partner, in its sole and absolute discretion,
elects to adopt a daily, weekly, or a monthly proration period, in which event
Net Income, Net Losses, each item thereof and all other items attributable to
such interest for such fiscal year shall be prorated based upon the applicable
method selected by the General Partner). Solely for purposes of making such
allocations, each of such items for the calendar month in which the transfer or
redemption occurs shall be allocated to the Person who is a Partner as of midnight
on the last day of said month. All distributions of Available Cash attributable
to any Partnership Unit with respect to which the Partnership Record Date is
before the date of such transfer, assignment or redemption shall be made to the
transferor Partner or the Redeeming Partner, as the case may be, and, in the
case of a transfer or assignment other than a redemption, all distributions of
Available Cash thereafter attributable to such Partnership Unit shall be made
to the transferee Partner.

 

E.                                      Additional
Restrictions. In addition to any other restrictions on transfer herein
contained, including without limitation the provisions of this Article XI and
Article VII, in no event may any transfer or assignment of a Partnership
Interest by any Partner (including pursuant to Section 8.6) be made without the
express consent of the General Partner, in its sole and absolute discretion,
(i) to any person or entity who lacks the legal right, power or capacity to own
a Partnership Interest; (ii) in violation of applicable law; (iii) of any
component portion of a Partnership Interest, such as the Capital Account, or
rights to distributions, separate and apart from all other components of a
Partnership Interest; (iv) if in the opinion of legal counsel to the Partnership,
there is a significant risk that such transfer would cause a termination of the
Partnership for federal or state income tax purposes (except as a result of the
redemption or exchange for Shares of all Partnership Units held by all Limited
Partners other than the General Partner, the General Partner Entity, or any
Subsidiary of either, or pursuant to a transaction expressly permitted under
Section 7.11.B or Section 11.2); (v) if in the opinion of counsel to the
Partnership, there is a significant risk that such transfer would cause the
Partnership to cease to be classified as a partnership for federal income tax
purposes (except as a result of the redemption or exchange for Shares of all
Units held by all Limited Partners other than the General Partner, the General
Partner Entity, or any Subsidiary of either, or pursuant to a transaction
expressly permitted under Section 7.11.B or Section 11.2); (vi) if such
transfer requires the registration of such Partnership Interest pursuant to any
applicable federal or state securities laws; (vii) if such transfer is
effectuated through an “established securities market” or a “secondary market
(or the substantial equivalent thereof)” within the meaning of Section 7704 of
the Code or such transfer causes the Partnership to become a “publicly traded
partnership,” as such term is defined in Section 469(k)(2) or Section 7704(b)
of the Code (provided that, this clause (vii) shall not be the basis for
limiting or restricting in any manner the exercise of the Redemption Right
under Section 8.6 unless, and only to the extent that, outside tax counsel
provides to the General Partner an opinion to the effect that, in the absence
of such limitation or restriction, there is a significant risk that the
Partnership will be treated as a “publicly traded partnership” and, by reason
thereof, taxable as a corporation); (viii) if such transfer subjects the
Partnership or the activities of the Partnership to regulation under the
Investment Company Act of 1940, the Investment Advisors Act of 1940 or ERISA,
each as amended; (ix) if such transfer could adversely affect the ability of
the General Partner Entity to fail to remain qualified as a REIT; or (x) if in
the opinion of legal counsel for the transferring Partner (which opinion and
counsel shall be reasonably satisfactory to the Partnership) or legal counsel
for the Partnership,

 

52

 

such transfer would cause the General Partner
Entity to fail to continue to qualify as a REIT or subject the General Partner
Entity to any additional taxes under Section 857 or Section 4981 of the Code.

 

F.                                      Avoidance
of “Publicly Traded Partnership” Status. The General Partner shall monitor
the transfers of interests in the Partnership to determine (i) if such interests
are being traded on an “established securities market” or a “secondary market
(or the substantial equivalent thereof)” within the meaning of Section 7704 of
the Code and (ii) whether additional transfers of interests would result in the
Partnership being unable to qualify for at least one of the “safe harbors” set
forth in Regulations Section 1.7704-1 (or such other guidance subsequently
published by the IRS setting forth safe harbors under which interests will not
be treated as “readily tradable on a secondary market (or the substantial
equivalent thereof)” within the meaning of Section 7704 of the Code) (the “Safe
Harbors”). The General Partner shall take all steps reasonably necessary or
appropriate to prevent any trading of interests or any recognition by the
Partnership of transfers made on such markets and, except as otherwise provided
herein, to insure that at least one of the Safe Harbors is met; provided,
however, that the foregoing shall not authorize the General Partner to limit or
restrict in any manner the right of any holder of a Partnership Unit to
exercise the Redemption Right in accordance with the terms of Section 8.6
unless, and only to the extent that, outside tax counsel provides to the
General Partner an opinion to the effect that, in the absence of such
limitation or restriction, there is a significant risk that the Partnership
will be treated as a “publicly traded partnership” and, by reason thereof,
taxable as a corporation.

 

ARTICLE
XII

ADMISSION OF PARTNERS

 

Section 12.1                                 Admission
of a Successor General Partner

 

A successor to all of the
General Partner’s General Partnership Interest pursuant to Section 11.2 who is
proposed to be admitted as a successor General Partner shall be admitted to the
Partnership as the General Partner, effective upon such transfer. Any such
successor shall carry on the business of the Partnership without dissolution.
In such case, the admission shall be subject to such successor General Partner
executing and delivering to the Partnership an acceptance of all of the terms
and conditions of this Agreement and such other documents or instruments as may
be required to effect the admission.

 

Section 12.2                                 Admission
of Additional Limited Partners

 

A.                                   General.
No Person shall be admitted as an Additional Limited Partner without the
consent of the General Partner, which consent shall be given or withheld in the
General Partner’s sole and absolute discretion. A Person who makes a Capital
Contribution to the Partnership in accordance with this Agreement or who exercises
an option to receive Partnership Units shall be admitted to the Partnership as
an Additional Limited Partner only with the consent of the General Partner and
only upon furnishing to the General Partner (i) evidence of acceptance in form
satisfactory to the General Partner of all of the terms and conditions of this
Agreement, including, without limitation, the power of attorney granted in
Section 15.11 and (ii) such other

 

53

 

documents or instruments as may be required
in the discretion of the General Partner to effect such Person’s admission as
an Additional Limited Partner. The admission of any Person as an Additional
Limited Partner shall become effective on the date upon which the name of such
Person is recorded on the books and records of the Partnership, following the
consent of the General Partner to such admission.

 

B.                                     Allocations
to Additional Limited Partners. If any Additional Limited Partner is
admitted to the Partnership on any day other than the first day of a Fiscal
Year, then Net Income, Net Losses, each item thereof and all other items
allocable among Partners and Assignees for such Fiscal Year shall be allocated
among such Additional Limited Partner and all other Partners and Assignees by
taking into account their varying interests during the Fiscal Year in
accordance with Section 706(d) of the Code, using the interim closing of the
books method (unless the General Partner, in its sole and absolute discretion,
elects to adopt a daily, weekly or monthly proration method, in which event Net
Income, Net Losses, and each item thereof would be prorated based upon the
applicable period selected by the General Partner). Solely for purposes of
making such allocations, each of such items for the calendar month in which an
admission of any Additional Limited Partner occurs shall be allocated among all
the Partners and Assignees including such Additional Limited Partner. All
distributions of Available Cash with respect to which the Partnership Record Date
is before the date of such admission shall be made solely to Partners and
Assignees other than the Additional Limited Partner, and all distributions of
Available Cash thereafter shall be made to all the Partners and Assignees
including such Additional Limited Partner.

 

Section 12.3                                 Amendment
of Agreement and Certificate of Limited Partnership

 

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

 

ARTICLE XIII

DISSOLUTION AND LIQUIDATION

 

Section 13.1                                 Dissolution

 

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

 

(i)                                     an
event of withdrawal of the General Partner (other than an event of bankruptcy),
unless within ninety (90) days after the withdrawal, the written Consent of the

 

54

 

Outside Limited Partners to continue the business of the Partnership
and to the appointment, effective as of the date of withdrawal, of a substitute
General Partner is obtained;

 

(ii)                                  through
December 31, 2054, an election to dissolve the Partnership made by the General
Partner with the Consent of Partners holding Partnership Interests representing
ninety percent (90%) of the Percentage Interest of the Class A Units;

 

(iii)                               an
election to dissolve the Partnership made by the General Partner, in its sole
and absolute discretion after December 31, 2054;

 

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

 

(v)                                 the
sale of all or substantially all of the assets and properties of the
Partnership for cash or for marketable securities; or

 

(vi)                              a
final and non-appealable judgment is entered by a court of competent
jurisdiction ruling that the General Partner is bankrupt or insolvent, or a
final and non-appealable order for relief is entered by a court with
appropriate jurisdiction against the General Partner, in each case under any
federal or state bankruptcy or insolvency laws as now or hereafter in effect,
unless prior to or at the time of the entry of such order or judgment, the
written Consent of the Outside Limited Partners is obtained to continue the
business of the Partnership and to the appointment, effective as of a date
prior to the date of such order or judgment, of a substitute General Partner.

 

Section
13.2                                 Winding
Up

 

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

 

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

 

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

 

55

 

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

 

(4)                                  Fourth,
to the holders of Partnership Interests that are entitled to any preference in
distribution upon liquidation in accordance with the rights of any such class
or series of Partnership Interests (and, within each such class or series, to
each holder thereof pro rata based on its Percentage Interest in such class);
and

 

(5)                                  The
balance, if any, to the Partners in accordance with their Capital Accounts,
after giving effect to all contributions, distributions, and allocations for
all periods.

 

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

 

B.                                     Deferred
Liquidation. Notwithstanding the provisions of Section 13.2.A which require
liquidation of the assets of the Partnership, but subject to the order of
priorities set forth therein, if prior to or upon dissolution of the
Partnership the Liquidator determines that an immediate sale of part or all of
the Partnership’s assets would be impractical or would cause undue loss to the
Partners, the Liquidator may, in its sole and absolute discretion, defer for a
reasonable time the liquidation of any assets except those necessary to satisfy
liabilities of the Partnership (including to those Partners as creditors) or
distribute to the Partners, in lieu of cash, as tenants in common and in
accordance with the provisions of Section 13.2.A, undivided interests in such
Partnership assets as the Liquidator deems not suitable for liquidation. Any
such distributions in kind shall be made only if, in the good faith judgment of
the Liquidator, such distributions in kind are in the best interest of the
Partners, and shall be subject to such conditions relating to the disposition
and management of such properties as the Liquidator deems reasonable and
equitable and to any agreements governing the operation of such properties at
such time. The Liquidator shall determine the fair market value of any property
distributed in kind using such reasonable method of valuation as it may adopt.

 

Section 13.3                                 Compliance
With Timing Requirements of Regulations; Restoration of Deficit Capital
Accounts

 

A.                                   Timing
of Distributions. If the Partnership is “liquidated” within the meaning of
Regulations Section 1.704-1(b)(2)(ii)(g), distributions shall be made under
this Article XIII to the General Partner and Limited Partners who have positive
Capital Accounts in compliance with Regulations Section
1.704-1(b)(2)(ii)(b)(2). In the discretion of the General Partner, a pro rata
portion of the distributions that would otherwise be made to the General
Partner and Limited Partners pursuant to this Article XIII may be: (A)
distributed to a trust established for the benefit of the General Partner and
Limited Partners for the purposes of liquidating Partnership assets, collecting
amounts owed to the Partnership and paying any contingent or unforeseen
liabilities or obligations of the Partnership or of the General Partner arising
out of or in connection with the Partnership (in which case the assets of any
such trust shall be distributed to the General Partner and Limited Partners
from time to time, in the reasonable discretion of the General Partner, in the
same proportions as the amount distributed to such trust by the Partnership
would otherwise have been distributed to the General Partner and Limited
Partners pursuant to this Agreement); or (B)

 

56

 

withheld to provide a reasonable reserve for
Partnership liabilities (contingent or otherwise) and to reflect the unrealized
portion of any installment obligations owed to the Partnership; provided that
such withheld amounts shall be distributed to the General Partner and Limited
Partners as soon as practicable.

 

B.                                     Restoration
of Deficit Capital Accounts Upon Liquidation of the Partnership. If any
Partner has a deficit balance in its Capital Account (after giving effect to
all contributions, distributions and allocations for all taxable years,
including the year during which such liquidation occurs), such Partner shall
have no obligation to make any contribution to the capital of the Partnership
with respect to such deficit, and such deficit shall not be considered a debt
owed to the Partnership or to any other Person for any purpose whatsoever,
except as otherwise set forth in this Section 13.3.B, or as otherwise expressly
agreed in writing by the affected Partner and the Partnership after the date
hereof.  Notwithstanding the foregoing,
(i) if the General Partner has a deficit balance in its Capital Account (after
giving effect to all contributions, distributions, and allocations for all
Partnership Years or portions thereof, including the year during which such
liquidation occurs), the General Partner shall contribute to the capital of the
Partnership the amount necessary to restore such deficit balance to zero in
compliance with Regulations Section 1.704-1(b)(2)(ii)(b)(3);
(ii) if a DRO Partner has a deficit balance in its Capital Account (after
giving effect to all contributions, distributions, and allocations for all
Partnership Years or portions thereof, including the year during which such
liquidation occurs), such DRO Partner shall be obligated to make a contribution
to the Partnership with respect to any such deficit balance in such DRO
Partner’s Capital Account upon a liquidation of the Partnership in an amount
equal to the lesser of such deficit balance or such DRO Partner’s DRO Amount;
and (iii) the first sentence of this Section 13.3.B shall not apply
with respect to any other Partner to the extent, but only to such extent, that
such Partner previously has agreed in writing, with the consent of the General
Partner, to undertake an express obligation to restore all or any portion of a
deficit that may exist in its Capital Account upon a liquidation of the
Partnership.  No Limited Partner shall
have any right to become a DRO Partner, to increase its DRO Amount, or
otherwise agree to restore any portion of any deficit that may exist in its
Capital Account without the express written consent of the General Partner, in
its sole and absolute discretion.  Any
contribution required of a Partner under this Section 13.3.B. shall be
made on or before the later of (i) the end of the Partnership Year in
which the interest is liquidated or (ii) the ninetieth (90th) day
following the date of such liquidation. 
The proceeds of any contribution to the Partnership made by a DRO
Partner with respect to a deficit in such DRO Partner’s Capital Account balance
shall be treated as a Capital Contribution by such DRO Partner and the proceeds
thereof shall be treated as assets of the Partnership to be applied as set
forth in Section 13.2.A.

 

C.                                     Restoration
of Deficit Capital Accounts Upon a Liquidation of a Partner’s Interest by
Transfer. If a DRO Partner’s interest in the Partnership is “liquidated”
within the meaning of Regulations Section 1.704-1(b)(2)(ii)(g) (other than in
connection with a liquidation of the Partnership) which term shall include a
redemption by the Partnership of such DRO Partner’s interest upon exercise of
the Redemption Right, and such DRO Partner is designated on Exhibit E as Part
II DRO Partner, such DRO Partner shall be required to contribute cash to the
Partnership equal to the lesser of (i) the amount required to increase its
Capital Account balance as of such date to zero, or (ii) such DRO Partner’s DRO
Amount. For this purpose, (i) the DRO Partner’s deficit Capital Account balance
shall be determined by taking into account all

 

57

 

contributions, distributions, and allocations
for the portion of the Fiscal Year ending on the date of the liquidation or
redemption, and (ii) solely for purposes of determining such DRO Partner’s
Capital Account balance, the General Partner shall redetermine the Carrying
Value of the Partnership’s assets on such date based upon the principles set
forth in Sections 1.D.(3) and (4) of Exhibit B hereto, and shall take into
account the DRO Partner’s allocable share of any Unrealized Gain or Unrealized
Loss resulting from such redetermination in determining the balance of its Capital
Account. The amount of any payment required hereunder shall be due and payable
within the time period specified in the second to last sentence of Section
13.3.B.

 

D.                                    Effect
of the Death of a DRO Partner. After the death of a DRO Partner who is an
individual, the executor of the estate of such DRO Partner may elect to reduce
(or eliminate) the DRO Amount of such DRO Partner. Such elections may be made
by such executor by delivering to the General Partner within two hundred and
seventy (270) days of the death of such Limited Partner, a written notice
setting forth the maximum deficit balance in its Capital Account that such
executor agrees to restore under this Section 13.3, if any. If such executor
does not make a timely election pursuant to this Section 13.3 (whether or not
the balance in the applicable Capital Account is negative at such time), then
the DRO Partner’s estate (and the beneficiaries thereof who receive
distributions of Partnership Interests therefrom) shall be deemed a DRO Partner
with a DRO Amount in the same amount as the deceased DRO Partner. Any DRO
Partner which itself is a partnership for federal income tax purposes may
likewise elect, after the date of its partner’s death to reduce (or eliminate)
its DRO Amount by delivering a similar notice to the General Partner within the
time period specified above, and in the absence of any such notice the DRO
Amount of such DRO Partner shall not be reduced to reflect the death of any of
its partners.

 

Section 13.4                                 Rights
of Limited Partners

 

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

 

Section 13.5                                 Notice
of Dissolution

 

If a Liquidating Event occurs
or an event occurs that would, but for provisions of an election or objection
by one or more Partners pursuant to Section 13.1, result in a dissolution of
the Partnership, the General Partner shall, within thirty (30) days thereafter,
provide written notice thereof to each of the Partners and to all other parties
with whom the Partnership regularly conducts business (as determined in the
discretion of the General Partner).

 

Section 13.6                                 Cancellation
of Certificate of Limited Partnership

 

Upon the completion of the
liquidation of the Partnership cash and property as provided in Section 13.2,
the Partnership shall be terminated and the Certificate of Limited Partnership
and all qualifications of the Partnership as a foreign limited partnership in
jurisdictions other than

 

58

 

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

 

Section 13.7                                 Reasonable
Time for Winding Up

 

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

 

Section
13.8                                 Waiver
of Partition

 

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

 

Section 13.9                                 Liability
Of Liquidator

 

The Liquidator shall be
indemnified and held harmless by the Partnership in the same manner and to the
same degree as an Indemnitee may be indemnified pursuant to Section 7.7.

 

ARTICLE
XIV

AMENDMENT OF PARTNERSHIP AGREEMENT; MEETINGS

 

Section
14.1                                 Amendments

 

A.                                   General.
Amendments to this Agreement may be proposed by the General Partner or by any
Limited Partner holding Partnership Interests representing twenty-five percent
(25%) or more of the Percentage Interest of the Class A Units. Following such
proposal (except an amendment governed by Section 14.1.B), the General Partner
shall submit any proposed amendment to the Limited Partners. The General
Partner shall seek the written Consent of the Partners as set forth in this
Section 14.1 on the proposed amendment or shall call a meeting to vote thereon
and to transact any other business that it may deem appropriate. For purposes
of obtaining a written Consent, the General Partner may require a response
within a reasonable specified time, but not less than fifteen (15) days, and
failure to respond in such time period shall constitute a vote in favor of the
recommendation of the General Partner. A proposed amendment shall be adopted
and be effective as an amendment hereto if it is approved by the General
Partner and, except as provided in Section 14.1.B, 14.1.C or 14.1.D, it
receives the Consent of the Partners holding Partnership Interests representing
more than fifty percent (50%) of the Percentage Interest of the Class A Units.

 

B.                                     Amendments
Not Requiring Limited Partner Approval. Notwithstanding anything in this
Section 14.1 to the contrary, the General Partner shall have the power, without
the consent of the Limited Partners, to amend this Agreement as may be required
to facilitate or implement any of the following purposes:

 

59

 

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

 

(2)                                  to
reflect the admission, substitution, termination, or withdrawal of Partners in
accordance with this Agreement (which may be affected through the replacement
of the Partner Registry with an amended Partner Registry);

 

(3)                                  to
set forth the designations, rights, powers, duties, and preferences of the
holders of any additional Partnership Interests issued pursuant to Article IV;

 

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

 

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

 

The General Partner shall
notify the Limited Partners in writing when any action under this Section
14.1.B is taken in the next regular communication to the Limited Partners or
within 90 days of the date thereof, whichever is earlier.

 

C.                                     Amendments
Requiring Limited Partner Approval (Excluding the General Partner).
Notwithstanding Section 14.1.A, without the Consent of the Outside Limited
Partners, the General Partner shall not amend Section 4.2.A, Section 7.1.A
(second sentence only), Section 7.5, Section 7.6, Section 7.8, Section 7.11.B,
Section 11.2, Section 13.1 (other than Section 13.1(ii) which can be amended
only with a Consent of Partners holding Partnership Interests representing 90%
or more of the Percentage Interest of the Class A Units (including Partnership
Units held by the General Partner)), the last sentence of Section 11.4.A
(provided that no such amendment shall in any event adversely affect the rights
of any lender who made a loan or who extended credit and received in connection
therewith a pledge of Partnership Units prior to the date such amendment is
adopted unless, and only to the extent such lender consents thereto), this
Section 14.1.C or Section 14.2.

 

D.                                    Other
Amendments Requiring Certain Limited Partner Approval. Notwithstanding
Section 14.1.A or Section 14.1.C, this Agreement shall not be amended with
respect to any Partner adversely affected without the Consent of such Partner
adversely affected, or any Assignee who is a bona fide financial institution
that loans money or otherwise extends credit to a holder of Partnership Units,
adversely affected if such amendment would (i) convert such Limited Partner’s
interest in the Partnership into a general partner’s interest, (ii) modify the
limited liability of such Limited Partner, (iii) amend Section 7.11.A, (iv)
amend Article V or Article VI (except as permitted pursuant to Sections 4.2,
5.4, 6.2 and 14.1(B)(3)), (v) amend Section 8.6 or any defined terms set forth
in Article I that relate to the Redemption Right (except

 

60

 

as permitted in Section 8.6.E), or (vi) amend
Sections 11.3 or 11.5, or add any additional restrictions to Section 11.6.E or
amend Section 14.1.B(4) or this Section 14.1.D.

 

E.                                      Amendment
and Restatement of Partner Registry Not an Amendment.  Notwithstanding anything in this Article XIV
or elsewhere in this Agreement to the contrary, any amendment and restatement
of the Partner Registry by the General Partner to reflect events or changes
otherwise authorized or permitted by this Agreement shall not be deemed an
amendment of this Agreement and may be done at any time and from time to time,
as determined by the General Partner without the Consent of the Limited
Partners and without any notice requirement.

 

Section 14.2                                 Meetings
of the Partners

 

A.                                   General.
Meetings of the Partners may be called by the General Partner and shall be
called upon the receipt by the General Partner of a written request by Limited
Partners holding Partnership Interests representing twenty-five percent (25%)
or more of the Percentage Interest of the Class A Units. The call shall state
the nature of the business to be transacted. Notice of any such meeting shall
be given to all Partners not less than seven (7) days nor more than thirty (30)
days prior to the date of such meeting. Partners may vote in person or by proxy
at such meeting. Whenever the vote or Consent of Partners is permitted or
required under this Agreement, such vote or Consent may be given at a meeting
of Partners or may be given in accordance with the procedure prescribed in
Section 14.1.A. Except as otherwise expressly provided in this Agreement,
the Consent of holders of Partnership Interests representing a majority of the
Percentage Interests of the Class A Units shall control.

 

B.                                     Actions
Without a Meeting. Except as otherwise expressly provided by this
Agreement, any action required or permitted to be taken at a meeting of the
Partners may be taken without a meeting if a written consent setting forth the
action so taken is signed by Partners holding Partnership Interests
representing more than fifty percent (50%) (or such other percentage as is
expressly required by this Agreement) of the Percentage Interest of the Class A
Units. Such consent may be in one instrument or in several instruments, and
shall have the same force and effect as a vote of Partners. Such consent shall
be filed with the General Partner. An action so taken shall be deemed to have
been taken at a meeting held on the date on which written consents from the
Partners holding the required Percentage Interest of the Class A Units have
been filed with the General Partner.

 

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

 

D.                                    Conduct
of Meeting. Each meeting of Partners shall be conducted by the General
Partner or such other Person as the General Partner may appoint pursuant to
such rules for the conduct of the meeting as the General Partner or such other
Person deem appropriate.

 

61

 

ARTICLE XV

GENERAL PROVISIONS

 

Section
15.1                                 Addresses
and Notice

 

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

 

Section
15.2                                 Titles
and Captions

 

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

 

Section
15.3                                 Pronouns
And Plurals

 

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

 

Section
15.4                                 Further
Action

 

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

 

Section
15.5                                 Binding
Effect

 

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

 

Section
15.6                                 Creditors

 

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

 

Section
15.7                                 Waiver

 

No failure by any party to
insist upon the strict performance of any covenant, duty, agreement or
condition of this Agreement or to exercise any right or remedy consequent upon
a

 

62

 

breach thereof shall constitute waiver of any
such breach or any other covenant, duty, agreement or condition.

 

Section
15.8                                 Counterparts

 

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

 

Section
15.9                                 Applicable
Law

 

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

 

Section 15.10                          Invalidity
Of Provisions

 

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

 

Section
15.11                          Power Of
Attorney

 

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

 

(1)                                  execute,
swear to, acknowledge, deliver, file and record in the appropriate public
offices (a) all certificates, documents and other instruments (including,
without limitation, this Agreement and the Certificate of Limited Partnership
and all amendments or restatements thereof) that the General Partner or any
Liquidator deems appropriate or necessary to form, qualify or continue the
existence or qualification of the Partnership as a limited partnership (or a
partnership in which the limited partners have limited liability) in the State
of Delaware and in all other jurisdictions in which the Partnership may conduct
business or own property, (b) all instruments that the General Partner or any
Liquidator deem appropriate or necessary to reflect any amendment, change, modification
or restatement of this Agreement in accordance with its terms, (c) all
conveyances and other instruments or documents that the General Partner or any
Liquidator deems appropriate or necessary to reflect the dissolution and
liquidation of the Partnership pursuant to the terms of this Agreement,
including, without limitation, a certificate of cancellation, (d) all
instruments relating to the admission, withdrawal, removal or substitution of
any Partner pursuant to, or other events described in, Article XI, XII or XIII
hereof or the Capital Contribution of any

 

63

 

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

 

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

 

Nothing contained in this
Section 15.11 shall be construed as authorizing the General Partner or any
Liquidator to amend this Agreement except in accordance with Article XIV hereof
or as may be otherwise expressly provided for in this Agreement.

 

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

 

Section
15.12                          Entire
Agreement

 

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

 

Section 15.13                          No
Rights As Shareholders

 

Nothing contained in this
Agreement shall be construed as conferring upon the holders of the Partnership
Units any rights whatsoever as shareholders of the General Partner, including,
without limitation, any right to receive dividends or other distributions made
to shareholders of

 

64

 

the General Partner or to vote or to consent
or receive notice as shareholders in respect to any meeting of shareholders for
the election of trustees of the General Partner or any other matter.

 

Section 15.14                          Limitation
To Preserve REIT Status

 

To the extent that any amount
paid or credited to the General Partner or any of its officers, trustees,
employees or agents pursuant to Section 7.4 or Section 7.7 would constitute
gross income to the General Partner for purposes of Section 856(c)(2) or
856(c)(3) of the Code (a “General Partner Payment”) then, notwithstanding any
other provision of this Agreement, the amount of such General Partner Payment
for any fiscal year shall not exceed the lesser of:

 

(i)                                     an
amount equal to the excess, if any, of (a) 4% of the General Partner’s total
gross income (within the meaning of Section 856(c)(3) of the Code but not
including the amount of any General Partner Payments) for the fiscal year which
is described in subsections (A) though (H) of Section 856(c)(2) of the Code
over (b) the amount of gross income (within the meaning of Section 856(c)(2) of
the Code) derived by the General Partner from sources other than those
described in subsections (A) through (H) of Section 856(c)(2) of the Code (but
not including the amount of any General Partner Payments); or

 

(ii)                                  an
amount equal to the excess, if any of (a) 24% of the General Partner’s total
gross income (but not including the amount of any General Partner Payments) for
the fiscal year which is described in subsections (A) through (I) of Section
856(c)(3) of the Code over (b) the amount of gross income (within the meaning
of Section 856(c)(3) of the Code but not including the amount of any General
Partner Payments) derived by the General Partner from sources other than those
described in subsections (A) through (I) of Section 856(c)(3) of the Code;
provided, however, that General Partner Payments in excess of the amounts set
forth in subparagraphs (i) and (ii) above may be made if the General Partner,
as a condition precedent, obtains an opinion of tax counsel that the receipt of
such excess amounts would not adversely affect the General Partner’s ability to
qualify as a REIT. To the extent General Partner Payments may not be made in a
year due to the foregoing limitations, such General Partner Payments shall
carry over and be treated as arising in the following year, provided, however,
that such amounts shall not carry over for more than five years, and if not
paid within such five year period, shall expire; provided further, that (i) as
General Partner Payments are made, such payments shall be applied first to
carry over amounts outstanding, if any, and (ii) with respect to carry over
amounts for more than one Fiscal Year, such payments shall be applied to the
earliest Fiscal Year first.

 

65

 

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

 

	
   

  	
  GENERAL
  PARTNER:

  
	
   

  	
   

  
	
   

  	
  KITE REALTY
  GROUP TRUST

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ JOHN A.
  KITE

  	
   

  
	
   

  	
   

  
	
   

  	
  Name: John
  A. Kite

  
	
   

  	
   

  
	
   

  	
  Title:
  President and Chief Executive Officer

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  ORGANIZATIONAL
  LIMITED PARTNER:

  
	
   

  	
   

  
	
   

  	
    /s/ ALVIN E. KITE, JR.

  	
   

  
	
   

  	
  Alvin E.
  Kite, Jr.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  LIMITED
  PARTNERS:

  
	
   

  	
   

  
	
   

  	
  By:

  	
  Kite Realty
  Group Trust,

  as Attorney-in-Fact for the

  Limited Partners

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Name:

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Title:

  	
   

  	
   

  
								

 

66

 

	
   

  	
  For purposes
  of Section 8.6 hereof:

  
	
   

  	
   

  
	
   

  	
  KITE REALTY
  GROUP TRUST

  
	
   

  	
   

  
	
   

  	
  By:

  	
    /s/
  JOHN A. KITE

  	
   

  
	
   

  	
   

  
	
   

  	
  Name: John
  A. Kite

  
	
   

  	
   

  
	
   

  	
  Title:
  President and Chief Executive Officer

  

 

67

 

EXHIBIT
A

 

FORM OF PARTNER REGISTRY

 

	
   

  	
   

  	
  CLASS A AND CLASS B UNITS

  	
   

  
	
  Name And Address Of Partner

  	
   

  	
  Partnership

  Units

  	
   

  	
  Initial

  Capital

  Account

  	
   

  	
  Percentage

  Interest (1)

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  GENERAL PARTNER:

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Kite Realty
  Group Trust

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  LIMITED PARTNERS:

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  TOTAL CLASS
  A AND CLASS B UNITS

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  100.00000

  	
  %

  

 

 

NOTES:

 

(1) For
purposes of this calculation, the Class A Units and Class B Units are treated
as one class.

 

A-1

 

EXHIBIT
B

 

CAPITAL ACCOUNT MAINTENANCE

 

1.                                      Capital
Accounts of the Partners

 

A.                                   The
Partnership shall maintain for each Partner a separate Capital Account in
accordance with the rules of Regulations Section l.704-l(b)(2)(iv). Such Capital
Account shall be increased by (i) the amount of all Capital Contributions and
any other deemed contributions made by such Partner to the Partnership pursuant
to this Agreement and (ii) all items of Partnership income and gain (including
income and gain exempt from tax) computed in accordance with Section 1.B hereof
and allocated to such Partner pursuant to Section 6.1 of the Agreement and
Exhibit C thereof, and decreased by (x) the amount of cash or Agreed Value of
all actual and deemed distributions of cash or property made to such Partner
pursuant to this Agreement and (y) all items of Partnership deduction and loss
computed in accordance with Section 1.B hereof and allocated to such Partner
pursuant to Section 6.1 of the Agreement and Exhibit C thereof.

 

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

 

(1)                                  Except
as otherwise provided in Regulations Section 1.704-1(b)(2)(iv)(m), the
computation of all items of income, gain, loss and deduction shall be made
without regard to any election under Section 754 of the Code which may be made
by the Partnership, provided that the amounts of any adjustments to the
adjusted bases of the assets of the Partnership made pursuant to Section 734 of
the Code as a result of the distribution of property by the Partnership to a
Partner (to the extent that such adjustments have not previously been reflected
in the Partners’ Capital Accounts) shall be reflected in the Capital Accounts
of the Partners in the manner and subject to the limitations prescribed in
Regulations Section l.704-1(b)(2)(iv)(m)(4).

 

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

 

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

 

B-1

 

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

 

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

 

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

 

C.                                     A
transferee (including any Assignee) of a Partnership Unit shall succeed to a
pro rata portion of the Capital Account of the transferor.

 

D.                                    (1)
Consistent with the provisions of Regulations Section 1.704-1(b)(2)(iv)(f), and
as provided in Section 1.D(2), the Carrying Values of all Partnership assets
shall be adjusted upward or downward to reflect any Unrealized Gain or
Unrealized Loss attributable to such Partnership property, as of the times of
the adjustments provided in Section 1.D(2) hereof, as if such Unrealized Gain
or Unrealized Loss had been recognized on an actual sale of each such property
and allocated pursuant to Section 6.1 of the Agreement.

 

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

 

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

 

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

 

E.                                      The
provisions of the Agreement (including this Exhibit B and the other Exhibits to
the Agreement) relating to the maintenance of Capital Accounts are intended to
comply with

 

B-2

 

Regulations Section 1.704-1(b), and shall be
interpreted and applied in a manner consistent with such Regulations. In the
event the General Partner shall determine that it is prudent to modify the
manner in which the Capital Accounts, or any debits or credits thereto (including,
without limitation, debits or credits relating to liabilities which are secured
by contributed or distributed property or which are assumed by the Partnership,
the General Partner, or the Limited Partners) are computed in order to comply
with such Regulations, the General Partner may make such modification without
regard to Article XIV of the Agreement, provided that it is not likely to have
a material effect on the amounts distributable to any Person pursuant to
Article XIII of the Agreement upon the dissolution of the Partnership. The
General Partner also shall (i) make any adjustments that are necessary or
appropriate to maintain equality between the Capital Accounts of the Partners
and the amount of Partnership capital reflected on the Partnership’s balance
sheet, as computed for book purposes, in accordance with Regulations Section
l.704-l(b)(2)(iv)(q), and (ii) make any appropriate modifications in the event
unanticipated events might otherwise cause this Agreement not to comply with
Regulations Section l.704-1(b).

 

2.                                      No
Interest

 

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

 

3.                                      No
Withdrawal

 

No Partner shall be entitled to
withdraw any part of its Capital Contribution or Capital Account or to receive
any distribution from the Partnership, except as provided in Articles IV, V,
VII and XIII of the Agreement.

 

B-3

 

EXHIBIT
C

 

SPECIAL ALLOCATION RULES

 

1.                                      Special
Allocation Rules.

 

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

 

A.                                   Minimum
Gain Chargeback. Notwithstanding the provisions of Section 6.1 of the
Agreement or any other provisions of this Exhibit C, if there is a net decrease
in Partnership Minimum Gain during any Fiscal Year, each Partner shall be
specially allocated items of Partnership income and gain for such year (and, if
necessary, subsequent years) in an amount equal to such Partner’s share of the
net decrease in Partnership Minimum Gain, as determined under Regulations
Section 1.704-2(g). Allocations pursuant to the previous sentence shall be made
in proportion to the respective amounts required to be allocated to each Partner
pursuant thereto. The items to be so allocated shall be determined in
accordance with Regulations Section 1.704-2(f)(6). This Section 1.A is intended
to comply with the minimum gain chargeback requirements in Regulations Section
1.704-2(f) and for purposes of this Section 1.A only, each Partner’s Adjusted
Capital Account Deficit shall be determined prior to any other allocations
pursuant to Section 6.1 of this Agreement with respect to such Fiscal Year and
without regard to any decrease in Partner Minimum Gain during such Fiscal Year.

 

B.                                     Partner
Minimum Gain Chargeback. Notwithstanding any other provision of Section 6.1
of this Agreement or any other provisions of this Exhibit C (except Section 1.A
hereof), if there is a net decrease in Partner Minimum Gain attributable to a
Partner Nonrecourse Debt during any Fiscal Year, each Partner who has a share
of the Partner Minimum Gain attributable to such Partner Nonrecourse Debt,
determined in accordance with Regulations Section 1.704-2(i)(5), shall be specially
allocated items of Partnership income and gain for such year (and, if
necessary, subsequent years) in an amount equal to such Partner’s share of the
net decrease in Partner Minimum Gain attributable to such Partner Nonrecourse
Debt, determined in accordance with Regulations Section 1.704-2(i)(5).
Allocations pursuant to the previous sentence shall be made in proportion to
the respective amounts required to be allocated to each General Partner and
Limited Partner pursuant thereto. The items to be so allocated shall be
determined in accordance with Regulations Section 1.704-2(i)(4). This Section
1.B is intended to comply with the minimum gain chargeback requirement in such
Section of the Regulations and shall be interpreted consistently therewith. Solely
for purposes of this Section 1.B, each Partner’s Adjusted Capital Account
Deficit shall be determined prior to any other allocations pursuant to Section
6.1 of the Agreement or this Exhibit with respect to such Fiscal Year, other
than allocations pursuant to Section 1.A hereof.

 

C.                                     Qualified
Income Offset. In the event any Partner unexpectedly receives any
adjustments, allocations or distributions described in Regulations Sections
1.704-l(b)(2)(ii)(d)(4), l.704-1(b)(2)(ii)(d)(5), or 1.704-l(b)(2)(ii)(d)(6),
and after giving effect to the allocations required under Sections 1.A and 1.B
hereof with respect to such Fiscal Year, such Partner has an Adjusted Capital
Account Deficit, items of Partnership income and gain (consisting of a pro rata
portion of each item of Partnership income, including gross income and gain for
the Fiscal Year)

 

C-1

 

shall be specifically allocated to such
Partner in an amount and manner sufficient to eliminate, to the extent required
by the Regulations, its Adjusted Capital Account Deficit created by such
adjustments, allocations or distributions as quickly as possible. This Section
1.C is intended to constitute a “qualified income offset” under Regulations
Section 1.704-1(b)(2)(ii)(d) and shall be interpreted consistently therewith.

 

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

 

E.                                      Nonrecourse
Deductions. Except as may otherwise be expressly provided by the General
Partner pursuant to Section 4.2 with respect to other classes of Partnership
Units, Nonrecourse Deductions for any Fiscal Year shall be allocated only to
the Partners holding Class A Units and Class B Units in accordance with their
respective Percentage Interests. If the General Partner determines in its good
faith discretion that the Partnership’s Nonrecourse Deductions must be
allocated in a different ratio to satisfy the safe harbor requirements of the
Regulations promulgated under Section 704(b) of the Code, the General Partner
is authorized, upon notice to the Limited Partners, to revise the prescribed
ratio for such Fiscal Year to the numerically closest ratio which would satisfy
such requirements.

 

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

 

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

 

2.                                      Allocations
for Tax Purposes

 

A.                                   Except
as otherwise provided in this Section 2, for federal income tax purposes, each
item of income, gain, loss and deduction shall be allocated among the Partners
in the same manner as its correlative item of “book” income, gain, loss or
deduction is allocated pursuant to Section 6.1 of the Agreement and Section 1
of this Exhibit C.

 

C-2

 

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

 

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

 

(b)                                 any
item of Residual Gain or Residual Loss attributable to a Contributed Property
shall be allocated among the Partners in the same manner as its correlative
item of “book” gain or loss is allocated pursuant to Section 6.1 of the
Agreement and Section 1 of this Exhibit C.

 

(2)                                  (a)                                  In
the case of an Adjusted Property, such items shall

 

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

 

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

 

(b)                                 any
item of Residual Gain or Residual Loss attributable to an Adjusted Property
shall be allocated among the Partners in the same manner its correlative item
of “book” gain or loss is allocated pursuant to Section 6.1 of the Agreement
and Section 1 of this Exhibit C.

 

(3)                                  all
other items of income, gain, loss and deduction shall be allocated among the
Partners the same manner as their correlative item of “book” gain or loss is
allocated pursuant to Section 6.1 of the Agreement and Section 1 of this
Exhibit C.

 

C.                                     To
the extent Regulations promulgated pursuant to Section 704(c) of the Code
permit a Partnership to utilize alternative methods to eliminate the
disparities between the Carrying Value of property and its adjusted basis, the
General Partner shall, subject to any agreements between the Partnership and a
Partner, have the authority to elect the method to be used by the Partnership
and such election shall be binding on all Partners.

 

C-3

 

EXHIBIT
D

 

NOTICE OF REDEMPTION

 

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

 

	
  Dated:

  	
   

  	
   

  	
  Name of
  Limited Partner:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  (Signature
  of Limited Partner)

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  (Street
  Address)

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  (City)

  	
  (State)

  	
  (Zip Code)

  
	
   

  	
   

  
	
   

  	
  Signature
  Guaranteed by:

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  
	
  IF SHARES
  ARE TO BE ISSUED, ISSUE TO:

  	
   

  
	
   

  	
   

  
	
  Name:

  	
   

  	
   

  	
   

  
	
   

  
	
  Social
  Security or tax identifying number:

  	
   

  	
   

  
										

 

D-1

 

EXHIBIT E

 

FORM OF DRO REGISTRY

 

	
  PART I DRO
  PARTNERS

  	
   

  	
  DRO AMOUNT

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  PART II DRO
  PARTNERS

  	
   

  	
   

  

 

D-1

 

LIMITED PARTNER ACCEPTANCE

 

This
Limited Partner Acceptance to the Amended and Restated Agreement of Limited
Partnership of Kite Realty Group, L.P. dated as of August 16, 2004 (the
“Acceptance”), which Acceptance is incorporated into that certain Amended and
Restated Agreement of Limited Partnership of Kite Realty Group, L.P. dated as
of August 16, 2004 (the “Partnership Agreement”), is executed and delivered
by the undersigned.  As of the date
hereof, the undersigned, designated as an Additional Limited Partner, is
admitted as a Limited Partner of the Partnership, and by said undersigned’s
execution and delivery hereof, said undersigned agrees to be bound by the terms
and provisions of the Partnership Agreement, including the power of attorney
set forth in Section 15.11 of the Partnership Agreement.  The number of Class A Units issued as of the
date hereof to the undersigned designated as an Additional Limited Partner is
shown opposite such Additional Limited Partner’s signature below.  All terms used herein and not otherwise
defined shall have the meanings given them in the Partnership Agreement.

 

This
Acceptance may be executed in two or more counterparts, each of which shall be
deemed an original but all of which collectively shall constitute one and the
same document.

 

Dated:  August 16, 2004

 

 

	
   

  	
  GENERAL PARTNER:

  
	
   

  	
   

  	
   

  
	
   

  	
  KITE
  REALTY GROUP TRUST

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  JOHN A. KITE

  	
   

  
	
   

  	
  Name:

  	
  John
  A. Kite

  	
   

  
	
   

  	
  Title:

  	
  President
  and Chief Executive Officer

  
	
   

  	
   

  	
   

  
	
   

  	
  ADDITIONAL LIMITED PARTNER:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  ALVIN E. KITE, JR.

  	
   

  
	
   

  	
  Name:

  	
  Alvin
  E. Kite, Jr.

  	
   

  
	
  Number
  of

  	
  Title:

  	
   

  	
   

  
	
  Class
  A Units:

  	
  Tax
  Id #:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  2,793,564

  	
   

  	
   

  	
   

  
										

 

 

LIMITED PARTNER ACCEPTANCE

 

This
Limited Partner Acceptance to the Amended and Restated Agreement of Limited
Partnership of Kite Realty Group, L.P. dated as of August 16, 2004 (the
“Acceptance”), which Acceptance is incorporated into that certain Amended and
Restated Agreement of Limited Partnership of Kite Realty Group, L.P. dated as
of August 16, 2004 (the “Partnership Agreement”), is executed and
delivered by the undersigned.  As of the
date hereof, the undersigned, designated as an Additional Limited Partner, is
admitted as a Limited Partner of the Partnership, and by said undersigned’s
execution and delivery hereof, said undersigned agrees to be bound by the terms
and provisions of the Partnership Agreement, including the power of attorney
set forth in Section 15.11 of the Partnership Agreement.  The number of Class A Units issued as of the
date hereof to the undersigned designated as an Additional Limited Partner is
shown opposite such Additional Limited Partner’s signature below.  All terms used herein and not otherwise defined
shall have the meanings given them in the Partnership Agreement.

 

This
Acceptance may be executed in two or more counterparts, each of which shall be
deemed an original but all of which collectively shall constitute one and the
same document.

 

Dated:  August 16, 2004

 

 

	
   

  	
  GENERAL PARTNER:

  
	
   

  	
   

  	
   

  
	
   

  	
  KITE
  REALTY GROUP TRUST

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  ALVIN E. KITE, JR.

  	
   

  
	
   

  	
  Name:

  	
  Alvin
  E. Kite, Jr.

  	
   

  
	
   

  	
  Title:

  	
  Chairman

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  ADDITIONAL LIMITED PARTNER:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  JOHN A. KITE

  	
   

  
	
   

  	
  Name:

  	
  John
  A. Kite

  	
   

  
	
  Number
  of

  	
  Title:

  	
   

  	
   

  
	
  Class
  A Units:

  	
  Tax
  Id #:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  1,843,895

  	
   

  	
   

  	
   

  
									

 

 

LIMITED PARTNER ACCEPTANCE

 

This
Limited Partner Acceptance to the Amended and Restated Agreement of Limited
Partnership of Kite Realty Group, L.P. dated as of August 16, 2004 (the
“Acceptance”), which Acceptance is incorporated into that certain Amended and
Restated Agreement of Limited Partnership of Kite Realty Group, L.P. dated as
of August 16, 2004 (the “Partnership Agreement”), is executed and
delivered by the undersigned.  As of the
date hereof, the undersigned, designated as an Additional Limited Partner, is
admitted as a Limited Partner of the Partnership, and by said undersigned’s
execution and delivery hereof, said undersigned agrees to be bound by the terms
and provisions of the Partnership Agreement, including the power of attorney set
forth in Section 15.11 of the Partnership Agreement.  The number of Class A Units issued as of the
date hereof to the undersigned designated as an Additional Limited Partner is
shown opposite such Additional Limited Partner’s signature below.  All terms used herein and not otherwise
defined shall have the meanings given them in the Partnership Agreement.

 

This
Acceptance may be executed in two or more counterparts, each of which shall be
deemed an original but all of which collectively shall constitute one and the
same document.

 

Dated:  August 16, 2004

 

 

	
   

  	
  GENERAL PARTNER:

  
	
   

  	
   

  	
   

  
	
   

  	
  KITE
  REALTY GROUP TRUST

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  THOMAS K. McGOWAN

  	
   

  
	
   

  	
  Name:

  	
  Thomas
  K. McGowan

  	
   

  
	
   

  	
  Title:

  	
  Executive
  Vice President

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  ADDITIONAL LIMITED PARTNER:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  PAUL W. KITE

  	
   

  
	
   

  	
  Name:

  	
  Paul
  W. Kite

  	
   

  
	
  Number
  of

  	
  Title:

  	
   

  	
   

  
	
  Class
  A Units:

  	
  Tax
  Id #:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  1,845,714

  	
   

  	
   

  	
   

  
									

 

 

LIMITED PARTNER ACCEPTANCE

 

This
Limited Partner Acceptance to the Amended and Restated Agreement of Limited
Partnership of Kite Realty Group, L.P. dated as of August 16, 2004 (the
“Acceptance”), which Acceptance is incorporated into that certain Amended and
Restated Agreement of Limited Partnership of Kite Realty Group, L.P. dated as
of August 16, 2004 (the “Partnership Agreement”), is executed and delivered
by the undersigned.  As of the date
hereof, the undersigned, designated as an Additional Limited Partner, is
admitted as a Limited Partner of the Partnership, and by said undersigned’s
execution and delivery hereof, said undersigned agrees to be bound by the terms
and provisions of the Partnership Agreement, including the power of attorney
set forth in Section 15.11 of the Partnership Agreement.  The number of Class A Units issued as of the
date hereof to the undersigned designated as an Additional Limited Partner is
shown opposite such Additional Limited Partner’s signature below.  All terms used herein and not otherwise
defined shall have the meanings given them in the Partnership Agreement.

 

This
Acceptance may be executed in two or more counterparts, each of which shall be
deemed an original but all of which collectively shall constitute one and the
same document.

 

Dated:  August 16, 2004

 

 

	
   

  	
  GENERAL PARTNER:

  
	
   

  	
   

  	
   

  
	
   

  	
  KITE
  REALTY GROUP TRUST

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  JOHN A. KITE

  	
   

  
	
   

  	
  Name:

  	
  John
  A. Kite

  	
   

  
	
   

  	
  Title:

  	
  President and Chief Executive Officer

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  ADDITIONAL LIMITED PARTNER:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ THOMAS K. McGOWAN

  	
   

  
	
   

  	
  Name:

  	
  Thomas K. McGowan

  	
   

  
	
  Number
  of

  	
  Title:

  	
   

  	
   

  
	
  Class
  A Units:

  	
  Tax
  Id #:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  1,418,018

  	
   

  	
   

  	
   

  
										

 

 

LIMITED PARTNER ACCEPTANCE

 

This
Limited Partner Acceptance to the Amended and Restated Agreement of Limited
Partnership of Kite Realty Group, L.P. dated as of August 16, 2004 (the
“Acceptance”), which Acceptance is incorporated into that certain Amended and
Restated Agreement of Limited Partnership of Kite Realty Group, L.P. dated as
of August 16, 2004 (the “Partnership Agreement”), is executed and
delivered by the undersigned.  As of the
date hereof, the undersigned, designated as an Additional Limited Partner, is
admitted as a Limited Partner of the Partnership, and by said undersigned’s
execution and delivery hereof, said undersigned agrees to be bound by the terms
and provisions of the Partnership Agreement, including the power of attorney
set forth in Section 15.11 of the Partnership Agreement.  The number of Class A Units issued as of the
date hereof to the undersigned designated as an Additional Limited Partner is
shown opposite such Additional Limited Partner’s signature below.  All terms used herein and not otherwise
defined shall have the meanings given them in the Partnership Agreement.

 

This
Acceptance may be executed in two or more counterparts, each of which shall be
deemed an original but all of which collectively shall constitute one and the
same document.

 

Dated:  August 16, 2004

 

 

	
   

  	
  GENERAL PARTNER:

  
	
   

  	
   

  	
   

  
	
   

  	
  KITE
  REALTY GROUP TRUST

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  JOHN A. KITE

  	
   

  
	
   

  	
  Name:

  	
  John
  A. Kite

  	
   

  
	
   

  	
  Title:

  	
  President and Chief Executive Officer

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  ADDITIONAL LIMITED PARTNER:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ DANIEL R. SINK

  	
   

  
	
   

  	
  Name:

  	
  Daniel R. Sink

  	
   

  
	
  Number
  of

  	
  Title:

  	
   

  	
   

  
	
  Class
  A Units:

  	
  Tax
  Id #:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  61,538

  	
   

  	
   

  	
   

  
												

 

 

LIMITED PARTNER ACCEPTANCE

 

This
Limited Partner Acceptance to the Amended and Restated Agreement of Limited
Partnership of Kite Realty Group, L.P. dated as of August 16, 2004 (the
“Acceptance”), which Acceptance is incorporated into that certain Amended and
Restated Agreement of Limited Partnership of Kite Realty Group, L.P. dated as
of August 16, 2004 (the “Partnership Agreement”), is executed and
delivered by the undersigned.  As of the
date hereof, the undersigned, designated as an Additional Limited Partner, is
admitted as a Limited Partner of the Partnership, and by said undersigned’s
execution and delivery hereof, said undersigned agrees to be bound by the terms
and provisions of the Partnership Agreement, including the power of attorney
set forth in Section 15.11 of the Partnership Agreement.  The number of Class A Units issued as of the
date hereof to the undersigned designated as an Additional Limited Partner is
shown opposite such Additional Limited Partner’s signature below.  All terms used herein and not otherwise
defined shall have the meanings given them in the Partnership Agreement.

 

This
Acceptance may be executed in two or more counterparts, each of which shall be
deemed an original but all of which collectively shall constitute one and the
same document.

 

Dated:  August 16, 2004

 

 

	
   

  	
  GENERAL PARTNER:

  
	
   

  	
   

  	
   

  
	
   

  	
  KITE
  REALTY GROUP TRUST

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  JOHN A. KITE

  	
   

  
	
   

  	
  Name:

  	
  John
  A. Kite

  	
   

  
	
   

  	
  Title:

  	
  President and Chief Executive Officer

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  ADDITIONAL LIMITED PARTNER:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ GEORGE F. McMANNIS, IV

  	
   

  
	
   

  	
  Name:

  	
  George F. McMannis, IV

  	
   

  
	
  Number
  of

  	
  Title:

  	
   

  	
   

  
	
  Class
  A Units:

  	
  Tax
  Id #:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  53,846

  	
   

  	
   

  	
   

  
											

 

 

LIMITED PARTNER ACCEPTANCE

 

This
Limited Partner Acceptance to the Amended and Restated Agreement of Limited Partnership
of Kite Realty Group, L.P. dated as of August 16, 2004 (the “Acceptance”),
which Acceptance is incorporated into that certain Amended and Restated
Agreement of Limited Partnership of Kite Realty Group, L.P. dated as of
August 16, 2004 (the “Partnership Agreement”), is executed and delivered
by the undersigned.  As of the date
hereof, the undersigned, designated as an Additional Limited Partner, is
admitted as a Limited Partner of the Partnership, and by said undersigned’s
execution and delivery hereof, said undersigned agrees to be bound by the terms
and provisions of the Partnership Agreement, including the power of attorney
set forth in Section 15.11 of the Partnership Agreement.  The number of Class A Units issued as of the
date hereof to the undersigned designated as an Additional Limited Partner is
shown opposite such Additional Limited Partner’s signature below.  All terms used herein and not otherwise
defined shall have the meanings given them in the Partnership Agreement.

 

This
Acceptance may be executed in two or more counterparts, each of which shall be
deemed an original but all of which collectively shall constitute one and the
same document.

 

Dated:  August 16, 2004

 

 

	
   

  	
  GENERAL PARTNER:

  
	
   

  	
   

  	
   

  
	
   

  	
  KITE
  REALTY GROUP TRUST

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  THOMAS K. McGOWAN

  	
   

  
	
   

  	
  Name:

  	
  Thomas
  K. McGowan

  	
   

  
	
   

  	
  Title:

  	
  Executive Vice President

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  ADDITIONAL LIMITED PARTNER:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ MARK S. JENKINS

  	
   

  
	
   

  	
  Name:

  	
  Mark S. Jenkins

  	
   

  
	
  Number
  of

  	
  Title:

  	
   

  	
   

  
	
  Class
  A Units:

  	
  Tax
  Id #:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  30,769

  	
   

  	
   

  	
   

  
											

 

 

LIMITED PARTNER ACCEPTANCE

 

This
Limited Partner Acceptance to the Amended and Restated Agreement of Limited
Partnership of Kite Realty Group, L.P. dated as of August 16, 2004 (the
“Acceptance”), which Acceptance is incorporated into that certain Amended and
Restated Agreement of Limited Partnership of Kite Realty Group, L.P. dated as
of August 16, 2004 (the “Partnership Agreement”), is executed and
delivered by the undersigned.  As of the
date hereof, the undersigned, designated as an Additional Limited Partner, is
admitted as a Limited Partner of the Partnership, and by said undersigned’s
execution and delivery hereof, said undersigned agrees to be bound by the terms
and provisions of the Partnership Agreement, including the power of attorney
set forth in Section 15.11 of the Partnership Agreement.  The number of Class A Units issued as of the
date hereof to the undersigned designated as an Additional Limited Partner is
shown opposite such Additional Limited Partner’s signature below.  All terms used herein and not otherwise defined
shall have the meanings given them in the Partnership Agreement.

 

This
Acceptance may be executed in two or more counterparts, each of which shall be
deemed an original but all of which collectively shall constitute one and the
same document.

 

Dated:  August 16, 2004

 

 

	
   

  	
  GENERAL PARTNER:

  
	
   

  	
   

  	
   

  
	
   

  	
  KITE
  REALTY GROUP TRUST

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  JOHN A. KITE

  	
   

  
	
   

  	
  Name:

  	
  John
  A. Kite

  	
   

  
	
   

  	
  Title:

  	
  President and Chief Executive Officer

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  ADDITIONAL LIMITED PARTNER:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ DAVID GRIEVE

  	
   

  
	
   

  	
  Name:

  	
  David
  Grieve

  	
   

  
	
  Number
  of

  	
  Title:

  	
   

  	
   

  
	
  Class
  A Units:

  	
  Tax
  Id #:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  76,923

  	
   

  	
   

  	
   

  
										

 

 

LIMITED PARTNER ACCEPTANCE

 

This
Limited Partner Acceptance to the Amended and Restated Agreement of Limited
Partnership of Kite Realty Group, L.P. dated as of August 16, 2004 (the “Acceptance”),
which Acceptance is incorporated into that certain Amended and Restated
Agreement of Limited Partnership of Kite Realty Group, L.P. dated as of
August 16, 2004 (the “Partnership Agreement”), is executed and delivered
by the undersigned.  As of the date
hereof, the undersigned, designated as an Additional Limited Partner, is
admitted as a Limited Partner of the Partnership, and by said undersigned’s
execution and delivery hereof, said undersigned agrees to be bound by the terms
and provisions of the Partnership Agreement, including the power of attorney
set forth in Section 15.11 of the Partnership Agreement.  The number of Class A Units issued as of the
date hereof to the undersigned designated as an Additional Limited Partner is
shown opposite such Additional Limited Partner’s signature below.  All terms used herein and not otherwise
defined shall have the meanings given them in the Partnership Agreement.

 

This
Acceptance may be executed in two or more counterparts, each of which shall be
deemed an original but all of which collectively shall constitute one and the
same document.

 

Dated:  August 16, 2004

 

 

	
   

  	
  GENERAL PARTNER:

  
	
   

  	
   

  	
   

  
	
   

  	
  KITE
  REALTY GROUP TRUST

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  JOHN A. KITE

  	
   

  
	
   

  	
  Name:

  	
  John
  A. Kite

  	
   

  
	
   

  	
  Title:

  	
  President and Chief Executive Officer

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  ADDITIONAL LIMITED PARTNER:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ C. KENNETH KITE

  	
   

  
	
   

  	
  Name:

  	
  C. Kenneth Kite by Martin V. Shrader

  	
   

  
	
  Number
  of

  	
  Title:

  	
  His Attorney-In-Fact

  	
   

  
	
  Class
  A Units:

  	
  Tax
  Id #:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  157,615Exhibit 10.2

 

AGREEMENT AND PLAN OF MERGER

 

THIS AGREEMENT AND PLAN
OF MERGER (this “Agreement”) is entered into as of April 5, 2004 by and
among Kite Realty Group Trust, a Maryland real estate investment trust (the
“REIT”), KRG Construction, LLC, an Indiana limited liability company (the
“Limited Liability Company”) and Kite Construction, Inc, an Indiana corporation
(the “Acquired Company”).

 

WHEREAS, the REIT and
Kite Realty Group, L.P., a Delaware limited partnership, of which the REIT is
the indirect general partner (“Kite Realty”), are considering engaging in
various related transactions pursuant to which, among other things, (i) Kite
Realty would acquire interests in various entities that own or lease real
estate properties in which certain affiliated persons of the Acquired Company
have interests; (ii) the Limited Liability Company, of which the REIT is the
sole member, would acquire interests in certain service businesses currently
conducted by the Acquired Company and certain affiliated persons, and (iii) the
REIT would effect an initial public offering of its common shares and
contribute the proceeds therefrom for a like number of units of partnership
interest in Kite Realty (the “Kite IPO,” and together with the other
transactions described above, the “Kite IPO Transactions”);

 

WHEREAS, the authorized
capital stock of the Acquired Company consists of 1000 shares of common stock,
without par value (the “Common Stock”), of which 122 shares are issued and
outstanding;

 

WHEREAS, the shareholders
listed on Schedule 1 attached hereto (the “Shareholders”) own 100%
of the issued and outstanding Common Stock of the Acquired Company;

 

WHEREAS, the REIT is the
sole member of the Limited Liability Company;

 

WHEREAS, the parties
hereto have determined it to be in their respective best interests, on the
terms and conditions hereinafter set forth, that the Acquired Company be merged
with and into the Limited Liability Company, with the Limited Liability Company
surviving (the “Merger”) and the Shareholders receiving common shares of
beneficial interest, par value $0.01 per share, of the REIT (“REIT Common
Shares”);

 

WHEREAS, for federal
income tax purposes, it is intended that the Merger shall qualify as a
reorganization under Section 368(a) of the Internal Revenue Code of 1986,
as amended (the “Code”), and that this Agreement shall constitute a plan of
reorganization under Section 368(a) of the Code;

 

WHEREAS, the Board of
Directors of the Acquired Company has approved and adopted this Agreement and
the Merger, on the terms and subject to the conditions set forth in this
Agreement, proposed and recommended that the shareholders of the Acquired
Company approve and adopt this Agreement and the Merger and submitted this
Agreement and the Merger for approval and adoption by the shareholders of the
Acquired Company;

 

 

WHEREAS, concurrently
with the execution and delivery of this Agreement, the Shareholders are
approving and adopting this Agreement and the Merger, on the terms and subject
to the conditions set forth in this Agreement, including the other transactions
contemplated hereby, by unanimous written consent of the Shareholders dated as
of the date hereof (the “Shareholder Consent”), in accordance with the
applicable provisions of the Indiana Business Corporation Law (the “IBCL”) and
the articles of incorporation and by-laws of the Acquired Company; and

 

WHEREAS, the REIT, as the
sole member of the Limited Liability Company, has approved and adopted this
Agreement and the Merger, on the terms and subject to the conditions set forth
in this Agreement, including the other transactions contemplated hereby in
accordance with the applicable provisions of the Indiana Business Flexibility
Act (the “IBFA”) and the operating agreement of the Limited Liability Company.

 

NOW, THEREFORE, for good
and valuable consideration and in consideration of the foregoing and of the
representations, warranties, covenants and agreements hereinafter set forth,
the parties, each intending to be legally bound hereby, agree as follows:

 

ARTICLE I:                                  PLAN
OF MERGER

 

1.1                                 Merger.
Upon the terms and subject to the conditions hereof, and in accordance with the
provisions of Section 23-18-7 et. seq. of the IBFA and
Section 23-1-40 et. seq. of the IBCL, the Acquired Company shall be merged
with and into the Limited Liability Company at the Effective Time (as defined
below).  The Limited Liability Company
shall be the surviving entity resulting from the Merger (the “Surviving
Entity”), and the separate existence of the Acquired Company will cease.  The Surviving Entity shall continue its
existence as a limited liability company under the laws of the State of
Indiana, and its name shall be changed to “Kite Construction, LLC.”

 

1.2                                 Closing.
Subject to the terms and conditions of this Agreement, the closing hereunder
(the “Closing”) shall occur, at the election of the REIT, (i) one business day
prior to the closing of the Kite IPO, (ii) concurrently with the closing of the
Kite IPO, or (iii) one business day following the closing of the Kite IPO,
which date the Limited Liability Company shall designate in writing to the
Acquired Company at least five business days prior to such date, at the same
location as the closing of the Kite IPO, provided that the conditions for the
Closing as set forth in Article IV hereof shall have occurred (or have
been waived by the party that benefits from such conditions), and this
Agreement shall not have been terminated pursuant to Article VI
hereof.  The date on which the Closing
occurs is referred to herein as the “Closing Date.”

 

1.3                                 Effective
Time. If all the conditions to the Merger set forth in Article IV
shall have been satisfied or waived in accordance herewith and this Agreement
shall not have been terminated as provided in Article VI, following the
Closing, the parties hereto shall, at such time as they deem advisable, cause
articles of merger (the “Articles of Merger”) to be filed with the Secretary of
State of the State of Indiana in accordance with Section 23-1-40-5 and
other applicable provisions of the IBCL and the applicable provisions

 

2

 

of the IBFA. The Merger
shall become effective on the filing of the Articles of Merger with the
Secretary of State of the State of Indiana, or such other time specified in the
Articles of Merger (the “Effective Time”).

 

1.4                                 Operating
Agreement. The operating agreement of the Limited Liability Company in
effect immediately prior to the Effective Time shall be the operating agreement
of the Surviving Entity (subject to any subsequent amendment).

 

1.5                                 Effects
of the Merger. The merger shall have the effects set forth in
Section 23-1-40-6 of the IBCL and Section 23-18-7-5 of the IBFA.

 

1.6                                 Taxation.
It is intended that the Merger shall be treated, for federal income tax
purposes, as a reorganization under Section 368(a) of the Code and that
this Agreement shall constitute a plan of reorganization under
Section 368(a) of the Code. It is also intended that the Limited Liability
Company be disregarded as an entity separate from its owner for federal income
tax purposes. For this reason, the Limited Liability Company will not elect to
be classified as a corporation for any period prior to the effective time of
the Merger. The Limited Liability Company will be treated by default as an
entity disregarded as separate from its owner pursuant to Treasury Regulations
Section 301.7701-3(b)(1)(ii) for all periods prior to the effective time
of the Merger.  Furthermore, it is
intended that, if permissible under relevant state law, the Limited Liability
Company be disregarded as an entity separate from its owner for state tax
purposes.

 

ARTICLE II:  EFFECT ON CAPITAL STOCK AND MEMBERSHIP
INTEREST

 

2.1                                 Effect
on Capital Stock of the Acquired Company. At the Effective Time, by virtue
of the Merger and without any action on the part of the holder of any shares of
Common Stock of the Acquired Company:

 

(a)                                  Outstanding
Capital Stock. Each issued and outstanding share of Common Stock of the
Acquired Company shall be converted into and become a number of fully paid and
nonassessable REIT Common Shares equal to (a) $819.67 divided by (b) the public
offering price per share for REIT Common Shares as set forth in the REIT’s
final prospectus relating to the Kite IPO (rounded to the nearest whole REIT
Common Share).

 

(b)                                 Cancellation
of Company Owned Stock. Any shares of Common Stock that are owned by the
Acquired Company shall be canceled and retired and no consideration shall be
delivered or deliverable in exchange therefor.

 

(c)                                  Stock
Certificates.  At the Effective Time,
each certificate representing shares of Common Stock of the Acquired Company
will be deemed for all purposes to evidence the same number of REIT Common
Shares until such certificate is exchanged for a certificate representing REIT
Common Shares.  Following the Effective
Time, the REIT shall issue certificates representing the number of REIT Common
Shares to the Shareholders upon surrender by the Shareholders of the
certificates, properly endorsed for transfer, representing shares of Common
Stock of the Acquired Company, together with such other documents as may be
reasonably requested by the REIT in connection therewith.

 

3

 

2.2                                 Outstanding
Membership Interests. The 100% interest of the REIT in the Limited Liability
Company shall continue unchanged as a 100% interest of the Surviving Entity.

 

ARTICLE III: 
REPRESENTATIONS, WARRANTIES AND COVENANTS OF

THE ACQUIRED COMPANY AND THE SHAREHOLDERS

 

As a material inducement
to the REIT and the Limited Liability Company to enter into this Agreement and
to consummate the transactions contemplated hereby, the Acquired Company (and
in the case of Sections 3.4, 3.5 and 3.8 only, the Acquired Company and the
Shareholders severally, but not jointly) hereby makes to the REIT and the
Limited Liability Company each of the representations and warranties set forth
in this Article III, which representations and warranties are true and
correct as of the date hereof.

 

3.1                                 Authority;
No Conflicts.  The Acquired Company
has all requisite corporate power and authority to execute and deliver this
Agreement and to consummate the Merger and the other transactions contemplated
hereby.  The execution and delivery by
the Acquired Company of this Agreement and the consummation by the Acquired Company
of the Merger and the other transactions contemplated hereby have been duly
authorized by all necessary corporate action on the part of the Acquired
Company.  The Acquired Company has duly
executed and delivered this Agreement, and this Agreement constitutes its
legal, valid and binding obligation, enforceable against it in accordance with
its terms.  Subject to the receipt of
the Shareholder Consent, the execution, delivery and performance of this
Agreement and each such agreement, document and instrument by or on behalf of
the Acquired Company and compliance with the terms hereof and thereof, and the
consummation of the Merger and the other transactions contemplated hereby, (i)
does not and will not violate any foreign, federal, state, local or other laws
applicable to the Acquired Company or require the Acquired Company to obtain
any approval, consent or waiver of, or make any filing with, any person or
authority (governmental or otherwise) that will not be obtained or made prior
to the Closing, other than the filing of the Articles of Merger; (ii) does not
and will not violate the Acquired Company’s organizational documents; and (iii)
does not and will not violate any term, conditions or provisions of, or
constitute a default under, any bond, note or other evidence of indebtedness or
any contract, lease or other instrument to which the Acquired Company is a
party or by which the property of the Acquired Company is bound or affected or
result in the creation of any Encumbrance on the property or assets of the
Acquired Company.

 

3.2                                 Capital
Structure.  The authorized capital
stock of the Acquired Company is as set forth in the recitals hereto.  Schedule 1 hereto sets for the
number of shares of Common Stock issued and outstanding and the owner thereof.  No shares of Company Common Stock are held
by the Acquired Company in its treasury. 
Except as set forth on Schedule 1 hereto, no shares of
capital stock or other voting securities of the Acquired Company are issued,
reserved for issuance or outstanding. 
All outstanding shares of Common Stock are duly authorized, validly
issued, fully paid and nonassessable and not subject to or issued in violation
of any purchase option, call option, right of first refusal, preemptive right,
subscription right or any similar right under any provision of the IBCL, the
Acquired Company’s articles of incorporation or bylaws or any contract to which
the Acquired Company is a party or otherwise bound.  There are no bonds, debentures, notes or other indebtedness of
the Acquired Company having the right to vote on any

 

4

 

matters on which holders
of Common Stock may vote.  There are not
any options, warrants, rights, contracts, arrangements or undertakings of any
kind to which the Acquired Company is a party or by which it is bound
obligating the Acquired Company to issue, grant, sell or cause to be issued,
granted or sold, additional shares of capital stock or other equity interests
in, or any security convertible or exercisable for or exchangeable into any
capital stock of or other equity interest in, the Acquired Company.

 

3.3                                 Litigation.  There is no litigation or proceeding, either
judicial or administrative, pending or, to the Acquired Company’s knowledge,
threatened, affecting any Common Stock or the Acquired Company’s ability to
consummate the transactions contemplated hereby.  There is no outstanding order, writ, injunction or decree of any
court, government, governmental entity or authority or arbitration against or
affecting the Acquired Company, which in any such case would impair the
Acquired Company’s ability to enter into and perform all of its obligations
under this Agreement.

 

3.4                                 No
Agreements to Sell.  Other than this
Agreement, no Shareholder is currently a party to any agreement to sell,
transfer or otherwise encumber or dispose of any Common Stock.

 

3.5                                 Status
as a United States Person.  Each
Shareholder represents and warrants that such Shareholder is not a foreign
person within the meaning of Section 1445 of the Code
(“Section 1445”).  The
Shareholder’s U.S. social security number (in the case of an individual) or
taxpayer identification number (in the case of an entity) that has previously
been provided to the Acquired Company is correct.  The Shareholder’s home address (in the case of an individual) or
office address (in the case of an entity) is that address indicated on the
signature page attached hereto. Upon request by the REIT, each Shareholder
agrees to complete and provide to the REIT prior to the Closing a certificate
of non-foreign status substantially in the form provided in
Section 1.1445-5(b)(3)(D) of the Treasury regulations.

 

3.6                                 No
Insolvency Proceedings.  No
attachments, execution proceedings, assignments for the benefit of creditors,
insolvency, bankruptcy, reorganization or other proceedings are pending or, to
the Acquired Company’s knowledge, threatened against the Acquired Company, nor
are any such proceedings contemplated by the Acquired Company.

 

3.7                                 No
Brokers.  The Acquired Company
represents that it has not entered into, and covenants that it will not enter
into, any agreement, arrangement or understanding with any person or firm which
will result in the obligation of the REIT to pay any finder’s fee, brokerage
commission or similar payment in connection with the transactions contemplated
hereby.

 

3.8                                 Securities
Law Matters; Restrictions on Transfer.

 

(a)                                  The
Acquired Company and the Shareholders acknowledge that the REIT intends the
offer and issuance of the REIT Common Shares to be exempt from registration
under the Securities Act of 1933, as amended (the “Securities Act”) and
applicable state securities laws by virtue of (i) the status of the
Shareholders as “accredited investors” within the meaning of the federal
securities laws, and (ii) Section 4(2) of the Securities Act, and
that the REIT will rely in part upon the representations and warranties

 

5

 

made by the Acquired
Company and the Shareholders in this Agreement in making the determination that
the offer and issuance of the REIT Common Shares qualify for exemption under
Section 4(2) of the Securities Act.

 

(b)                                 Each
Shareholder is an “accredited investor” within the meaning of the federal
securities laws.

 

(c)                                  Each
Shareholder will acquire the REIT Common Shares for his own account and not
with a view to, or for sale in connection with, any “distribution” thereof
within the meaning of the Securities Act. Each Shareholder does not intend or
anticipate that the Shareholder will rely on its investment in the REIT Common
Shares as a principal source of income.

 

(d)                                 Each
Shareholder has sufficient knowledge and experience in financial, tax and
business matters to enable the Shareholder to evaluate the merits and risks of
investment in the REIT Common Shares. Each Shareholder has adequate means of
providing for the Shareholder’s current and anticipated financial needs and
contingencies, has the ability to bear the economic risk of acquiring the REIT
Common Stock for an indefinite period of time and has no need for liquidity in
the REIT Common Stock and could afford loss of all such investment. The
Acquired Company and each Shareholder acknowledges that (i) the
transactions contemplated by this Agreement involve complex tax consequences
for the Shareholders, and the Shareholders are relying solely on the advice of
their own respective tax advisors in evaluating such consequences,
(ii) neither the REIT nor the Limited Liability Company has made (nor
shall it be deemed to have made) any representations or warranties as to the
tax consequences of such transaction to the Acquired Company or the
Shareholders, and (iii) references in this Agreement to the intended tax
effect of the transactions contemplated hereby shall not be deemed to imply any
representation by the REIT or the Limited Liability Company as to a particular
tax effect that may be obtained by the Shareholders.  The Shareholders remain solely responsible for all tax matters
relating to them.

 

(e)                                  The
Acquired Company and the Shareholders have been supplied with, or had access
to, information to which a reasonable investor would attach significance in
making an investment decision to acquire the REIT Common Shares and any other
information the Acquired Company or either Shareholder has requested.  The Acquired Company and the Shareholders
have had an opportunity to ask questions of, and receive information and
answers from, the REIT concerning the REIT, the REIT Common Shares and the
other Kite IPO Transactions, and to assess and evaluate any information
supplied to them by the REIT, and all such questions have been answered, and
all such information has been provided to their respective full satisfaction.

 

(f)                                    The
Acquired Company and the Shareholders acknowledge that they are aware that
there are substantial restrictions on the transferability of the REIT Common
Shares and that the REIT Common Shares will not be registered under the
Securities Act or any state securities laws. Each Shareholder agrees that any
REIT Common Shares the Shareholder acquires will not be sold in the absence of
registration unless such sale is exempt from registration under the Securities
Act and applicable state securities laws. 
Each Shareholder acknowledges that the Shareholder shall be responsible
for compliance with all conditions on transfer imposed by any securities
authority and for

 

6

 

any expenses incurred by
the REIT for legal or accounting services in connection with reviewing such a
proposed transfer or issuing opinions in connection therewith.

 

(g)                                 The
Acquired Company and the Shareholders understand that no federal agency
(including the Securities and Exchange Commission) or state agency has made or
will make any finding or determination as to the fairness of an investment in
the REIT Common Shares (including as to the merger consideration).

 

(h)                                 The
Acquired Company and the Shareholders understand that Rule 144 promulgated
under the Securities Act is not currently available with respect to the sale of
REIT Common Shares.

 

(i)                                     All certificates representing REIT Common
Shares shall bear a restrictive legend in substantially the form set forth
below (or a legend of like effect)  in
conspicuous type (together with any other legends required by law or otherwise
placed on such certificates):

 

THE SHARES EVIDENCED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933, AS AMENDED (“SECURITIES ACT”), OR UNDER APPLICABLE
STATE SECURITIES LAWS (“STATE ACTS”) AND MAY BE OFFERED, SOLD OR OTHERWISE TRANSFERRED
ONLY UPON REGISTRATION UNDER THE SECURITIES ACT AND THE STATE ACTS OR PURSUANT
TO AN EXEMPTION THEREFROM.

 

In addition, all such
certificates shall bear an appropriate restrictive legend specifying that the
REIT Common Shares represented by such certificate are held by an affiliate of
the REIT (or, in the absence of such a legend, an appropriate notation shall be
made in the records of the REIT and/or appropriate stop-transfer instructions
shall be issued to the transfer agent).

 

ARTICLE IV: CONDITIONS
TO EACH PARTY’S OBLIGATION TO

EFFECT THE MERGER

 

4.1                                 Conditions
to the REIT’s and the Limited Liability Company’s Obligations to Effect the
Merger.  The obligations of the REIT
and the Limited Liability Company to effect the Merger and the other transactions
contemplated by this Agreement are subject to the fulfillment, at or prior to
the Closing, of the following conditions (unless such conditions are waived in
writing by the REIT and the Limited Liability Company):

 

(a)                                  Other
Kite IPO Transactions.  The other
Kite IPO Transactions, in such form(s) as the REIT, in its sole and absolute
discretion, shall have determined to be acceptable, shall have occurred (or are
occurring simultaneously with the Closing).

 

(b)                                 Representations
and Warranties.  The representations
and warranties made by the Acquired Company and the Shareholders pursuant to
this Agreement shall be true and correct in all respects when made, and on and
as of the

 

7

 

Closing Date, as though
such representations and warranties were made on the Closing Date.

 

(c)                                  Performance.  The Acquired Company shall have performed
and complied with all agreements and covenants that it is required to perform
or comply with pursuant to this Agreement prior to the Closing.

 

(d)                                 Legal
Proceedings.  No action or
proceeding by or before any governmental authority shall have been instituted
that is reasonably expected to restrain, prohibit or invalidate the
transactions contemplated by this Agreement, including the Merger, other than
an action or proceeding instituted by the Acquired Company or the Shareholders.

 

(e)                                  Consents
and Approvals.  The Shareholder
consent and all other necessary consents of governmental and private parties to
effect the Merger and the other transactions contemplated by this Agreement,
including, without limitation, consents of any lenders, shall have been
obtained.

 

4.2                                 Conditions
to the Acquired Company’s Obligation to Effect the Merger.  The obligation of the Acquired Company to
effect the Merger and the other transactions contemplated by this Agreement is
subject to the fulfillment, at or prior to the Closing, of the following
conditions (unless such conditions are waived in writing by the Acquired
Company):

 

(a)                                  Performance.  Each of the REIT and the Limited Liability
Company shall have performed and complied with all agreements and covenants
that it is required to perform or comply with pursuant to this Agreement prior
to the Closing.

 

(b)                                 Legal
Proceedings.  No action or
proceeding by or before any governmental authority shall have been instituted
that is reasonably expected to restrain, prohibit or invalidate the
transactions contemplated by this Agreement including the Merger, other than an
action or proceeding instituted by the REIT or the Limited Liability Company;
provided, that the foregoing condition shall be deemed to have been satisfied
if the REIT or the Limited Liability Company shall have fully indemnified the
Shareholders from any loss, liability, claim, damage or expense arising out of
the Acquired Company’s proceeding to effect the Merger in the face of any such
action or proceeding.

 

(c)                                  Consents
and Approvals.  The Shareholder
Consent and all other necessary consents of governmental and private parties to
effect the Merger and other transactions contemplated by this Agreement,
including, without limitation, consents of any lenders, shall have been
obtained; provided, that the foregoing condition shall be deemed to have been
satisfied if the REIT or the Limited Liability Company shall have fully
indemnified the Shareholders from any loss, liability, claim, damage or expense
arising out of the Acquired Company’s proceeding to effect the Merger without
having obtained a necessary consent.

 

(d)                                 Registration
Rights Agreement.  The REIT shall
have entered into a registration rights agreement with the Shareholder
providing the Shareholder with registration rights that register the resale of
REIT Common Shares issued pursuant to this

 

8

 

Agreement, such
registration rights agreement to contain such other terms and conditions
customary for a transaction of this type.

 

ARTICLE V: 
OTHER COVENANTS AND AGREEMENTS

 

5.1                                 Conditional
Nature of Transaction.  The Acquired
Company acknowledges and understands that it is a condition to the REIT’s
obligations to close the transactions contemplated hereby that the other Kite
IPO Transactions shall have occurred (or are occurring simultaneously with the
Closing), that the occurrence of any of the other Kite IPO Transactions is
wholly within the sole and absolute discretion of the REIT and its affiliates,
and that the Acquired Company has no right to force any of the other Kite IPO
Transactions to occur, on any terms.

 

5.2                                 Further
Assurances.  The Acquired Company
shall execute and deliver to the REIT and the Limited Liability Company all
such other and further instruments and documents and take or cause to be taken
all such other and further actions as the REIT or the Limited Liability Company
may reasonably request in order to effect the Merger and the other transactions
contemplated by this Agreement.

 

ARTICLE VI: TERMINATION

 

6.1                                 Termination
and Abandonment by the REIT.  The
REIT shall have the right to terminate this Agreement and abandon the Merger at
any time prior to the filing of the Articles of Merger, before or after
approval by the Shareholders or the REIT, as sole member of the Limited
Liability Company, following the occurrence of any of the following events:

 

(i)                                     the
determination by the REIT, in its sole and absolute discretion, not to proceed
with the Kite IPO Transactions;

 

(ii)                                  the
determination by the REIT, in its sole and absolute discretion, not to proceed
with the Merger on the terms outlined herein; or

 

(iii)                               at
any time on or after January 1, 2005, for any reason.

 

6.2                                 Termination
and Abandonment by the Acquired Company. 
The Acquired Company shall have the right to terminate this Agreement
and abandon the Merger at any time and for any reason on or after
January 1, 2005, but prior to the filing of the Articles of Merger,
whether or not such termination occurs before or after approval by the
Shareholders or the REIT, as sole member of the Limited Liability Company.

 

6.3                                 Effect
of Termination and Abandonment. 
Upon the termination of this Agreement and abandonment of the Merger
pursuant to Section 6.1 or 6.2 hereof, this Agreement shall become void
and have no effect, and no party shall have any liability to the other in
connection with the transactions contemplated hereby, including the Merger or
as a result of the termination of this Agreement; provided, that the foregoing
shall not relieve a party of any liability as a result of a breach of any of
the terms of this Agreement.

 

9

 

ARTICLE VII: 
MISCELLANEOUS

 

 

7.1                                 Amendment;
Waiver.  Any amendment hereto shall
be effective only if signed by all parties hereto.  No waiver of any provisions of this Agreement shall be valid
unless in writing and signed by the party against whom enforcement is sought.

 

7.2                                 Entire
Agreement; Counterparts; Applicable Law. 
This Agreement shall (a) constitute the entire agreement between the
parties hereto with respect to the transactions expressly contemplated hereby
and supersedes all prior agreements and understandings, both written and oral,
among the parties with respect to the subject matter hereof, (b) may be
executed in one or more counterparts, each of which will be deemed an original
and all of which shall constitute one and the same instrument, and (c) shall be
governed in all respects, including validity, interpretation and effect, by the
laws of the State of Indiana.

 

7.3                                 Assignability.  This Agreement shall be binding upon, and
shall be enforceable by and inure to the benefit of, the parties hereto and
their respective heirs, legal representatives, successors and assigns;
provided, however, that this Agreement may not be assigned (except by operation
of law) by any party without the prior written consent of the other parties,
and any attempted assignment without such consent shall be void and of no
effect; provided, further, however, that the Limited Liability Company may
assign this Agreement and any agreement contemplated hereunder or thereunder to
an affiliate of the Limited Liability Company, or to any entity into which the
Limited Liability Company is reorganized without the consent of the Acquired
Company.

 

7.4                                 Severability.  If any provision of this Agreement, or the
application thereof, is for any reason held to any extent to be invalid or
unenforceable, the remainder of this Agreement and application of such
provision to other persons or circumstances will be interpreted so as
reasonably to effect the intent of the parties hereto.  The parties further agree to replace such
void or unenforceable provision of this Agreement with a valid and enforceable
provision that will achieve, to the extent possible, the economic, business and
other purposes of the void or unenforceable provision and to execute any
amendment, consent or agreement deemed necessary or desirable by the REIT to
effect such replacement.

 

7.5                                 Equitable
Remedies.  The parties hereto agree
that irreparable damage would occur if any provision of this Agreement was not
performed in accordance with its specific terms or was otherwise breached.  It is accordingly agreed that the parties
shall be entitled to an injunction or injunctions to prevent breaches of this
Agreement and to enforce specifically the terms and provisions hereof in any
federal or state court located in the State of Indiana (as to which the parties
agree to submit to jurisdiction for the purposes of such action), this being in
addition to any other remedy to which they are entitled at law or in equity.

 

7.6                                 Time
of the Essence.  Time is of the
essence with respect to the Acquired Company’s obligations under this
Agreement.

 

10

 

7.7                                 No
Third Party Beneficiaries. Except for the provisions of Article II,
this Agreement is not intended to confer upon any person other than the parties
hereto any rights or remedies hereunder.

 

[Remainder of page intentionally left blank]

 

11

 

IN WITNESS WHEREOF, each
of the parties hereto has executed and delivered this Agreement, or has caused
this Agreement to be executed and delivered on its behalf, as of the date first
set forth above.

 

 

	
   

  	
  KITE REALTY
  GROUP TRUST

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/ JOHN A. KITE

  	
   

  
	
   

  	
   

  	
  Name:

  	
  John A. Kite

  
	
   

  	
   

  	
  Title:

  	
  President and
  Chief Executive

  Officer

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  KRG
  CONSTRUCTION, LLC

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  KITE REALTY
  GROUP TRUST,

  
	
   

  	
   

  	
  its Sole Member

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/ JOHN A. KITE

  	
   

  
	
   

  	
   

  	
  Name:

  	
  John A. Kite

  
	
   

  	
   

  	
  Title:

  	
  President and
  Chief Executive

  Officer

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  KITE
  CONSTRUCTION, INC.

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/ JOHN A. KITE

  	
   

  
	
   

  	
   

  	
  Name:

  	
  John A. Kite

  
	
   

  	
   

  	
  Title:

  	
  President

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  For purposes of
  Section 3.8 only:

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  /s/ ALVIN E.
  KITE, JR.

  	
   

  
	
   

  	
  Alvin E. Kite,
  Jr.

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  /s/ JOHN A. KITE

  	
   

  
	
   

  	
  John A. Kite

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  /s/ PAUL W. KITE

  	
   

  
	
   

  	
  Paul W. Kite

  
						

 

12

 

SCHEDULES TO THE AGREEMENT AND PLAN OF MERGER*

 

 

Schedule A                                  Common Stock Ownership

 

 

*                                         The
registrant agrees to furnish, supplementally, a copy of omitted Schedule A
upon request.

 

13

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