Document:

Document

INFRASTRUCTURE AND ENERGY ALTERNATIVES, INC.
2021 EMPLOYEE STOCK PURCHASE PLAN
 
1.Purpose.  The purpose of the Plan is to provide employees of the Company and its Designated Companies with an opportunity to acquire a proprietary interest in the Company through the purchase of shares of Common Stock.  The Company intends for the Plan to qualify as an “employee stock purchase plan” under Section 423 of the Code.  The provisions of the Plan, accordingly, will be construed so as to extend and limit Plan participation in a uniform and nondiscriminatory basis consistent with the requirements of Section 423 of the Code.  
2.Definitions.
(a)“Administrator” means the Board or any Committee designated by the Board to administer the Plan pursuant to Section 14.
(b)“Affiliate” means (i) any person or entity that directly or indirectly controls, is controlled by or is under common control with the Company and/or (ii) to the extent provided by the Committee, any person or entity in which the Company has a significant interest. The term “control” (including, with correlative meaning, the terms “controlled by” and “under common control with”), as applied to any person or entity, means the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of such person or entity, whether through the ownership of voting or other securities, by contract or otherwise.
(c)“Applicable Laws” means the requirements relating to the administration of equity-based awards under U.S. state corporate laws, U.S. federal and state securities laws, the Code, any stock exchange or quotation system on which the Common Stock is listed or quoted and the applicable laws of any foreign country or jurisdiction where options are, or will be, granted under the Plan.
(d)“Beneficial Ownership” has the meaning set forth in Rule 13d-3 promulgated under Section 13 of the Exchange Act.
(e)“Board” means the Board of Directors of the Company.
(f)“Change in Control” means the occurrence of any of the following events:
a.The acquisition by any Person or related “group” (as such term is used in Section 13(d) and Section 14(d) of the Exchange Act) of Persons, or persons acting jointly or in concert, of Beneficial Ownership (including control or direction) of 50% or more (on a fully diluted basis) of either (A) the then-outstanding shares of Common Stock, including Common Stock issuable upon the exercise of options or warrants, the conversion of convertible stock or debt, and the exercise of any similar right to acquire such Common Stock (the “Outstanding Company Common Stock”); or (B) the combined voting power of the then-outstanding voting securities of the Company entitled to vote in the election of directors (the “Outstanding Company Voting Securities”); but excluding any acquisition by the Company or 

any of its Affiliates, its Permitted Transferees or any of their respective Affiliates or by any employee benefit plan sponsored or maintained by the Company or any of its Affiliates;
b.A change in the composition of the Board such that members of the Board during any consecutive 12-month period (the “Incumbent Directors”) cease to constitute a majority of the Board. Any person becoming a director through election or nomination for election approved by a valid vote of at least two thirds of the Incumbent Directors shall be an Incumbent Director; provided, however, that no individual becoming a director as a result of an actual or threatened election contest, as such terms are used in Rule 14a-12 of Regulation 14A promulgated under the Exchange Act, or as a result of any other actual or threatened solicitation of proxies or consents by or on behalf of any person other than the Board, shall be an Incumbent Director; 
c.The approval by the shareholders of the Company of a plan of complete dissolution or liquidation of the Company; and
d.The consummation of a reorganization, recapitalization, merger, amalgamation, consolidation, statutory share exchange or similar form of corporate transaction involving the Company (a “Business Combination”), or sale, transfer or other disposition of all or substantially all of the business or assets of the Company to an entity that is not an Affiliate of the Company (a “Sale”), unless immediately following such Business Combination or Sale: (A) more than 50% of the total voting power of the entity resulting from such Business Combination or the entity that acquired all or substantially all of the business or assets of the Company in such Sale (in either case, the “Surviving Company”), or the ultimate parent entity that has Beneficial Ownership of sufficient voting power to elect a majority of the board of directors (or analogous governing body) of the Surviving Company (the “Parent Company”), is represented by the Outstanding Company Voting Securities that were outstanding immediately prior to such Business Combination or Sale (or, if applicable, is represented by shares into which the Outstanding Company Voting Securities were converted pursuant to such Business Combination or Sale), and such voting power among the holders thereof is in substantially the same proportion as the voting power of the Outstanding Company Voting Securities among the holders thereof immediately prior to the Business Combination or Sale, (B) no Person (other than any employee benefit plan sponsored or maintained by the Surviving Company or the Parent Company) is or becomes the beneficial owner, directly or indirectly, of 50% or more of the total voting power of the outstanding voting securities eligible to elect members of the board of directors (or the analogous governing body) of the Parent Company (or, if there is no Parent Company, the Surviving Company) and (C) at least a majority of the members of the board of directors (or the analogous governing body) of the Parent Company (or, if there is no Parent Company, the Surviving Company) following the consummation of the Business Combination or Sale were Board members at the time of the Board’s approval of the execution of the initial agreement providing for such Business Combination or Sale.
(g)“Code” means the U.S. Internal Revenue Code of 1986, as amended.  Reference to a specific section of the Code will include such section, any valid regulation or other official 
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applicable guidance promulgated under such section, and any comparable provision of any future legislation or regulation amending, supplementing or superseding such section or regulation.
(h)“Committee” means a committee of the Board appointed in accordance with Section 14.
(i)“Common Stock” means the common stock of the Company, par value $0.0001 per share.
(j)“Company” means Infrastructure and Energy Alternatives, Inc., a Delaware corporation, or any successor thereto.
(k)“Compensation” includes an Eligible Employee’s base straight time gross earnings, excluding commissions, bonuses and other incentive compensation.  Notwithstanding the foregoing, the Administrator, in its discretion, from time to time may (on a uniform and nondiscriminatory basis), prior to an Enrollment Date, modify the definition of Compensation effective for Offering Periods commencing on or after such Enrollment Date.
(l)“Contributions” means the payroll deductions and other additional payments that the Company may permit to be made by a Participant to fund the exercise of options granted pursuant to the Plan.
(m)“Designated Company” means any Subsidiary of the Company that has been designated by the Administrator from time to time in its sole discretion as eligible to participate in the Plan.  
(n)“Director” means a member of the Board.
(o)“Effective Date” means the date on which this Plan is adopted by the Board, subject to approval by stockholders in accordance with Section 25.
(p)“Eligible Employee” means any individual who is a common law employee providing services to the Company or a Designated Company other than an employee who (i) has not completed at least three (3) months of service since his or her last hire date, or (ii) customarily works not more than twenty (20) hours per week.  Notwithstanding the foregoing, the Administrator, in its discretion, from time to time may, prior to an Enrollment Date for all options to be granted on such Enrollment Date in an Offering, determine (on a uniform and nondiscriminatory basis or as otherwise permitted by Treasury Regulation Section 1.423-2) that the definition of Eligible Employee will or will not, as applicable, include an individual if he or she: (i) has not completed at least two (2) years of service since his or her last hire date (or such lesser period of time as may be determined by the Administrator in its discretion), (ii) customarily works not more than twenty (20) hours per week (or such lesser number of hours as may be determined by the Administrator in its discretion), (iii) customarily works not more than five (5) months per calendar year (or such lesser period of time as may be determined by the Administrator in its discretion), (iv) is a highly compensated employee within the meaning of Section 414(q) of the Code, or (v) is a highly compensated employee within the meaning of 
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Section 414(q) of the Code with compensation above a certain level or is an officer or subject to the disclosure requirements of Section 16(a) of the Exchange Act, provided the exclusion is applied with respect to each Offering in an identical manner to all highly compensated individuals of the Employer whose Eligible Employees are participating in that Offering.  Each exclusion will be applied with respect to an Offering in a manner complying with U.S. Treasury Regulation Section 1.423-2(e)(2)(ii).  For purposes of the Plan, the employment relationship will be treated as continuing intact while the individual is on sick leave or other leave of absence that the Employer approves or is legally protected under Applicable Laws.  Where the period of leave exceeds three (3) months and the individual’s right to reemployment is not guaranteed either by statute or by contract, the employment relationship will be deemed to have terminated three (3) months and one (1) day following the commencement of such leave.  
(q)“Employer” means the employer of the applicable Eligible Employee(s).
(r)“Enrollment Date” means the first Trading Day of an Offering Period.
(s)“Exchange Act” means the U.S. Securities Exchange Act of 1934, as amended, including the rules and regulations promulgated thereunder.
(t)“Exercise Date” means the date on which each outstanding option granted under the Plan will be exercised. The Plan’s Exercise Dates shall be June 1 and December 1; provided, however, that the Administrator, in its discretion, from time to time may change the Exercise Date(s) on a uniform and nondiscriminatory basis from time to time prior to an Enrollment Date for all options to be granted on or after such Enrollment Date.  For purposes of clarification, the Administrator may establish multiple Exercise Dates during an Offering Period.
(u)“Fair Market Value” means, as of any date, the value of a Share of Common Stock determined as follows:
a.The Fair Market Value will be the closing sales price for Common Stock as quoted on any established stock exchange or national market system (including without limitation the NASDAQ Capital Market, the NASDAQ Global Select Market or the NASDAQ Global Market of The NASDAQ Stock Market, or the New York Stock Exchange) on which the Common Stock is listed on the date of determination (or the closing bid, if no sales were reported), as reported in The Wall Street Journal or such other source as the Administrator deems reliable.  If the determination date for the Fair Market Value occurs on a non-Trading Day (i.e., a weekend or holiday), the Fair Market Value will be such price on the immediately preceding Trading Day, unless otherwise determined by the Administrator.  
b.In the absence of an established market for the Common Stock, Fair Market Value will be determined in good faith by the Administrator.
The determination of fair market value for purposes of tax withholding may be made in the Administrator’s discretion subject to Applicable Laws and is not required to be consistent with the determination of Fair Market Value for other purposes.
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(v)“New Exercise Date” means a new Exercise Date if the Administrator shortens any Offering Period then in progress.
(w)“Offering” means an offer under the Plan of an option that may be exercised during an Offering Period as further described in Section 4.  For purposes of the Plan, the Administrator may designate separate Offerings under the Plan (the terms of which need not be identical) in which Eligible Employees of one or more Employers will participate, even if the dates of the applicable Offering Periods of each such Offering are identical and the provisions of the Plan will separately apply to each Offering.  To the extent permitted by U.S. Treasury Regulation Section 1.423-2(a)(1), the terms of each Offering need not be identical provided that the terms of the Plan and an Offering together satisfy U.S. Treasury Regulation Section 1.423-2(a)(2) and (a)(3).
(x)“Offering Period” means the six (6) month periods from June 2 to the next December 1, and from December 2 to the next June 1; the first Offering Period will be the period from December 2, 2021 to June 1, 2022.  Notwithstanding the foregoing, the Administrator, in its discretion, from time to time may modify the duration and timing of Offering Periods pursuant to Sections 4, 20, and 30.
(y)“Parent” means a “parent corporation,” whether now or hereafter existing, as defined in Section 424(e) of the Code.
(z)“Participant” means an Eligible Employee who participates in the Plan.
(aa)“Permitted Transferee” means (A) any person who is a “family member” of the Participant, as such term is used in the instructions to Form S-8 under the Securities Act or any successor form of registration statements promulgated by the Securities and Exchange Commission (collectively, the “Immediate Family Members”); (B) a trust solely for the benefit of the Participant or the Participant’s Immediate Family Members; (C) a partnership or limited liability company whose only partners or shareholders are the Participant and the Participant’s Immediate Family Members; or (D) any other transferee as may be approved by the Board or the Committee.
(bb)“Person” has the meaning given in Section 3(a)(9) of the Exchange Act, as modified and used in Sections 13(d) and 14(d) thereof, except that such term shall not include (i) the Company or any of its subsidiaries, (ii) a trustee or other fiduciary holding securities under an employee benefit plan of the Company or any of its Affiliates, (iii) an underwriter temporarily holding securities pursuant to an offering of such securities, or (iv) a corporation owned, directly or indirectly, by the shareholders of the Company in substantially the same proportions as their ownership of Common Stock of the Company.
(cc)“Plan” means this Infrastructure and Energy Alternatives, Inc. 2021 Employee Stock Purchase Plan.
(dd)“Purchase Price” means the lesser of 85% of the Fair Market Value of a Share on (A) the Enrollment Date and (B) the Exercise Date, or such other amount as may be 
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required under Section 423 of the Code.  Notwithstanding the foregoing, the Administrator, in its discretion, from time to time may modify the definition of Purchase Price on a uniform and nondiscriminatory basis prior to an Enrollment Date for all options to be granted on or after such Enrollment Date, provided that the Purchase Price shall not be less than the lesser of 85% of the Fair Market Value of a Share on (i) the Enrollment Date and (ii) the Exercise Date, or such other amount as may be required under Section 423 of the Code.
(ee)“Subsidiary” means a “subsidiary corporation,” whether now or hereafter existing, as defined in Section 424(f) of the Code.
(ff)“Trading Day” means a day on which the national stock exchange upon which the Common Stock is listed is open for trading.
(gg)“U.S. Treasury Regulations” means the Treasury regulations of the Code.  Reference to a specific Treasury Regulation will include such Treasury Regulation, the section of the Code under which such regulation was promulgated, and any comparable provision of any future legislation or regulation amending, supplementing, or superseding such Section or regulation.
3.Eligibility.
(i)Offering Periods.  Any Eligible Employee on a given Enrollment Date will be eligible to participate in the Plan, subject to the requirements of Section 5.
(ii)Non-U.S. Employees.  Eligible Employees who are citizens or residents of a non-U.S. jurisdiction (without regard to whether they also are citizens or residents of the United States or resident aliens (within the meaning of Section 7701(b)(1)(A) of the Code)) may be excluded from participation in the Plan or an Offering if the participation of such Eligible Employees is prohibited under the laws of the applicable jurisdiction or if complying with the laws of the applicable jurisdiction would cause the Plan or an Offering to violate Section 423 of the Code.
(iii)Limitations.  Any provisions of the Plan to the contrary notwithstanding, no Eligible Employee will be granted an option under the Plan (i) to the extent that, immediately after the grant, such Eligible Employee (or any other person whose stock would be attributed to such Eligible Employee pursuant to Section 424(d) of the Code) would own capital stock of the Company or any Parent or Subsidiary of the Company and/or hold outstanding options to purchase such stock possessing five percent (5%) or more of the total combined voting power or value of all classes of the capital stock of the Company or of any Parent or Subsidiary of the Company, or (ii) to the extent that his or her rights to purchase stock under all employee stock purchase plans (as defined in Section 423 of the Code) of the Company or any Parent or Subsidiary of the Company accrues at a rate, which exceeds twenty-five thousand dollars ($25,000) worth of stock (determined at the Fair Market Value of the stock at the time such option is granted) for each calendar year in which such option is outstanding at any time, as determined in accordance with Section 423 of the Code and the regulations thereunder.
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4.Offering Periods.  Each Offering Period will expire on the completion of the purchase of Shares on the last Exercise Date in that Offering Period.  Notwithstanding the foregoing, the Administrator, in its discretion, from time to time may change the duration and timing of Offering Periods, provided that the last Exercise Date of each Offering Period must occur no later than twenty-seven (27) months after the applicable Enrollment Date on which the option to purchase Shares was granted.  Such change in the Offering Period must be made on a uniform and nondiscriminatory basis and must be made prior to the Enrollment Date for the modified Offering Period.
5.Participation.  An Eligible Employee may participate in the Plan by (i) submitting to the Company’s stock administration office (or its designee) a properly completed subscription agreement authorizing Contributions in the form provided by the Administrator for such purpose (which may be an on-line electronic agreement) or (ii) following an electronic or other enrollment procedure determined by the Administrator, in either case on or before a date determined by the Administrator prior to an applicable Enrollment Date.
6.Contributions.
(i)At the time a Participant enrolls in the Plan pursuant to Section 5, he or she will elect to have Contributions (in the form of payroll deductions or otherwise, to the extent permitted by the Administrator) made on each pay day during the Offering Period.  A Participant’s Contributions during a single Offering Period may not exceed 10% of his or her Compensation during such Offering Period, subject to the limitations set forth in Section 3(c).  The foregoing limitations on Contributions may be modified by the Administrator from time to time, in its discretion and on a uniform and nondiscriminatory basis, for all options to be granted on any Enrollment Date.  The Administrator, in its sole discretion, may permit all Participants in a specified Offering to contribute amounts to the Plan through payment by cash, check or other means set forth in the subscription agreement prior to each Exercise Date of each Offering Period.  A Participant’s subscription agreement will remain in effect for successive Offering Periods unless terminated as provided in Section 10.
(ii)In the event Contributions are made in the form of payroll deductions, such payroll deductions for a Participant will commence on the first pay day following the Enrollment Date and will end on the last pay day on or prior to the last Exercise Date of such Offering Period to which such authorization is applicable, unless sooner terminated by the Participant as provided in Section 10.
(iii)All Contributions made for a Participant will be credited to his or her account under the Plan and Contributions will be made in whole percentages of his or her Compensation only.  
(iv)A Participant who has enrolled in an Offering Period may elect to prospectively reduce the percentage of Compensation to contribute to the Plan; provided that the Participant may not make more than one such change election during each Offering Period.  An election to reduce Contributions is effective for payroll periods commencing five (5) business days or more after the election is made.  A Participant may not elect to increase his or her rate of Contributions 
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during an Offering Period. Notwithstanding the foregoing, the Administrator may, in its discretion and on a uniform and nondiscriminatory basis, change the rule regarding elections to increase or decrease the rate of Contributions, provided that the change for an Offering Period is made and communicated to Eligible Employees before the beginning of that Offering Period.
(v)Notwithstanding the foregoing, to the extent necessary to comply with Section 423(b)(8) of the Code and Section 3(c), a Participant’s Contributions may be decreased to zero percent (0%) at any time during an Offering Period.  Subject to Section 3(c) and Section 423(b)(8) of the Code, Contributions will recommence at the rate originally elected by the Participant effective as of the beginning of the first Offering Period scheduled to end in the following calendar year, unless terminated by the Participant as provided in Section 10.
(vi)Notwithstanding any provisions to the contrary in the Plan, the Administrator may allow Participants to participate in the Plan via cash contributions instead of payroll deductions if (i) payroll deductions are not permitted under applicable local law, or (ii) the Administrator determines that cash contributions are permissible under Section 423 of the Code.
(vii)At the time the option is exercised, in whole or in part, or at the time some or all of the Common Stock issued under the Plan is disposed of (or any other time that a taxable event related to the Plan occurs), the Participant must make adequate provision for the Company’s or Employer’s federal, state, local or any other tax liability payable to any authority including taxes imposed by jurisdictions outside of the U.S., national insurance, social security or other tax withholding obligations, if any, which arise upon the exercise of the option or the disposition of the Common Stock (or any other time that a taxable event related to the Plan occurs).  At any time, the Company or the Employer may, but will not be obligated to, withhold from the Participant’s compensation the amount necessary for the Company or the Employer to meet applicable withholding obligations, including any withholding required to make available to the Company or the Employer any tax deductions or benefits attributable to sale or early disposition of Common Stock by the Eligible Employee.  In addition, the Company or the Employer may, but will not be obligated to, withhold from the proceeds of the sale of Common Stock or any other method of withholding the Company or the Employer deems appropriate to the extent permitted by U.S. Treasury Regulation Section 1.423-2(f).
7.Grant of Option.  On the Enrollment Date of each Offering Period, each Eligible Employee participating in such Offering Period will be granted an option to purchase on each Exercise Date during such Offering Period (at the applicable Purchase Price) up to a number of Shares of Common Stock determined by dividing such Eligible Employee’s Contributions accumulated prior to such Exercise Date and retained in the Eligible Employee’s account as of the Exercise Date by the applicable Purchase Price, subject to the limitations set forth in Sections 3(c), 8,  and 13.  The Eligible Employee may accept the grant of such option by electing to participate in the Plan in accordance with the requirements of Section 5.  The Administrator may, for future Offering Periods, increase or decrease, in its absolute discretion, the maximum number of Shares of Common Stock that an Eligible Employee may purchase during each Offering Period.  Exercise of the option will occur as provided in Section 8, unless the Participant has withdrawn pursuant to Section 10.  The option will expire on the last day of the Offering Period.
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8.Exercise of Option.
(i)A Participant’s option for the purchase of Shares of Common Stock will be exercised automatically on each Exercise Date, and the maximum number of full Shares subject to the option will be purchased for such Participant at the applicable Purchase Price with the accumulated Contributions from his or her account, provided that in no event more than 5,000 shares per Offering Period.  No fractional Shares of Common Stock will be purchased; any Contributions accumulated in a Participant’s account that are not sufficient to purchase a full Share will be retained in the Participant’s account for the subsequent Offering Period, subject to earlier withdrawal by the Participant as provided in Section 10.  Any other funds left over in a Participant’s account after the Exercise Date will be returned to the Participant.  During a Participant’s lifetime, a Participant’s option to purchase Shares hereunder is exercisable only by him or her.
(ii)If the Administrator determines that, on a given Exercise Date, the number of Shares of Common Stock with respect to which options are to be exercised may exceed (i) the number of Shares of Common Stock that were available for sale under the Plan on the Enrollment Date of the applicable Offering Period, or (ii) the number of Shares of Common Stock available for sale under the Plan on such Exercise Date, the Administrator may in its sole discretion (x) provide that the Company will make a pro rata allocation of the Shares of Common Stock available for purchase on such Enrollment Date or Exercise Date, as applicable, in as uniform a manner as will be practicable and as it will determine in its sole discretion to be equitable among all Participants exercising options to purchase Common Stock on such Exercise Date, and continue all Offering Periods then in effect or (y) provide that the Company will make a pro rata allocation of the Shares of Common Stock available for purchase on such Enrollment Date or Exercise Date, as applicable, in as uniform a manner as will be practicable and as it will determine in its sole discretion to be equitable among all participants exercising options to purchase Common Stock on such Exercise Date, and terminate any or all Offering Periods then in effect pursuant to Section 20.  The Company may make a pro rata allocation of the Shares available on the Enrollment Date of any applicable Offering Period pursuant to the preceding sentence, notwithstanding any authorization of additional Shares for issuance under the Plan by the Company’s stockholders subsequent to such Enrollment Date.
9.Delivery.  
(i)As soon as reasonably practicable after each Exercise Date on which a purchase of Shares of Common Stock occurs, the Company will arrange the delivery to each Participant of the Shares purchased upon exercise of his or her option in a form determined by the Administrator (in its sole discretion) and pursuant to rules established by the Administrator.  The Company may permit or require that Shares be deposited directly with a broker designated by the Company or to a designated agent of the Company, and the Company may utilize electronic or automated methods of Share transfer.  The Company may require that Shares be retained with such broker or agent for a designated period of time and/or may establish other procedures to permit tracking of disqualifying dispositions of such Shares.  
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(ii)No Participant will have any voting, dividend, or other stockholder rights with respect to Shares of Common Stock subject to any option granted under the Plan until such Shares have been purchased and delivered to the Participant as provided in this Section 9.  Upon receipt of any Shares issued under this Plan, a Participant will be required to hold such Shares for a minimum of six months from the date of issuance, following which he or she is free to hold or dispose of such Shares, subject to Applicable Laws and any internal Company policy then in effect and applicable to the Participant, such as the Company’s insider trading policy.
10.Withdrawal.
(a)A Participant’s subscription agreement will remain in effect for successive Offering Periods until the Participant withdraws from a succeeding Offering Period prior to the Enrollment Date for that Offering Period by (i) submitting to the Company’s stock administration office (or its designee) a written notice of withdrawal in the form determined by the Administrator for such purpose, or (ii) following an electronic or other withdrawal procedure determined by the Administrator.  If a Participant withdraws from an Offering Period, Contributions will not be made for that Offering Period and for succeeding Offering Periods, until the Participant re-enrolls in the Plan in accordance with the provisions of Section 5.    A Participant’s withdrawal from an Offering Period will not have any effect on his or her eligibility to participate in any similar plan that may hereafter be adopted by the Company or in succeeding Offering Periods that commence after the termination of the Offering Period from which the Participant withdraws.
(b)A Participant enrolled in an Offering Period may withdraw all but not less than all the Contributions credited to his or her account for that Offering Period and not yet used to exercise his or her option under the Plan, subject to any limitations imposed by the Administrator and/or by Company policies.  Such withdrawal must be made at least five (5) business days before an Exercise Date in order for the withdrawal to be effective before the purchase on that Exercise Date.  A Participant may make a withdrawal by (i) submitting to the Company’s stock administration office (or its designee) a written notice of withdrawal in the form determined by the Administrator for such purpose, or (ii) following an electronic or other withdrawal procedure determined by the Administrator.  All of the Participant’s Contributions credited to his or her account will be paid to such Participant promptly after receipt of notice of withdrawal and such Participant’s option for the Offering Period will be automatically terminated, and no further Contributions for the purchase of Shares will be made for such Offering Period.  If a Participant withdraws from an Offering Period, Contributions will not resume at the beginning of the succeeding Offering Period, unless the Participant re-enrolls in the Plan in accordance with the provisions of Section 5.  
11. Termination of Employment.  Upon a Participant’s ceasing to be an Eligible Employee, for any reason, he or she will be deemed to have elected to withdraw from the Plan and the Contributions credited to such Participant’s account during the Offering Period but not yet used to purchase Shares of Common Stock under the Plan will be returned to such Participant or, in the case of his or her death, to the person or persons entitled thereto under Section 15, and such Participant’s option will be automatically terminated.  Unless otherwise provided by the 
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Administrator, a Participant whose employment transfers between entities through a termination with an immediate rehire (with no break in service) by the Company or a Designated Company will not be treated as terminated under the Plan.  
12.Interest.  No interest will accrue on the Contributions of a Participant in the Plan, except as may be required by Applicable Law, as determined by the Company, and if so required by the laws of a particular jurisdiction, will apply to all Participants in the relevant Offering, except to the extent otherwise permitted by U.S. Treasury Regulation Section 1.423-2(f).
13.Stock.
i.Subject to adjustment upon changes in capitalization of the Company as provided in Section 19, the maximum number of Shares of Common Stock that will be made available for sale under the Plan will be 700,000 Shares of Common Stock.  
ii.Until the Shares of Common Stock are issued (as evidenced by the appropriate entry on the books of the Company or of a duly authorized transfer agent of the Company), a Participant will have only the rights of an unsecured creditor with respect to such Shares, and no right to vote or receive dividends or any other rights as a stockholder will exist with respect to such Shares.
iii.Shares of Common Stock to be delivered to a Participant under the Plan will be registered in the name of the Participant or in the name of the Participant and his or her spouse, as the Participant may elect.

14.Administration.  The Plan will be administered by the Board or a Committee appointed by the Board, which Committee will be constituted to comply with Applicable Laws.  The Administrator will have full and exclusive discretionary authority to construe, interpret and apply the terms of the Plan, to delegate ministerial duties to any of the Company’s employees, to designate separate Offerings under the Plan, to designate Subsidiaries of the Company as participating in the Plan, to determine eligibility, to adjudicate all disputed claims filed under the Plan and to establish such procedures that it deems necessary for the administration of the Plan (including, without limitation, to adopt such procedures and sub-plans as are necessary or appropriate to permit the participation in the Plan by employees who are foreign nationals or employed outside the U.S., the terms of which sub-plans may take precedence over other provisions of this Plan, with the exception of Section 13(a), but unless otherwise superseded by the terms of such sub-plan, the provisions of this Plan will govern the operation of such sub-plan).  Without limiting the generality of the foregoing, the Administrator is specifically authorized to adopt rules and procedures regarding eligibility to participate, the definition of Compensation, handling of Contributions, making of Contributions to the Plan (including, without limitation, in forms other than payroll deductions), establishment of bank or trust accounts to hold Contributions, payment of interest, conversion of local currency, obligations to pay payroll tax, determination of beneficiary designation requirements, withholding procedures and handling of stock certificates that vary with applicable local requirements.  The Administrator also is authorized to determine that, to the extent permitted by U.S. Treasury 
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Regulation Section 1.423-2(f), the terms of an option granted under the Plan or an Offering to citizens or residents of a non-U.S. jurisdiction will be less favorable than the terms of options granted under the Plan or the same Offering to employees residing solely in the U.S.  Every finding, decision, and determination made by the Administrator will, to the full extent permitted by law, be final and binding upon all parties.
15.Designation of Beneficiary.
i.If permitted by the Administrator, a Participant may file a designation of a beneficiary who is to receive any Shares of Common Stock and cash, if any, from the Participant’s account under the Plan in the event of such Participant’s death subsequent to an Exercise Date on which the option is exercised but prior to delivery to such Participant of such Shares and cash.  In addition, if permitted by the Administrator, a Participant may file a designation of a beneficiary who is to receive any cash from the Participant’s account under the Plan in the event of such Participant’s death prior to exercise of the option.  If a Participant is married and the designated beneficiary is not the spouse, spousal consent will be required for such designation to be effective.
ii.Such designation of beneficiary may be changed by the Participant at any time by notice in a form determined by the Administrator.  In the event of the death of a Participant and in the absence of a beneficiary validly designated under the Plan who is living at the time of such Participant’s death, the Company will deliver such Shares and/or cash to the executor or administrator of the estate of the Participant, or if no such executor or administrator has been appointed (to the knowledge of the Company), the Company, in its discretion, may deliver such Shares and/or cash to the spouse or to any one or more dependents or relatives of the Participant, or if no spouse, dependent or relative is known to the Company, then to such other person as the Company may designate.
iii.All beneficiary designations will be in such form and manner as the Administrator may designate from time to time.  Notwithstanding Sections 15(a) and (b) above, the Company and/or the Administrator may decide not to permit such designations by Participants in non-U.S. jurisdictions to the extent permitted by U.S. Treasury Regulation Section 1.423-2(f).
16.Transferability.  Neither Contributions credited to a Participant’s account nor any rights with regard to the exercise of an option or to receive Shares of Common Stock under the Plan may be assigned, transferred, pledged or otherwise disposed of in any way (other than by will, the laws of descent and distribution or as provided in Section 15) by the Participant.  Any such attempt at assignment, transfer, pledge or other disposition will be without effect, except that the Company may treat such act as an election to withdraw funds from an Offering Period in accordance with Section 10.
17.Use of Funds.  The Company may use all Contributions received or held by it under the Plan for any corporate purpose, and the Company will not be obligated to segregate such Contributions.  Until Shares of Common Stock are issued, Participants will have only the rights of an unsecured creditor with respect to such Contributions and such Shares.
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18.Reports.  Individual accounts will be maintained for each Participant in the Plan.  Statements of account will be given to participating Eligible Employees at least annually, which statements will set forth the amounts of Contributions, the Purchase Price, the number of Shares of Common Stock purchased and the remaining cash balance, if any.
19.Adjustments, Dissolution, Liquidation, Merger, or Change in Control.
i.Adjustments.  In the event that any dividend or other distribution (whether in the form of cash, Common Stock, other securities, or other property), recapitalization, stock split, reverse stock split, reorganization, merger, consolidation, split-up, spin-off, combination, repurchase, or exchange of Common Stock or other securities of the Company, or other change in the corporate structure of the Company affecting the Common Stock occurs, the Administrator, in order to prevent dilution or enlargement of the benefits or potential benefits intended to be made available under the Plan, will, in such manner as it may deem equitable, adjust the number and class of Common Stock that may be delivered under the Plan, the Purchase Price per share and the number of shares of Common Stock covered by each option under the Plan that has not yet been exercised, and the numerical limits of Sections 7 and 13.
ii.Dissolution or Liquidation.  In the event of the proposed dissolution or liquidation of the Company, any Offering Period then in progress will be shortened by setting a New Exercise Date and will terminate immediately prior to the consummation of such proposed dissolution or liquidation, unless provided otherwise by the Administrator.  The New Exercise Date will be before the date of the Company’s proposed dissolution or liquidation.  The Administrator will notify each Participant in writing or electronically, prior to the New Exercise Date, that the Exercise Date for the Participant’s option has been changed to the New Exercise Date and that the Participant’s option will be exercised automatically on the New Exercise Date, unless prior to such date the Participant has withdrawn from the Offering Period as provided in Section 10.
iii.Merger or Change in Control.  In the event of a merger or Change in Control, each outstanding option will be assumed or an equivalent option substituted by the successor corporation or a Parent or Subsidiary of the successor corporation.  In the event that the successor corporation refuses to assume or substitute for the option, the Offering Period with respect to which such option relates will be shortened by setting a New Exercise Date on which such Offering Period will end.  The New Exercise Date will occur before the date of the Company’s proposed merger or Change in Control.  The Administrator will notify each Participant in writing or electronically prior to the New Exercise Date, that the Exercise Date for the Participant’s option has been changed to the New Exercise Date and that the Participant’s option will be exercised automatically on the New Exercise Date, unless prior to such date the Participant has withdrawn from the Offering Period as provided in Section 10.
20.Amendment or Termination.
i.The Administrator, in its sole discretion, may amend, suspend, or terminate the Plan, or any part thereof, at any time and for any reason.  If the Plan is terminated, the Administrator, in its discretion, may elect to terminate all outstanding Offering Periods either 
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immediately or upon completion of the purchase of Shares of Common Stock on the next Exercise Date (which may be sooner than originally scheduled, if determined by the Administrator in its discretion), or may elect to permit Offering Periods to expire in accordance with their terms (and subject to any adjustment pursuant to Section 19).  If the Offering Periods are terminated prior to expiration, all amounts then credited to Participants’ accounts that have not been used to purchase Shares of Common Stock will be returned to the Participants (without interest thereon, except as otherwise required under Applicable Laws, as further set forth in Section 12) as soon as administratively practicable.
ii.Without stockholder consent and without limiting Section 20(a), the Administrator will be entitled to change the Offering Periods, designate separate Offerings, limit the frequency and/or number of changes in the amount withheld during an Offering Period, establish the exchange ratio applicable to amounts withheld in a currency other than U.S. dollars, permit Contributions in excess of the amount designated by a Participant in order to adjust for delays or mistakes in the Company’s processing of properly completed Contribution elections, establish reasonable waiting and adjustment periods and/or accounting and crediting procedures to ensure that amounts applied toward the purchase of Common Stock for each Participant properly correspond with Contribution amounts, and establish such other limitations or procedures as the Administrator determines in its sole discretion advisable that are consistent with the Plan.
iii.In the event the Administrator determines that the ongoing operation of the Plan may result in unfavorable financial accounting consequences, the Administrator may, in its discretion and, to the extent necessary or desirable, modify, amend or terminate the Plan to reduce or eliminate such accounting consequence including, but not limited to:
a.amending the Plan to conform with the safe harbor definition under the Financial Accounting Standards Board Accounting Standards Codification Topic 718 (or any successor thereto), including with respect to an Offering Period underway at the time;
b.altering the Purchase Price for any Offering Period, including an Offering Period underway at the time of the change in Purchase Price;
c.shortening any Offering Period by setting a New Exercise Date, including an Offering Period underway at the time of the Administrator’s action;
d.reducing the maximum percentage of Compensation a Participant may elect to set aside as Contributions; and
e.reducing the maximum number of Shares of Common Stock a Participant may purchase during any Offering Period.
Such modifications or amendments will not require stockholder approval or the consent of any Participants.
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21.Notices.  All notices or other communications by a Participant to the Company under or in connection with the Plan will be deemed to have been duly given when received in the form and manner specified by the Company at the location, or by the person, designated by the Company for the receipt thereof.  
22.Conditions Upon Issuance of Shares.  Shares of Common Stock will not be issued with respect to an option unless the exercise of such option and the issuance and delivery of such Shares pursuant thereto will comply with all applicable provisions of law, domestic or foreign, including, without limitation, the U.S. Securities Act of 1933, as amended, the Exchange Act, the rules and regulations promulgated thereunder, and the requirements of any stock exchange upon which the Shares may then be listed, and will be further subject to the approval of counsel for the Company with respect to such compliance.  As a condition to the exercise of an option, the Company may require the person exercising such option to represent and warrant at the time of any such exercise that the Shares are being purchased only for investment and without any present intention to sell or distribute such Shares if, in the opinion of counsel for the Company, such a representation is required by any of the aforementioned applicable provisions of law.
23.Code Section 409A.  The Plan is exempt from the application of Code Section 409A and any ambiguities herein will be interpreted to so be exempt from Code Section 409A.  In furtherance of the foregoing and notwithstanding any provision in the Plan to the contrary, if the Administrator determines that an option granted under the Plan may be subject to Code Section 409A or that any provision in the Plan would cause an option under the Plan to be subject to Code Section 409A, the Administrator may amend the terms of the Plan and/or of an outstanding option granted under the Plan, or take such other action the Administrator determines is necessary or appropriate, in each case, without the Participant’s consent, to exempt any outstanding option or future option that may be granted under the Plan from or to allow any such options to comply with Code Section 409A, but only to the extent any such amendments or action by the Administrator would not violate Code Section 409A.  Notwithstanding the foregoing, the Company will have no liability to a Participant or any other party if any option to purchase Common Stock under the Plan that is intended to be exempt from or compliant with Code Section 409A is not so exempt or compliant or for any action taken by the Administrator with respect thereto.  The Company makes no representation that any option to purchase Common Stock under the Plan is compliant with Code Section 409A.
24.Term of Plan.  The Plan will become effective on the Effective Date and, unless terminated earlier pursuant to Section 20, shall have a term of twenty (20) years.
25.Stockholder Approval.  The Plan will be subject to approval by the stockholders of the Company within twelve (12) months after the date the Plan is adopted by the Board.  Such stockholder approval will be obtained in the manner and to the degree required under Applicable Laws.
26.Governing Law.  The Plan will be governed by, and construed in accordance with, the laws of the State of Delaware (except its choice-of-law provisions).
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27.No Right to Employment.  Participation in the Plan by a Participant will not be construed as giving a Participant the right to be retained as an employee of the Company or a Subsidiary or affiliate of the Company, as applicable.  Further, the Company or a Subsidiary or affiliate of the Company may dismiss a Participant from employment at any time, free from any liability or any claim under the Plan.
28.Severability.  If any provision of the Plan is or becomes or is deemed to be invalid, illegal, or unenforceable for any reason in any jurisdiction or as to any Participant, such invalidity, illegality or unenforceability will not affect the remaining parts of the Plan, and the Plan will be construed and enforced as to such jurisdiction or Participant as if the invalid, illegal or unenforceable provision had not been included.
29.Compliance with Applicable Laws.  The terms of this Plan are intended to comply with all Applicable Laws and will be construed accordingly.
    16ex101_glenboroughx-xtnpx

EXHIBIT 10.3 LIMITED PARTNERSHIP AGREEMENT   OF   TNP STRATEGIC RETAIL OPERATING PARTNERSHIP, LP   A DELAWARE LIMITED PARTNERSHIP   December 31, 2008   Source: TNP STRATEGIC RETAIL TRUST, INC., EX-10.3, 5/11/2009  |  Powered by Intelligize 

 

   TABLE OF CONTENTS                 ARTICLE 1 DEFINED TERMS     2                 ARTICLE 2 PARTNERSHIP FORMATION AND IDENTIFICATION     10   2.1   Formation     10   2.2   Name, Office and Registered Agent     10   2.3   Partners     11   2.4   Term and Dissolution     11   2.5   Filing of Certificate and Perfection of Limited Partnership     11   2.6   Certificates Describing Partnership Units and Special Partnership Units     12                 ARTICLE 3 BUSINESS OF THE PARTNERSHIP     12                 ARTICLE 4 CAPITAL CONTRIBUTIONS AND ACCOUNTS     12   4.1   Capital Contributions     12   4.2   Additional Capital Contributions and Issuances of Additional Partnership Interests     13   4.3   Additional Funding     14   4.4   Capital Accounts     15   4.5   Percentage Interests     15   4.6   No Interest On Contributions     15   4.7   Return Of Capital Contributions     15   4.8   No Third Party Beneficiary     16                 ARTICLE 5 PROFITS AND LOSSES; DISTRIBUTIONS     16   5.1   Allocation of Profit and Loss     16   5.2   Distribution of Cash     18   5.3   REIT Distribution Requirements     19   5.4   No Right to Distributions in Kind     19   5.5   Limitations on Return of Capital Contributions     19   5.6   Distributions Upon Liquidation     19   5.7   Substantial Economic Effect     20                 ARTICLE 6 RIGHTS, OBLIGATIONS AND POWERS OF THE GENERAL PARTNER     20   6.1   Management of the Partnership     20   6.2   Delegation of Authority     22   6.3   Indemnification and Exculpation of Indemnitees     22   6.4   Liability of the General Partner     24   6.5   Reimbursement of General Partner     25   6.6   Outside Activities     25   6.7   Employment or Retention of Affiliates     25   6.8   General Partner Participation     26   6.9   Title to Partnership Assets     26   6.10   Miscellaneous     26   6.11   No Duplication of Fees or Expenses     26                 ARTICLE 7 CHANGES IN GENERAL PARTNER     27   7.1   Transfer of the General Partner’s Partnership Interest     27   Source: TNP STRATEGIC RETAIL TRUST, INC., EX-10.3, 5/11/2009  |  Powered by Intelligize 

 

   ii                 7.2   Admission of a Substitute or Additional General Partner     28   7.3   Effect of Bankruptcy, Withdrawal, Death or Dissolution of a General Partner     29   7.4   Removal of a General Partner     29                 ARTICLE 8 RIGHTS AND OBLIGATIONS OF THE LIMITED PARTNERS     30   8.1   Management of the Partnership     30   8.2   Power of Attorney     30   8.3   Limitation on Liability of Limited Partners     31   8.4   Ownership by Limited Partner of Corporate General Partner or Affiliate     31   8.5   Redemption Right     31   8.6   Redemption of Special Partnership Units     33   8.7   Distribution Reinvestment Plan     33                 ARTICLE 9 TRANSFERS OF LIMITED PARTNERSHIP INTERESTS     34   9.1   Purchase for Investment     34   9.2   Restrictions on Transfer of Limited Partnership Interests     34   9.3   Admission of Substitute Limited Partner     35   9.4   Rights of Assignees of Partnership Interests     36   9.5   Effect of Bankruptcy, Death, Incompetence or Termination of a Limited Partner     36   9.6   Joint Ownership of Interests     37                 ARTICLE 10 BOOKS AND RECORDS; ACCOUNTING; TAX MATTERS     37   10.1   Books and Records     37   10.2   Custody of Partnership Funds; Bank Accounts     37   10.3   Fiscal and Taxable Year     37   10.4   Annual Tax Information and Report     38   10.5   Tax Matters Partner; Tax Elections; Special Basis Adjustments     38   10.6   Reports to Limited Partners     38                 ARTICLE 11 AMENDMENT OF AGREEMENT; MERGER     39                 ARTICLE 12 GENERAL PROVISIONS     39   12.1   Notices     39   12.2   Survival of Rights     39   12.3   Additional Documents     39   12.4   Severability     40   12.5   Entire Agreement     40   12.6   Pronouns and Plurals     40   12.7   Headings     40   12.8   Counterparts     40   12.9   Governing Law     40                 EXHIBIT A   CONTRIBUTIONS AND INTEREST     A-1                 EXHIBIT B   NOTICE OF EXERCISE OF REDEMPTION RIGHT     B-1   Source: TNP STRATEGIC RETAIL TRUST, INC., EX-10.3, 5/11/2009  |  Powered by Intelligize 

 

   LIMITED PARTNERSHIP AGREEMENT   OF   TNP STRATEGIC RETAIL OPERATING PARTNERSHIP, LP   RECITALS   This Limited Partnership Agreement (this “Agreement”) is entered into this 31st day of December, 2008, by and between TNP Strategic Retail Trust,  Inc., a Maryland corporation (the “General Partner”), and the Limited Partners set forth on Exhibit A attached hereto. Capitalized terms used herein  but not otherwise defined shall have the meanings given them in Article 1.   RECITALS   WHEREAS, the General Partner intends to qualify as a real estate investment trust under the Internal Revenue Code of 1986, as amended;   WHEREAS, TNP Strategic Retail Operating Partnership, LP (the “Partnership”), was formed on September 26, 2008, as a limited partnership under  the laws of the State of Delaware, pursuant to a Certificate of Limited Partnership filed with the Office of the Secretary of State of the State of  Delaware on September 26, 2008;   WHEREAS, the General Partner desires to conduct its current and future business through the Partnership;   WHEREAS, in furtherance of the foregoing, the General Partner desires to contribute cash or assets to the Partnership from time to time;   WHEREAS, in exchange for the General Partner’s contribution of cash or assets, the parties desire that the Partnership issue Partnership Units to  the General Partner in accordance with the terms of this Agreement;   WHEREAS, the Limited Partners will contribute cash or certain of their property to the Partnership in exchange for Partnership Units or Special  Partnership Units in accordance with the terms of this Agreement;   WHEREAS, in furtherance of the Partnership’s business, the Partnership will acquire Properties and other assets from time to time by means of the  purchase or contribution of such Properties or other assets to the Partnership by the owners thereof in exchange for Partnership Units; and   WHEREAS, the parties hereto wish to establish herein their respective rights and obligations in connection with all of the foregoing and certain  other matters.   NOW, THEREFORE, in consideration of the foregoing, the mutual covenants and agreements between the parties hereto, and other good and  valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto, intending to be legally bound, hereby  agree as follows:   Source: TNP STRATEGIC RETAIL TRUST, INC., EX-10.3, 5/11/2009  |  Powered by Intelligize 

 

   ARTICLE 1  DEFINED TERMS   The following defined terms used in this Agreement shall have the meanings specified below:   “Act” means the Delaware Revised Uniform Limited Partnership Act, as it may be amended from time to time.   “Additional Funds” has the meaning set forth in Section 4.3 hereof.   “Additional Securities” means any additional REIT Shares (other than REIT Shares issued in connection with a redemption pursuant to Section 8.5  hereof or REIT Shares issued pursuant to a dividend reinvestment plan of the General Partner) or rights, options, warrants or convertible or  exchangeable securities containing the right to subscribe for or purchase REIT Shares, as set forth in Section 4.2(a)(ii).   “Administrative Expenses” means (i) all administrative and operating costs and expenses incurred by the Partnership, (ii) those administrative  costs and expenses of the General Partner, including any salaries or other payments to directors, officers or employees of the General Partner, and  any accounting and legal expenses of the General Partner, which expenses, the Partners have agreed, are expenses of the Partnership and not the  General Partner, and (iii) to the extent not included in clause (ii) above, REIT Expenses; provided, however, that Administrative Expenses shall not  include any administrative costs and expenses incurred by the General Partner that are attributable to Properties or partnership interests in a  Subsidiary Partnership that are owned by the General Partner directly.   “Advisor or Advisors” means the Person or Persons, if any, appointed, employed or contracted with by the General Partner and responsible for  directing or performing the day-to-day business affairs of the General Partner, including any Person to whom such Advisor subcontracts  substantially all of such functions.   “Advisory Agreement” means the agreement between the General Partner, the Advisor and the other parties named therein pursuant to which the  Advisor will direct or perform the day-to-day business affairs of the General Partner.   “Affiliate” means, with respect to any Person, (i) any Person directly or indirectly, owning, controlling or holding with the power to vote 10% of  more of the outstanding voting securities of such other Person; (ii) any Person 10% or more of whose outstanding voting securities are directly or  indirectly owned, controlled or held, with the power to vote, by such other Person; (iii) any Person directly or indirectly controlling, controlled by  or under common control with such other Person; (iv) any executive officer, director, trustee or general partner of such other Person; and (v) any  legal entity for which such Person acts as an executive officer, director, trustee or general partner.   “Aggregate Share Ownership Limit” means not more than 9.8% in value of the aggregate of the outstanding shares of stock of the General Partner  of any class or series, including common shares or preferred shares.   “Agreed Value” means the fair market value of a Partner’s non-cash Capital Contribution as of the date of contribution as agreed to by such  Partner and the General Partner. The names and addresses of the Partners, number of Partnership Units or Special Partnership Units issued to each  Partner, and the Agreed Value of non-cash Capital Contributions as of the date of contribution are set forth on Exhibit A.   2   Source: TNP STRATEGIC RETAIL TRUST, INC., EX-10.3, 5/11/2009  |  Powered by Intelligize 

 

   “Agreement” means this Limited Partnership Agreement, as amended, modified supplemented or restated from time to time, as the context requires.  “Applicable Percentage” has the meaning provided in Section 8.5(b) hereof.   “Articles of Incorporation” means the Articles of Incorporation of the General Partner, as amended or restated from time to time, filed with the  Maryland State Department of Assessments and Taxation.   “Capital Account” has the meaning provided in Section 4.4 hereof.   “Capital Contribution” means the total amount of cash, cash equivalents, and the Agreed Value of any Property or other asset (other than cash)  contributed or agreed to be contributed, as the context requires, to the Partnership by each Partner pursuant to the terms of this Agreement. Any  reference to the Capital Contribution of a Partner shall include the Capital Contribution made by a predecessor holder of the Partnership Interest of  such Partner.   “Carrying Value” means, with respect to any asset of the Partnership, the asset’s adjusted net basis for federal income tax purposes or, in the case  of any asset contributed to the Partnership, the fair market value of such asset at the time of contribution, reduced by any amounts attributable to  the inclusion of liabilities in basis pursuant to Section 752 of the Code, except that the Carrying Values of all assets may, at the discretion of the  General Partner, be adjusted to equal their respective fair market values (as determined by the General Partner), in accordance with the rules set  forth in Regulations Section 1.704-1(b)(2)(iv)(f), as provided for in Section 4.4. In the case of any asset of the Partnership that has a Carrying Value  that differs from its adjusted tax basis, the Carrying Value shall be adjusted by the amount of depreciation, depletion and amortization calculated  for purposes of the definition of Profit and Loss rather than the amount of depreciation, depletion and amortization determined for federal income  tax purposes.   “Cash Amount” means an amount of cash per Partnership Unit equal to the lesser of (i) the Value of the REIT Shares Amount on the date of  receipt by the General Partner of a Notice of Redemption or (ii) the applicable Redemption Price determined by the General Partner.   “Certificate” means any instrument or document that is required under the laws of the State of Delaware, or any other jurisdiction in which the  Partnership conducts business, to be signed and sworn to by the Partners of the Partnership (either by themselves or pursuant to the power-of- attorney granted to the General Partner in Section 8.2 hereof) and filed for recording in the appropriate public offices within the State of Delaware  or such other jurisdiction to perfect or maintain the Partnership as a limited partnership, to effect the admission, withdrawal, or substitution of any  Partner of the Partnership, or to protect the limited liability of the Limited Partners as limited partners under the laws of the State of Delaware or  such other jurisdiction.   “Code” means the Internal Revenue Code of 1986, as amended, and as hereafter amended from time to time. Reference to any particular provision  of the Code shall mean that provision in the Code at the date hereof and any successor provision of the Code.   “Commission” means the U.S. Securities and Exchange Commission.   “Common Share Ownership Limit” means not more than 9.8% (in value or in number of the aggregate of the outstanding shares of stock of the  General Partner of any class or series, including common shares or preferred shares, whichever is more restrictive) of the aggregate of the REIT  Shares.   3   Source: TNP STRATEGIC RETAIL TRUST, INC., EX-10.3, 5/11/2009  |  Powered by Intelligize 

 

   “Conversion Factor” means 1.0, provided that in the event that the General Partner (i) declares or pays a dividend on its outstanding REIT Shares  in REIT Shares or makes a distribution to all holders of its outstanding REIT Shares in REIT Shares, (ii) subdivides its outstanding REIT Shares, or  (iii) combines its outstanding REIT Shares into a smaller number of REIT Shares, the Conversion Factor shall be adjusted by multiplying the  Conversion Factor by a fraction, the numerator of which shall be the number of REIT 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 REIT Shares (determined without the above assumption)  issued and outstanding on such date and, provided further, that in the event that an entity other than an Affiliate of the General Partner shall  become General Partner pursuant to any merger, consolidation or combination of the General Partner with or into another entity (the “Successor  Entity”), the Conversion Factor shall be adjusted by multiplying the Conversion Factor by the number of shares of the Successor Entity into which  one REIT Share is converted pursuant to such merger, consolidation or combination, determined as of the date of such merger, consolidation or  combination. Any adjustment to the Conversion Factor shall become effective immediately after the effective date of such event retroactive to the  record date, if any, for such event; provided, however, that if the General Partner receives a Notice of Redemption after the record date, but prior to  the effective date of such dividend, distribution, subdivision or combination, the Conversion Factor shall be determined as if the General Partner  had received the Notice of Redemption immediately prior to the record date for such dividend, distribution, subdivision or combination.   “Director” means a director of the General Partner.   “Event of Bankruptcy” as to any Person means the filing of a petition for relief as to such Person as debtor or bankrupt under the Bankruptcy  Code of 1978 or similar provision of law of any jurisdiction (except if such petition is contested by such Person and has been dismissed within 90  days); insolvency or bankruptcy of such Person as finally determined by a court proceeding; filing by such Person of a petition or application to  accomplish the same or for the appointment of a receiver or a trustee for such Person or a substantial part of his assets; commencement of any  proceedings relating to such Person as a debtor under any other reorganization, arrangement, insolvency, adjustment of debt or liquidation law of  any jurisdiction, whether now in existence or hereinafter in effect, either by such Person or by another, provided that if such proceeding is  commenced by another, such Person indicates his approval of such proceeding, consents thereto or acquiesces therein, or such proceeding is  contested by such Person and has not been finally dismissed within 90 days.   “Excepted Holder Limit” means the percentage limit of the outstanding shares of stock of the General Partner of any class or series, including  common shares or preferred shares, established by the board of directors of the General Partner for a Person that is exempt from the Aggregate  Share Ownership Limit and the Common Share Ownership Limit.   “General Partner” means TNP Strategic Retail Trust, Inc., a Maryland corporation, and any Person who becomes a substitute or additional General  Partner as provided herein, and any of their successors as General Partner.   “General Partnership Interest” means a Partnership Interest held by the General Partner that is a general partnership interest.   “Indemnitee” means (i) any Person made a party to a proceeding by reason of its status as the General Partner or a director, officer or employee of  the General Partner or the Partnership, and (ii) such other Persons (including Affiliates of the General Partner or the Partnership) as the General  Partner may designate from time to time, in its sole and absolute discretion.   4   Source: TNP STRATEGIC RETAIL TRUST, INC., EX-10.3, 5/11/2009  |  Powered by Intelligize 

 

   “Independent Directors” means a Director who is not on the date of determination, and within the last two years from the date of determination has  not been, directly or indirectly associated with the sponsor of the General Partner or the Advisor by virtue of (i) ownership of an interest in the  sponsor, the Advisor or any of their Affiliates, other than the General Partner, (ii) employment by the sponsor, the Advisor or any of their  Affiliates, (iii) service as an officer or director of the sponsor, the Advisor or any of their Affiliates, other than as a Director, (iv) performance of  services, other than as a Director, for the General Partner, (v) service as a director or trustee of more than three real estate investment trusts  organized by the sponsor or advised by the Advisor or (vi) maintenance of a material business or professional relationship with the sponsor, the  Advisor or any of their Affiliates. A business or professional relationship is considered “material” if the aggregate gross revenue derived by the  Director from the sponsor, the Advisor and their Affiliates exceeds five percent of either the Director’s annual gross revenue during either of the  last two years or the Director’s net worth on a fair market value basis. An indirect association with the sponsor or the Advisor shall include  circumstances in which a Director’s spouse, parent, child, sibling, mother- or father-in-law, son- or daughter-in-law or brother- or sister-in-law is or  has been associated with the sponsor, the Advisor, any of their Affiliates or the General Partner.   “Joint Venture” means any joint venture or general partnership arrangement in which the Partnership is a co-venturer or general partner which are  established to acquire one or more Real Estate Assets.   “Limited Partner” means any Person named as a Limited Partner on Exhibit A attached hereto, and any Person who becomes a Substitute Limited  Partner, in such Person’s capacity as a Limited Partner in the Partnership.   “Limited Partnership Interest” means the ownership interest of a Limited Partner in the Partnership at any particular time, including the right of  such Limited Partner to any and all benefits to which such Limited Partner may be entitled as provided in this Agreement and in the Act, together  with the obligations of such Limited Partner to comply with all the provisions of this Agreement and of such Act.   “Listing” means the listing of the shares of the General Partner’s stock, previously issued by the General Partner pursuant to an effective  registration statement and such shares currently registered with the Commission pursuant to an effective registration statement, on a national  securities exchange or the receipt by holders of shares of the General Partner’s stock of securities that are listed on a national securities exchange  in exchange for shares of the General Partner’s stock. Upon such Listing, the shares shall be deemed “Listed”.   “Loss” has the meaning provided in Section 5.1(i) hereof.   “Minimum Limited Partnership Interest” means the lesser of (i) 1% or (ii) if the total Capital Contributions to the Partnership exceeds $50 million,  1% divided by the ratio of the total Capital Contributions to the Partnership to $50 million; provided, however, that the Minimum Limited  Partnership Interest shall not be less than 0.2% at any time.   “Mortgages” means, in connection with any mortgage financing provided, invested in, participated in or purchased by the Partnership, all of the  notes, deeds of trust, mortgages, security interests or other evidences of indebtedness or obligations, which are secured by or, collateralized by, or  applicable to any Real Estate Assets owned by the borrowers under such notes, deeds of trust, mortgages, security interests or other evidences of  indebtedness or obligations.   5   Source: TNP STRATEGIC RETAIL TRUST, INC., EX-10.3, 5/11/2009  |  Powered by Intelligize 

 

   “Net Sales Proceeds” means (i) in the case of a transaction described in clause (A)(i) of the definition of Sale, the proceeds of any such transaction  less the amount of selling expenses incurred by or on behalf of the Partnership, including all real estate commissions, closings costs and legal fees  and expenses; (ii) in the case of a transaction described in clause (A)(ii) of the definition of Sale, the proceeds of any such transaction less the  amount of selling expenses incurred by or on behalf of the Partnership, including any legal fees and expenses and other selling expenses incurred  in connection with such transaction; (iii) in the case of a transaction described in clause (A)(iii) of the definition of Sale, the proceeds of any such  transaction actually distributed to the Partnership from the Joint Venture less the amount of any selling expenses incurred by or on behalf of the  Partnership (other than those paid by the Joint Venture); (iv) in the case of a transaction described in clause (A)(iv) of the definition of Sale, the  proceeds of any such transaction (including the aggregate of all payment under a Mortgage on or in satisfaction thereof other than regularly  schedule interest payments) less the amount of selling expenses incurred by or on behalf of the Partnership, including all commissions, closing  costs and legal fees and expenses; (v) in the case of a transaction described in clause (A)(v) of the definition of Sale, the proceeds of any such  transaction less the amount of selling expenses incurred by or on behalf of the Partnership, including any legal fees and expenses and other selling  expenses incurred in connection with such transaction; and (vi) in the case of a transaction described in clause (B) of the definition of Sale, the  proceeds of such transaction or series of transactions less all amounts generated thereby which are reinvested in one or more assets as described  in clause (B) of the definition of Sale within 180 days thereafter and less the amount of any real estate commissions, closing costs, and legal fees  and expenses and other selling expenses incurred by or allocated to the Partnership in connection with such transaction or series of transactions.  Net Sale Proceeds shall also include any amounts that the General Partner determines, in its discretion, to be economically equivalent to the  proceeds of a Sale. Net Sales Proceeds shall not include any reserves established by the Partnership in its sole discretion.   “Nonrecourse Liability” shall have the meaning set forth in Regulations Sections 1.704-2(b)(3) and 1.752-1(a)(2).   “Notice of Redemption” means the Notice of Exercise of Redemption Right substantially in the form attached as Exhibit B hereto.   “Offer” has the meaning set forth in Section 7.1(c)(ii) hereof.   “Offering” means the initial offer and sale of REIT Shares to the public.   “OP Unitholders” means all holders of Partnership Interests other than the Special OP Unitholders.   “Original Limited Partner” means the Limited Partners designated as “Original Limited Partners” on Exhibit A hereto.   “Partner” means any General Partner or Limited Partner.   “Partner Nonrecourse Debt” shall have the meaning set forth in Regulations Section 1.704-2(b)(4).   “Partner Nonrecourse Debt Minimum Gain” shall have the meaning set forth in Regulations Section 1.704-2(i)(2).   “Partner Nonrecourse Deductions” shall have the meaning set forth in Regulations Sections 1.704-2(i)(1) and 1.704-2(i)(2).   6   Source: TNP STRATEGIC RETAIL TRUST, INC., EX-10.3, 5/11/2009  |  Powered by Intelligize 

 

   “Partnership” means TNP Strategic Retail Operating Partnership, LP, a Delaware limited partnership.   “Partnership Interest” means an ownership interest in the Partnership held by either a Limited Partner or the General Partner and includes any and  all benefits to which the holder of such a Partnership Interest may be entitled as provided in this Agreement, together with all obligations of such  Person to comply with the terms and provisions of this Agreement.   “Partnership Minimum Gain” shall have the meaning set forth in Regulations Sections 1.704-2(b)(2) and 1.704-2(d).   “Partnership Record Date” means the record date established by the General Partner for the distribution of cash pursuant to Section 5.2 hereof,  which record date shall be the same as the record date established by the General Partner for a distribution to its stockholders of some or all of its  portion of such distribution.   “Partnership Unit” means a fractional, undivided share of the Partnership Interests of all Partners issued hereunder excluding the Partnership  Interests represented by Special Partnership Units. The allocation of Partnership Units among the Partners shall be as set forth on Exhibit A, as  such Exhibit may be amended from time to time.   “Percentage Interest” means the percentage ownership interest in the Partnership of each Partner, as determined by dividing the Partnership Units  owned by a Partner by the total number of Partnership Units then outstanding. The Percentage Interest of each Partner shall be as set forth on  Exhibit A, as such Exhibit may be amended from time to time.   “Person” means any individual, partnership, limited liability company, corporation, joint venture, trust or other entity.   “Profit” has the meaning provided in Section 5.1(i) hereof.   “Property” means any Real Estate Asset or other investment in which the Partnership holds an ownership interest.   “Real Estate Assets” means unimproved and improved real property and any direct or indirect interest therein, including, without limitation, fee or  leasehold interests, options, leases, partnership and joint venture interests.   “Real Estate Related Loans” means any investments in, or origination of, mortgage loans and other types of real estate related debt financing,  including, without limitation, mezzanine loans, bridge loans, convertible mortgages, wraparound mortgage loans, construction mortgage loans,  loans on leasehold interests and participations in such loans, by the General Partner or the Partnership.   “Redemption Price” means the Value of the REIT Shares Amount on the date of receipt by the General Partner of a Notice of Redemption multiplied  by any discount determined by the General Partner, including but not limited to, any discount based upon the combined number of years that the  applicable Partner has held the Partnership Units offered for redemption.   “Redemption Right” has the meaning provided in Section 8.5(a) hereof.   7   Source: TNP STRATEGIC RETAIL TRUST, INC., EX-10.3, 5/11/2009  |  Powered by Intelligize 

 

   “Regulations” means the Federal income tax regulations promulgated under the Code, as amended and as hereafter amended from time to time.  Reference to any particular provision of the Regulations shall mean that provision of the Regulations on the date hereof and any successor  provision of the Regulations.   “REIT” means a real estate investment trust under Sections 856 through 860 of the Code.   “REIT Expenses” means (i) costs and expenses relating to the formation and continuity of existence and operation of the General Partner and any  Subsidiaries thereof (which Subsidiaries shall, for purposes hereof, be included within the definition of General Partner), including taxes, fees and  assessments associated therewith, any and all costs, expenses or fees payable to any director, officer, or employee of the General Partner, (ii) costs  and expenses relating to any public offering and registration of securities by the General Partner and all statements, reports, fees and expenses  incidental thereto, including, without limitation, underwriting discounts and selling commissions applicable to any such offering of securities, and  any costs and expenses associated with any claims made by any holders of such securities or any underwriters or placement agents thereof, (iii)  costs and expenses associated with any repurchase of any securities by the General Partner, (iv) costs and expenses associated with the  preparation and filing of any periodic or other reports and communications by the General Partner under federal, state or local laws or regulations,  including filings with the Commission, (v) costs and expenses associated with compliance by the General Partner with laws, rules and regulations  promulgated by any regulatory body, including the Commission and any securities exchange, (vi) costs and expenses associated with any 401(k)  plan, incentive plan, bonus plan or other plan providing for compensation for the employees of the General Partner, (vii) costs and expenses  incurred by the General Partner relating to any issuing or redemption of Partnership Interests, and (viii) all other operating or administrative costs  of the General Partner incurred in the ordinary course of its business on behalf of or in connection with the Partnership.   “REIT Share” means a common share of beneficial interest in the General Partner (or successor entity, as the case may be).   “REIT Shares Amount” means a number of REIT Shares equal to the product of the number of Partnership Units offered for exchange by a  Tendering Party, multiplied by the Conversion Factor as adjusted to and including the Specified Redemption Date; provided that in the event the  General Partner issues to all holders of REIT Shares rights, options, warrants or convertible or exchangeable securities entitling the stockholders to  subscribe for or purchase REIT Shares, or any other securities or property (collectively, the “rights”), and the rights have not expired at the  Specified Redemption Date, then the REIT Shares Amount shall also include the rights issuable to a holder of the REIT Shares Amount of REIT  Shares on the record date fixed for purposes of determining the holders of REIT Shares entitled to rights.   “Related Party” means, with respect to any Person, any other Person whose ownership of shares of the General Partner’s capital stock would be  attributed to the first such Person under Code Section 544 (as modified by Code Section 856(h)(1)(B)).   “Sale” means (A) any transaction or series of transactions whereby: (i) the Partnership directly or indirectly (except as described in other  subsections of this definition) sells, grants, transfers, conveys, or relinquishes its ownership of any Real Estate Asset or portion thereof, including  the lease of any Real Estate Asset consisting of the building only, and including any event with respect to any Real Estate Asset which gives rise  to a significant amount of insurance proceeds or condemnation awards; (ii) the Partnership directly or indirectly (except as described in other  subsections of this definition) sells, grants, transfers, conveys, or relinquishes its ownership of all or substantially all of the interest of the  Partnership   8   Source: TNP STRATEGIC RETAIL TRUST, INC., EX-10.3, 5/11/2009  |  Powered by Intelligize 

 

   in any Joint Venture; (iii) any Joint Venture directly or indirectly (except as described in other subsections of this definition) in which the  Partnership as a co-venturer or partner sells, grants, transfers, conveys, or relinquishes its ownership of any Real Estate Asset or portion thereof,  including any event with respect to any Real Estate Asset which gives rise to insurance claims or condemnation awards; (iv) the Partnership  directly or indirectly (except as described in other subsections of this definition) sells, grants, conveys or relinquishes its interest in any Real  Estate Related Loan or portion thereof (including with respect to any Real Estate Related Loan, all payments thereunder or in satisfaction thereof  other than regularly scheduled interest payments) of amounts owed pursuant to such Real Estate Related Loan and any event which gives rise to a  significant among of insurance proceeds or similar awards; or (v) the Partnership directly or indirectly (except as described in any other  subsections of this definition) sells, grants, transfers, conveys, or relinquishes its ownership of any other investment owned, by the Partnership,  directly or indirectly through one or more of its Affiliates, and any other investment made, directly or indirectly through one of more of its  Affiliates, not previously described in this definition of any portion thereof, but (B) not including any transaction or series of transactions  specified in clause (A) (i) through (v) above in which the proceeds of such transaction or series of transactions are reinvested by the Partnership  in one or more such assets within 180 days thereafter.   “Securities Act” means the Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder.   “Service” means the United States Internal Revenue Service.   “Special OP Unitholders” means the holders of Special Partnership Units.   “Special Partnership Unit” means a unit of a series of Partnership Interests designated as Special Partnership Units issued pursuant to Section 4.1.  The number of Special Partnership Units outstanding and the Special Percentage Interests in the Partnership represented by such Special  Partnership Units are set forth on Exhibit A, as such Exhibit may be amended from time to time. A holder of a Special Partnership Unit shall have  the same rights and preferences as a holder of a Partnership Unit under this Agreement that is a Limited Partner except as set forth in Sections 5.2 (b), 7.1(c), 8.5 and 8.6.   “Special Percentage Interest” shall mean the percentage ownership interest in the Partnership of each Special OP Unitholder, as determined by  dividing the Special Partnership Units owned by each Special OP Unitholder by the total number of Special Partnership Units then outstanding.  The Special Percentage Interest of each Partner shall be as set forth on Exhibit A, as such Exhibit may be amended from time to time.   “Specified Redemption Date” means the first business day of the month that is at least sixty (60) business days after the receipt by the General  Partner of the Notice of Redemption.   “Subsidiary” means, with respect to any Person, any corporation or other entity of which a majority of (i) the voting power of the voting equity  securities or (ii) the outstanding equity interests is owned, directly or indirectly, by such Person.   “Subsidiary Partnership” means any partnership of which the partnership interests therein are owned by the General Partner or a direct or indirect  subsidiary of the General Partner.   “Substitute Limited Partner” means any Person admitted to the Partnership as a Limited Partner pursuant to Section 9.3 hereof.   9   Source: TNP STRATEGIC RETAIL TRUST, INC., EX-10.3, 5/11/2009  |  Powered by Intelligize 

 

   “Successor Entity” has the meaning provided in the definition of “Conversion Factor” contained herein.   “Survivor” has the meaning set forth in Section 7.1(d) hereof.   “Target Final Balances” shall have the meaning set forth in Section 5.1(j) hereof.   “Tax Matters Partner” has the meaning described in Section 10.5(a) hereof.   “Termination Event” means the termination or nonrenewal of the Advisory Agreement (i) in connection with a merger, sale of assets or transaction  involving the General Partner pursuant to which a majority of the directors of the General Partner then in office are replaced or removed, (ii) by the  Advisor for “good reason” (as defined in the Advisory Agreement) or (iii) by the General Partner other than for “cause” (as defined in the  Advisory Agreement).   “Tendered Units” has the meaning provided in Section 8.5(a) hereof.   “Tendering Party” has the meaning provided in Section 8.5(a) hereof.   “Transaction” has the meaning set forth in Section 7.1(c) hereof.   “Transfer” has the meaning set forth in Section 9.2(a) hereof.   “Value” means the fair market value per share of REIT Shares which will equal: (i) if REIT Shares are Listed, the average closing price per share for  the previous thirty (30) business days, (ii) if REIT Shares are not Listed, the most recent offering price per share or share equivalent of REIT  Shares, until December 31st of the year following the year in which the most recently completed offering of REIT Shares has expired, and (iii)  thereafter, such price per REIT Share as the management of the General Partner determines in good faith.   ARTICLE 2  PARTNERSHIP FORMATION AND IDENTIFICATION   2.1 Formation.   The Partnership was formed as a limited partnership pursuant to the Act, and all other pertinent laws of the State of Delaware, for the purposes and  upon the terms and conditions set forth in this Agreement.   2.2 Name, Office and Registered Agent.   The name of the Partnership is TNP Strategic Retail Operating Partnership, LP. The specified office and place of business of the Partnership shall  be 1900 Main Street, Suite 700, Irvine, California 92614. The General Partner may at any time change the location of such office, provided the  General Partner gives notice to the Partners of any such change. The name and address of the Partnership’s registered agent is Corporation  Service Company, 2711 Centerville Road, Suite 400, Wilmington, New Castle County, Delaware 19808. The sole duty of the registered agent as  such is to forward to the Partnership any notice that is served on him as registered agent.   10   Source: TNP STRATEGIC RETAIL TRUST, INC., EX-10.3, 5/11/2009  |  Powered by Intelligize 

 

   2.3 Partners.   (a) The General Partner of the Partnership is TNP Strategic Retail Trust, Inc., a Maryland corporation. The General Partner’s principal place of  business is the same as that of the Partnership.   (b) The Limited Partners are those Persons identified as Limited Partners on Exhibit A hereto, as amended from time to time.   2.4 Term and Dissolution.   (a) The term of the Partnership shall continue in full force and effect until December 31, 2038, except that the Partnership shall be dissolved upon  the first to occur of any of the following events:   (i) the occurrence of an Event of Bankruptcy as to a General Partner or the dissolution, death, removal or withdrawal of a General Partner unless the  business of the Partnership is continued pursuant to Section 7.3(b) hereof; provided that if a General Partner is on the date of such occurrence a  partnership, the dissolution of such General Partner as a result of the dissolution, death, withdrawal, removal or Event of Bankruptcy of a partner in  such partnership shall not be an event of dissolution of the Partnership if the business of such General Partner is continued by the remaining  partner or partners, either alone or with additional partners, and such General Partner and such partners comply with any other applicable  requirements of this Agreement;   (ii) the passage of ninety (90) days after the sale or other disposition of all or substantially all of the assets of the Partnership (provided that if the  Partnership receives an installment obligation as consideration for such sale or other disposition, the Partnership shall continue, unless sooner  dissolved under the provisions of this Agreement, until such time as such note or notes are paid in full);   (iii) the exchange of all Limited Partnership Interests (other than any of such interests held by the General Partner or Affiliates of the General  Partner) for REIT Shares or the securities of any other entity; or   (iv) the election by the General Partner that the Partnership should be dissolved.   (b) Upon dissolution of the Partnership (unless the business of the Partnership is continued pursuant to Section 7.3(b) hereof), the General Partner  (or its trustee, receiver, successor or legal representative) shall amend or cancel any Certificate(s) and liquidate the Partnership’s assets and apply  and distribute the proceeds thereof in accordance with Section 5.6 hereof. Notwithstanding the foregoing, the liquidating General Partner may  either (i) defer liquidation of, or withhold from distribution for a reasonable time, any assets of the Partnership (including those necessary to  satisfy the Partnership’s debts and obligations), or (ii) distribute the assets to the Partners in kind.   2.5 Filing of Certificate and Perfection of Limited Partnership.   The General Partner shall execute, acknowledge, record and file at the expense of the Partnership, any and all amendments to the Certificate(s) and  all requisite fictitious name statements and notices in such places and jurisdictions as may be necessary to cause the Partnership to be treated as a  limited   11   Source: TNP STRATEGIC RETAIL TRUST, INC., EX-10.3, 5/11/2009  |  Powered by Intelligize 

 

   partnership under, and otherwise to comply with, the laws of each state or other jurisdiction in which the Partnership conducts business.   2.6 Certificates Describing Partnership Units and Special Partnership Units.   At the request of a Limited Partner, the General Partner, at its option, may issue (but in no way is obligated to issue) a certificate summarizing the  terms of such Limited Partner’s interest in the Partnership, including the number of Partnership Units and Special Partnership Units owned and the  Percentage Interest and Special Percentage Interest represented by such Partnership Units and Special Partnership Units as of the date of such  certificate. Any such certificate (i) shall be in form and substance as approved by the General Partner, (ii) shall not be negotiable and (iii) shall bear  a legend to the following effect:   This certificate is not negotiable. The Partnership Units and Special Partnership Units represented by this certificate are governed by and  transferable only in accordance with the provisions of the Limited Partnership Agreement of TNP Strategic Retail Operating Partnership, LP, as  amended from time to time.   ARTICLE 3  BUSINESS OF THE PARTNERSHIP   The purpose and nature of the business to be conducted by the Partnership is (i) to conduct any business that may be lawfully conducted by a  limited partnership organized pursuant to the Act, provided, however, that such business shall be limited to and conducted in such a manner as to  permit the General Partner at all times to qualify as a REIT, unless the General Partner otherwise ceases to qualify as a REIT, and in a manner such  that the General Partner will not be subject to any taxes under Section 857 or 4981 of the Code, (ii) to enter into any partnership, joint venture or  other similar arrangement to engage in any of the foregoing or the ownership of interests in any entity engaged in any of the foregoing and (iii) to  do anything necessary or incidental to the foregoing. In connection with the foregoing, and without limiting the General Partner’s right in its sole  and absolute discretion to qualify or cease qualifying as a REIT, the Partners acknowledge that the General Partner intends to qualify as a REIT for  federal income tax purposes and that, upon such qualification, the avoidance of income and excise taxes on the General Partner inures to the  benefit of all the Partners and not solely to the General Partner. Notwithstanding the foregoing, the Limited Partners agree that the General Partner  may terminate its status as a REIT under the Code at any time to the full extent permitted under the Articles of Incorporation. The General Partner  on behalf of the Partnership shall also be empowered to do any and all acts and things necessary or prudent to ensure that the Partnership will not  be classified as a “publicly traded partnership” for purposes of Section 7704 of the Code.   ARTICLE 4  CAPITAL CONTRIBUTIONS AND ACCOUNTS   4.1 Capital Contributions.   The General Partner and the initial Limited Partners have made capital contributions to the Partnership in exchange for the Partnership Interests set  forth opposite their names on Exhibit A, as such Exhibit may be amended from time to time.   12   Source: TNP STRATEGIC RETAIL TRUST, INC., EX-10.3, 5/11/2009  |  Powered by Intelligize 

 

   4.2 Additional Capital Contributions and Issuances of Additional Partnership Interests.   Except as provided in this Section 4.2 or in Section 4.3, the Partners shall have no right or obligation to make any additional Capital Contributions  or loans to the Partnership. The General Partner may contribute additional capital to the Partnership, from time to time, and receive additional  Partnership Interests in respect thereof, in the manner contemplated in this Section 4.2.   (a) Issuances of Additional Partnership Interests.   (i) General. The General Partner is hereby authorized to cause the Partnership to issue such additional Partnership Interests in the form of  Partnership Units for any Partnership purpose at any time or from time to time, including, but not limited to, Partnership Units issued in connection  with acquisitions of properties, to the Partners (including the General Partner) or to other Persons for such consideration and on such terms and  conditions as shall be established by the General Partner in its sole and absolute discretion, all without the approval of any Limited Partners. Any  additional Partnership Interests issued thereby may be issued in one or more classes, or one or more series of any of such classes, with such  designations, preferences and relative, participating, optional or other special rights, powers and duties, including rights, powers and duties senior  to Limited Partnership Interests, all as shall be determined by the General Partner in its sole and absolute discretion and without the approval of  any Limited Partner, subject to Delaware law, including, without limitation, (i) the allocations of items of Partnership income, gain, loss, deduction  and credit to each such class or series of Partnership Interests; (ii) the right of each such class or series of Partnership Interests to share in  Partnership distributions; and (iii) the rights of each such class or series of Partnership Interests upon dissolution and liquidation of the  Partnership; provided, however, that no additional Partnership Interests shall be issued to the General Partner unless:   (1) (A) the additional Partnership Interests are issued in connection with an issuance of REIT Shares of or other interests in the General Partner,  which shares or interests have designations, preferences and other rights, all such that the economic interests are substantially similar to the  designations, preferences and other rights of the additional Partnership Interests issued to the General Partner by the Partnership in accordance  with this Section 4.2 and (B) the General Partner shall make a Capital Contribution to the Partnership in an amount equal to the proceeds raised in  connection with the issuance of such REIT Shares of or other interests in the General Partner;   (2) the additional Partnership Interests are issued in exchange for property owned by the General Partner with a fair market value, as determined by  the General Partner, in good faith, equal to the value of the Partnership Interests; or   (3) the additional Partnership Interests are issued to all Partners holding Partnership Units in proportion to their respective Percentage Interests.   Without limiting the foregoing, the General Partner is expressly authorized to cause the Partnership to issue Partnership Units for less than fair  market value, so long as the General Partner concludes in good faith that such issuance is in the best interests of the General Partner and the  Partnership.   (ii) Upon Issuance of Additional Securities. The General Partner shall not issue any Additional Securities other than to all holders of REIT Shares,  unless (A) the General Partner shall cause the Partnership to issue to the General Partner, as the General Partner may designate, 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   13   Source: TNP STRATEGIC RETAIL TRUST, INC., EX-10.3, 5/11/2009  |  Powered by Intelligize 

 

   substantially similar to those of the Additional Securities, and (B) the General Partner contributes the proceeds from the issuance of such  Additional Securities and from any exercise of rights contained in such Additional Securities, directly and through the General Partner, to the  Partnership; provided, however, that the General Partner is allowed to issue Additional Securities in connection with an acquisition of a Property  to be held directly by the General Partner, but if and only if, such direct acquisition and issuance of Additional Securities have been approved and  determined to be in the best interests of the General Partner and the Partnership by a majority of the Independent Directors. Without limiting the  foregoing, the General Partner is expressly authorized to issue Additional Securities for less than fair market value, and to cause the Partnership to  issue to the General Partner corresponding Partnership Interests, so long as (x) the General Partner concludes in good faith that such issuance is in  the best interests of the General Partner and the Partnership, including without limitation, the issuance of REIT Shares and corresponding  Partnership Units pursuant to an employee share purchase plan providing for employee purchases of REIT Shares at a discount from fair market  value or employee stock options that have an exercise price that is less than the fair market value of the REIT Shares, either at the time of issuance  or at the time of exercise, and (y) the General Partner contributes all proceeds from such issuance to the Partnership. For example, in the event the  General Partner issues REIT Shares for a cash purchase price and contributes all of the proceeds of such issuance to the Partnership as required  hereunder, the General Partner shall be issued a number of additional Partnership Units equal to the product of (A) the number of such REIT  Shares issued by the General Partner, the proceeds of which were so contributed, multiplied by (B) a fraction, the numerator of which is 100%, and  the denominator of which is the Conversion Factor in effect on the date of such contribution.   (b) Certain Deemed Contributions of Proceeds of Issuance of REIT Shares. In connection with any and all issuances of REIT Shares, the General  Partner shall make Capital Contributions to the Partnership of the proceeds therefrom, provided that if the proceeds actually received and  contributed by the General Partner are less than the gross proceeds of such issuance as a result of any underwriter’s discount or other expenses  paid or incurred in connection with such issuance, then the General Partner shall be deemed to have made Capital Contributions to the Partnership  in the aggregate amount of the gross proceeds of such issuance and the Partnership shall be deemed simultaneously to have paid such offering  expenses in accordance with Section 6.5 hereof and in connection with the required issuance of additional Partnership Units to the General Partner  for such Capital Contributions pursuant to Section 4.2(a) hereof.   (c) Minimum Limited Partnership Interest. In the event that either a redemption pursuant to Section 8.5 hereof or additional Capital Contributions  by the General Partner would result in the Limited Partners, in the aggregate, owning less than the Minimum Limited Partnership Interest, the  General Partner and the Limited Partners (other than the Limited Partners that own only Special Partnership Units) shall form another partnership  and contribute sufficient Limited Partnership Interests (other than Special Partnership Units) together with such other Limited Partners so that the  limited partners of such partnership own at least the Minimum Limited Partnership Interest.   4.3 Additional Funding.   If the General Partner determines that it is in the best interests of the Partnership to provide for additional Partnership funds (“Additional Funds”)  for any Partnership purpose, the General Partner may (i) cause the Partnership to obtain such funds from outside borrowings or (ii) elect to have  the General Partner or any of its Affiliates provide such Additional Funds to the Partnership through loans or otherwise, provided, however, that  the Partnership may not borrow money from its Affiliates, unless a majority of the Directors of the General Partner (including a majority of  Independent Directors) not otherwise interested in such transaction approve the transaction as being fair, competitive, and   14   Source: TNP STRATEGIC RETAIL TRUST, INC., EX-10.3, 5/11/2009  |  Powered by Intelligize 

 

   commercially reasonable and no less favorable to the Partnership than loans between unaffiliated parties under the same circumstances.   4.4 Capital Accounts.   A separate capital account (a “Capital Account”) shall be established and maintained for each Partner in accordance with Regulations Section  1.704-1(b)(2)(iv). If (i) a new or existing Partner acquires an additional Partnership Interest in exchange for more than a de minimis Capital  Contribution, (ii) the Partnership distributes to a Partner more than a de minimis amount of Partnership property or money as consideration for a  Partnership Interest, or (iii) the Partnership is liquidated within the meaning of Regulation Section 1.704-1(b)(2)(ii)(g), the General Partner shall  revalue the Property of the Partnership to its fair market value (as determined by the General Partner, in its sole and absolute discretion, and taking  into account Section 7701(g) of the Code) in accordance with Regulations Section 1.704-1(b)(2)(iv)(f). When the Partnership’s Property is revalued  by the General Partner, the Capital Accounts of the Partners shall be adjusted in accordance with Regulations Sections 1.704-1(b)(2)(iv)(f) and (g),  which generally require such Capital Accounts to be adjusted to reflect the manner in which the unrealized gain or loss inherent in such Property  (that has not been reflected in the Capital Accounts previously) would be allocated among the Partners pursuant to Section 5.1 if there were a  taxable disposition of such Property for its fair market value (as determined by the General Partner, in its sole and absolute discretion, and taking  into account Section 7701(g) of the Code) on the date of the revaluation.   4.5 Percentage Interests.   If the number of outstanding Partnership Units increases or decreases during a taxable year, each Partner’s Percentage Interest shall be adjusted  by the General Partner effective as of the effective date of each such increase or decrease to a percentage equal to the number of Partnership Units  held by such Partner divided by the aggregate number of Partnership Units outstanding after giving effect to such increase or decrease. If the  Partners’ Percentage Interests are adjusted pursuant to this Section 4.5, the Profits and Losses for the taxable year in which the adjustment occurs  shall be allocated between the part of the year ending on the day when the Partnership’s Property is revalued by the General Partner and the part  of the year beginning on the following day either (i) as if the taxable year had ended on the date of the adjustment or (ii) based on the number of  days in each part. The General Partner, in its sole and absolute discretion, shall determine which method shall be used to allocate Profits and  Losses for the taxable year in which the adjustment occurs. The allocation of Profits and Losses for the earlier part of the year shall be based on  the Percentage Interests before adjustment, and the allocation of Profits and Losses for the later part shall be based on the adjusted Percentage  Interests.   4.6 No Interest on Contributions.   No Partner shall be entitled to interest on its Capital Contribution.   4.7 Return of Capital Contributions.   No Partner shall be entitled to withdraw any part of its Capital Contribution or its Capital Account or to receive any distribution from the  Partnership, except as specifically provided in this Agreement. Except as otherwise provided herein, there shall be no obligation to return to any  Partner or withdrawn Partner any part of such Partner’s Capital Contribution for so long as the Partnership continues in existence.   15   Source: TNP STRATEGIC RETAIL TRUST, INC., EX-10.3, 5/11/2009  |  Powered by Intelligize 

 

   4.8 No Third Party Beneficiary.   No creditor or other third party having dealings with the Partnership shall have the right to enforce the right or obligation of any Partner to make  Capital Contributions or loans or to pursue any other right or remedy hereunder or at law or in equity, it being understood and agreed that the  provisions of this Agreement shall be solely for the benefit of, and may be enforced solely by, the parties hereto and their respective successors  and assigns. None of the rights or obligations of the Partners herein set forth to make Capital Contributions or loans to the Partnership shall be  deemed an asset of the Partnership for any purpose by any creditor or other third party, nor may such rights or obligations be sold, transferred or  assigned by the Partnership or pledged or encumbered by the Partnership to secure any debt or other obligation of the Partnership or of any of the  Partners. In addition, it is the intent of the parties hereto that no distribution to any Limited Partner shall be deemed a return of money or other  Property in violation of the Act. However, if any court of competent jurisdiction holds that, notwithstanding the provisions of this Agreement, any  Limited Partner is obligated to return such money or Property, such obligation shall be the obligation of such Limited Partner and not of the  General Partner. Without limiting the generality of the foregoing, a deficit Capital Account of a Partner shall not be deemed to be a liability of such  Partner nor an asset or Property of the Partnership.   ARTICLE 5  PROFITS AND LOSSES; DISTRIBUTIONS   5.1 Allocation of Profit and Loss.   (a) General. Subject to any special allocations made pursuant to this Section 5.1, Profit and Loss (or items thereof) of the Partnership for each  fiscal year or other applicable period of the Partnership shall be allocated to the Partners in accordance with their Percentage Interests.   (b) Special Allocation with Respect to Sales. The items of Profit and Loss of the Partnership for each fiscal year or other applicable period from  Sales shall be allocated among the Partners in a manner that will, as nearly as possible (after giving effect to the allocations under Section 5.1(a),  5.1(e) and 5.1(f), cause the Capital Account balance of each Partner at the end of such fiscal year or other applicable period to equal (i) the amount  of the hypothetical distribution that such Partner would receive if the Partnership were liquidated on the last day of such period and all assets of  the Partnership, including cash, were sold for cash equal to their Carrying Value, taking into account any adjustments thereto for such period, all  liabilities of the Partnership were satisfied in full in cash according to their terms (limited with respect to each Nonrecourse Liability to the Carrying  Value of the assets securing such liability) and Net Sales Proceeds (after satisfaction of such liabilities) were distributed in full pursuant to Section  5.2(b)(i), minus (ii) the sum of such Partner’s share of Partnership Minimum Gain and Partner Nonrecourse Debt Minimum Gain and the amount, if  any and without duplication, that the Partner would be obligated to contribute to the capital of the Partnership, all computed as of the date of the  hypothetical sale of assets.   (c) Nonrecourse Deductions; Minimum Gain Chargeback. In the event there is a net decrease in Partnership Minimum Gain during any fiscal year,  the “minimum gain chargeback” described in Regulations Section 1.704-2(f) and Regulations Section 1.704-2(g) shall apply. In the event there is a  net decrease in Partner Nonrecourse Debt Minimum Gain during any fiscal year, the “partner minimum gain chargeback” described in Regulations  Section 1.704-2(i)(4) shall apply.   16   Source: TNP STRATEGIC RETAIL TRUST, INC., EX-10.3, 5/11/2009  |  Powered by Intelligize 

 

   (d) Qualified Income Offset. This Section 5.1(d) incorporates the “qualified income offset” set forth in Regulations Section 1.704-1(b)(2)(ii)(d) as if  those provisions were fully set forth in this Section 5.1(d).   (e) Capital Account Deficits. Loss (or items of Loss) shall not be allocated to a Limited Partner to the extent that such allocation would cause or  increase a deficit in such Partner’s Capital Account at the end of any fiscal year (after reduction to reflect the items described in Regulations  Section 1.704-1(b)(2)(ii)(d)(4), (5) and (6)) to exceed the sum of such Partner’s shares of Partnership Minimum Gain and Partner Nonrecourse Debt  Minimum Gain, as determined in accordance with Regulations Sections 1.704-2(g)(1) and 1.704-2(i)(5). Any Loss in excess of that limitation shall be  allocated to the General Partner. After the occurrence of an allocation of Loss to the General Partner in accordance with this Section 5.1(e), to the  extent permitted by Regulations Section 1.704-1(b), Profit shall be allocated to such Partner in an amount necessary to offset the Loss previously  allocated to such Partner under this Section 5.1(e).   (f) Nonrecourse Deductions. Nonrecourse Deductions for any fiscal year shall be allocated to Partners pro rata in proportion to their Percentage  Interests.   (g) Partner Nonrecourse Deductions. The Partner Nonrecourse Deductions of the Partnership (as determined under Regulations Section 1.704-2(i) (2)) shall be allocated each year to the Partner that bears the economic risk of loss (within the meaning of Regulations Section 1.752-2) with respect  to the Partner Nonrecourse Debt to which such Partner Nonrecourse Deductions are attributable.   (h) Allocations Between Transferor and Transferee. If a Partner transfers any part or all of its Partnership Interest, the distributive shares of the  various items of Profit and Loss allocable among the Partners during such fiscal year of the Partnership shall be allocated between the transferor  and the transferee Partner either (i) as if the Partnership’s fiscal year had ended on the date of the transfer, or (ii) based on the number of days of  such fiscal year that each was a Partner without regard to the results of Partnership activities in the respective portions of such fiscal year in which  the transferor and the transferee were Partners. The General Partner, in its sole and absolute discretion, shall determine which method shall be used  to allocate the distributive shares of the various items of Profit and Loss between the transferor and the transferee Partner.   (i) Definition of Profit and Loss. “Profit” and “Loss” and any items of income, gain, expense, or loss referred to in this Agreement shall be  determined in accordance with federal income tax accounting principles, as modified by Regulations Section 1.704-1(b)(2)(iv), except that Profit and  Loss shall not include items of income, gain and expense that are specially allocated pursuant to Sections 5.1(d), 5.1(e), 5.1(f) or 5.1(g). All  allocations of Profit and Loss (and all items contained therein) for federal income tax purposes shall be identical to all allocations of such items set  forth in this Section 5.1, except as otherwise required by Section 704(c) of the Code and Regulations Section 1.704-1(b)(4). The General Partner  shall have the authority to elect the method to be used by the Partnership for allocating items of income, gain, and expense as required by Section  704(c) of the Code including a method that may result in a Partner receiving a disproportionately larger share of the Partnership tax depreciation  deductions, and such election shall be binding on all Partners.   (j) Target Final Balances. The allocation provisions of this Agreement are intended to produce final Capital Account balances that are at levels  (“Target Final Balances”) that permit liquidating distributions that are made in accordance with such final Capital Account balances to be equal to  the distributions that would occur under Section 5.2 hereof if liquidation proceeds were distributed pursuant to Section 5.2. To the extent the  allocation provisions of this Agreement would not produce the Target Final Balances, the Partners agree to take such actions as are necessary to  amend such allocation   17   Source: TNP STRATEGIC RETAIL TRUST, INC., EX-10.3, 5/11/2009  |  Powered by Intelligize 

 

   provisions to produce such Target Final Balances. In furtherance of the foregoing, the General Partner is expressly authorized and directed to make  such allocations of income, gain, loss and deduction (including items of gross income, gain, loss and deduction) in the year of liquidation of the  Partnership so as to cause the Capital Accounts of the Partners that determine the amounts that are distributed to the Partners under Section 5.6 to  be equal to the Target Final Balances.   5.2 Distribution of Cash.   (a) The Partnership shall distribute cash on a quarterly (or, at the election of the General Partner, more frequent) basis, in an amount determined by  the General Partner in its sole and absolute discretion, to the Partners who are Partners on the Partnership Record Date with respect to such  quarter (or other distribution period) in accordance with Section 5.2(b); provided, however, that if a new or existing Partner acquires an additional  Partnership Interest in exchange for a Capital Contribution on any date other than a Partnership Record Date, the cash distribution attributable to  such additional Partnership Interest relating to the Partnership Record Date next following the issuance of such additional Partnership Interest  shall be reduced in the proportion equal to one minus (i) the number of days that such additional Partnership Interest is held by such Partner bears  to (ii) the number of days between such Partnership Record Date and the immediately preceding Partnership Record Date.   (b) Except for distributions pursuant to Section 5.6 of this Agreement in connection with the dissolution and liquidation of the Partnership and  subject to the provisions of Section 5.2(c), 5.2(d), 5.3 and 5.5 of this Agreement, distributions shall be made in accordance with the following  provisions:   (i) all distributions of Net Sales Proceeds shall be made: (A) first, 100% to the OP Unitholders in accordance with their respective Percentage  Interests on the Partnership Record Date until the OP Unitholders have received cumulative distributions under this Section 5.2(b) equal to the  aggregate Capital Contributions made by the OP Unitholders to the Partnership plus a cumulative, noncompounded pre-tax rate of return thereon  of 10.0% per annum, determined by taking into account the dates on which all such Capital Contributions and distributions were made and (B)  second, (1) 85.0% to the OP Unitholders, in accordance with their respective Percentage Interests on the Partnership Record Date and (2) 15% to  the Special OP Unitholders in accordance with their respective Special Percentage Interests on the Partnership Record Date; and   (ii) all distributions of cash other than Net Sales Proceeds shall be made to the OP Unitholders in accordance with their respective Percentage  Interests on the Partnership Record Date.   (c) Notwithstanding any other provision of this Agreement, the General Partner is authorized to take any action that it determines to be necessary  or appropriate to cause the Partnership to comply with any withholding requirements established under the Code or any other federal, state or  local law including, without limitation, pursuant to Sections 1441, 1442, 1445 and 1446 of the Code. To the extent that the Partnership is required to  withhold and pay over to any taxing authority any amount resulting from the allocation or distribution of income to any Partner or assignee  (including by reason of Section 1446 of the Code), either (i) if the actual amount to be distributed to the Partner equals or exceeds the amount  required to be withheld by the Partnership, the amount withheld shall be treated as a distribution of cash in the amount of such withholding to  such Partner, or (ii) if the actual amount to be distributed to the Partner is less than the amount required to be withheld by the Partnership, the  actual amount shall be treated as a distribution of cash in the amount of such withholding and the additional amount required to be withheld shall  be treated as a loan (a “Partnership Loan”) from the Partnership to the Partner on the day the Partnership pays over such amount to a taxing  authority. A Partnership Loan   18   Source: TNP STRATEGIC RETAIL TRUST, INC., EX-10.3, 5/11/2009  |  Powered by Intelligize 

 

   shall be repaid through withholding by the Partnership with respect to subsequent distributions to the applicable Partner or assignee. In the event  that a Limited Partner (a “Defaulting Limited Partner”) fails to pay any amount owed to the Partnership with respect to the Partnership Loan within  fifteen (15) days after demand for payment thereof is made by the Partnership on the Limited Partner, the General Partner, in its sole and absolute  discretion, may elect to make the payment to the Partnership on behalf of such Defaulting Limited Partner. In such event, on the date of payment,  the General Partner shall be deemed to have extended a loan (a “General Partner Loan”) to the Defaulting Limited Partner in the amount of the  payment made by the General Partner and shall succeed to all rights and remedies of the Partnership against the Defaulting Limited Partner as to  that amount. Without limitation, the General Partner shall have the right to receive any distributions that otherwise would be made by the  Partnership to the Defaulting Limited Partner until such time as the General Partner Loan has been paid in full, and any such distributions so  received by the General Partner shall be treated as having been received by the Defaulting Limited Partner and immediately paid to the General  Partner.   Any amounts treated as a Partnership Loan or a General Partner Loan pursuant to this Section 5.2(c) shall bear interest at the lesser of (i) the base  rate on corporate loans at large United States money center commercial banks, as published from time to time in The Wall Street Journal, or (ii) the  maximum lawful rate of interest on such obligation, such interest to accrue from the date the Partnership or the General Partner, as applicable, is  deemed to extend the loan until such loan is repaid in full.   (d) In no event may a Partner receive a distribution of cash with respect to a Partnership Unit if such Partner is entitled to receive a cash  distribution as the holder of record of a REIT Share for which all or part of such Partnership Unit has been or will be exchanged.   5.3 REIT Distribution Requirements.   The General Partner shall use its commercially reasonable efforts to cause the Partnership to distribute amounts sufficient to enable the General  Partner to make stockholder distributions that will allow the General Partner to (i) meet its distribution requirement for qualification as a REIT as set  forth in Section 857 of the Code and (ii) avoid any federal income or excise tax liability imposed by the Code.   5.4 No Right to Distributions in Kind.   No Partner shall be entitled to demand Property other than cash in connection with any distributions by the Partnership.   5.5 Limitations on Return of Capital Contributions.   Notwithstanding any of the provisions of this Article 5, no Partner shall have the right to receive, and the General Partner shall not have the right  to make, a distribution that includes a return of all or part of a Partner’s Capital Contributions, unless after giving effect to the return of a Capital  Contribution, the sum of all Partnership liabilities, other than the liabilities to a Partner for the return of his Capital Contribution, does not exceed  the fair market value of the Partnership’s assets.   5.6 Distributions Upon Liquidation.   Upon liquidation of the Partnership, after payment of, or adequate provision for, debts and obligations of the Partnership, including any Partner  loans, any remaining assets of the Partnership shall be distributed to all Partners in accordance with Section 5.2(b). To the extent deemed advisable  by the General Partner, appropriate arrangements (including the use of a liquidating trust) may be made to assure that adequate funds are available  to pay any contingent debts or obligations.   19   Source: TNP STRATEGIC RETAIL TRUST, INC., EX-10.3, 5/11/2009  |  Powered by Intelligize 

 

   5.7 Substantial Economic Effect.   It is the intent of the Partners that the allocations of Profit and Loss under this Agreement have substantial economic effect (or be consistent with  the Partners’ interests in the Partnership in the case of the allocation of losses attributable to nonrecourse debt) within the meaning of Section 704 (b) of the Code as interpreted by the Regulations promulgated pursuant thereto. Article 5 and other relevant provisions of this Agreement shall be  interpreted in a manner consistent with such intent.   ARTICLE 6  RIGHTS, OBLIGATIONS AND  POWERS OF THE GENERAL PARTNER   6.1 Management of the Partnership.   (a) Except as otherwise expressly provided in this Agreement, the General Partner shall have full, complete and exclusive discretion to manage and  control the business of the Partnership for the purposes herein stated, and shall make all decisions affecting the business and assets of the  Partnership. Subject to the restrictions specifically contained in this Agreement, the powers of the General Partner shall include, without limitation,  the authority to take the following actions on behalf of the Partnership:   (i) to acquire, purchase, own, operate, lease and dispose of any real property and any other property or assets including, but not limited to, notes  and mortgages and other real estate related investments that the General Partner determines are necessary or appropriate or in the best interests of  the business of the Partnership;   (ii) to construct buildings and make other improvements on the properties owned or leased by the Partnership;   (iii) to authorize, issue, sell, redeem or otherwise purchase any Partnership Interests or any securities (including secured and unsecured debt  obligations of the Partnership, debt obligations of the Partnership convertible into any class or series of Partnership Interests, or options, rights,  warrants or appreciation rights relating to any Partnership Interests) of the Partnership;   (iv) to borrow or lend money for the Partnership, issue or receive evidences of indebtedness in connection therewith, refinance, increase the  amount of, modify, amend or change the terms of, or extend the time for the payment of, any such indebtedness, and secure such indebtedness by  mortgage, deed of trust, pledge or other lien on the Partnership’s assets;   (v) to pay, either directly or by reimbursement, for all operating costs and general administrative expenses of the Partnership to third parties or to  the General Partner or its Affiliates as set forth in this Agreement;   (vi) to guarantee or become a co-maker of indebtedness of the General Partner or any Subsidiary thereof, refinance, increase the amount of, modify,  amend or change the terms of, or extend the time for the payment of, any such guarantee or indebtedness, and secure such guarantee or  indebtedness by mortgage, deed of trust, pledge or other lien on the Partnership’s assets;   (vii) to use assets of the Partnership (including, without limitation, cash on hand) for any purpose consistent with this Agreement, including,  without limitation, payment, either   20   Source: TNP STRATEGIC RETAIL TRUST, INC., EX-10.3, 5/11/2009  |  Powered by Intelligize 

 

   directly or by reimbursement, of all operating costs and general administrative expenses of the General Partner, the Partnership or any Subsidiary  of either, to third parties or to the General Partner as set forth in this Agreement;   (viii) to lease all or any portion of any of the Partnership’s assets, whether or not the terms of such leases extend beyond the termination date of  the Partnership and whether or not any portion of the Partnership’s assets so leased are to be occupied by the lessee, or, in turn, subleased in  whole or in part to others, for such consideration and on such terms as the General Partner may determine;   (ix) to prosecute, defend, arbitrate, or compromise any and all claims or liabilities in favor of or against the Partnership, on such terms and in such  manner as the General Partner may reasonably determine, and similarly to prosecute, settle or defend litigation with respect to the Partners, the  Partnership, or the Partnership’s assets;   (x) to file applications, communicate, and otherwise deal with any and all governmental agencies having jurisdiction over, or in any way affecting,  the Partnership’s assets or any other aspect of the Partnership business;   (xi) to make or revoke any election permitted or required of the Partnership by any taxing authority;   (xii) to maintain such insurance coverage for public liability, fire and casualty, and any and all other insurance for the protection of the Partnership,  for the conservation of Partnership assets, or for any other purpose convenient or beneficial to the Partnership, in such amounts and such types,  as it shall determine from time to time;   (xiii) to determine whether or not to apply any insurance proceeds for any Property to the restoration of such Property or to distribute the same;   (xiv) to establish one or more divisions of the Partnership, to hire and dismiss employees of the Partnership or any division of the Partnership, and  to retain legal counsel, accountants, consultants, real estate brokers and such other persons as the General Partner may deem necessary or  appropriate in connection with the Partnership business and to pay therefor such remuneration as the General Partner may deem reasonable and  proper;   (xv) to retain other services of any kind or nature in connection with the Partnership business, and to pay therefor such remuneration as the  General Partner may deem reasonable and proper;   (xvi) to negotiate and conclude agreements on behalf of the Partnership with respect to any of the rights, powers and authority conferred upon the  General Partner;   (xvii) to maintain accurate accounting records and to file promptly all federal, state and local income tax returns on behalf of the Partnership;   (xviii) to distribute Partnership cash or other Partnership assets in accordance with this Agreement;   21   Source: TNP STRATEGIC RETAIL TRUST, INC., EX-10.3, 5/11/2009  |  Powered by Intelligize 

 

   (xix) to form or acquire an interest in, and contribute Property to, any further limited or general partnerships, joint ventures or other relationships  that it deems desirable (including, without limitation, the acquisition of interests in, and the contributions of Property to, its Subsidiaries and any  other Person in which it has an equity interest from time to time);   (xx) to establish Partnership reserves for working capital, capital expenditures, contingent liabilities or any other valid Partnership purpose;   (xxi) to merge, consolidate or combine the Partnership with or into another Person;   (xxii) to do any and all acts and things necessary or prudent to ensure that the Partnership will not be classified as a “publicly traded partnership”  for purposes of Section 7704 of the Code; and   (xxiii) to take such other action, execute, acknowledge, swear to or deliver such other documents and instruments, and perform any and all other  acts that the General Partner deems necessary or appropriate for the formation, continuation and conduct of the business and affairs of the  Partnership (including, without limitation, all actions consistent with allowing the General Partner at all times to qualify as a REIT unless the  General Partner voluntarily terminates its REIT status) and to possess and enjoy all of the rights and powers of a general partner as provided by  the Act.   (b) Except as otherwise provided herein, to the extent the duties of the General Partner require expenditures of funds to be paid to third parties, the  General Partner shall not have any obligations hereunder except to the extent that Partnership funds are reasonably available to it for the  performance of such duties, and nothing herein contained shall be deemed to authorize or require the General Partner, in its capacity as such, to  expend its individual funds for payment to third parties or to undertake any individual liability or obligation on behalf of the Partnership.   6.2 Delegation of Authority.   The General Partner may delegate any or all of its powers, rights and obligations hereunder, and may appoint, employ, contract or otherwise deal  with any Person for the transaction of the business of the Partnership, which Person may, under supervision of the General Partner, perform any  acts or services for the Partnership as the General Partner may approve.   6.3 Indemnification and Exculpation of Indemnitees.   (a) The Partnership shall indemnify an Indemnitee from and against any and all losses, claims, damages, liabilities, joint or several, expenses  (including reasonable legal fees and expenses), judgments, fines, settlements, and other amounts arising from any and all claims, demands, actions,  suits or proceedings, civil, criminal, administrative or investigative, that relate to the operations of the Partnership as set forth in this Agreement in  which any Indemnitee may be involved, or is threatened to be involved, as a party or otherwise, unless it is established that: (i) the act or omission  of the Indemnitee was material to the matter giving rise to the proceeding and either was committed in bad faith or was the result of active and  deliberate dishonesty; (ii) the Indemnitee actually received an improper personal benefit in money, property or services; or (iii) in the case of any  criminal proceeding, the Indemnitee had reasonable cause to believe that the act or omission was unlawful. Any indemnification pursuant to this  Section 6.3 shall be made only out of the assets of the Partnership.   22   Source: TNP STRATEGIC RETAIL TRUST, INC., EX-10.3, 5/11/2009  |  Powered by Intelligize 

 

   (b) The Partnership shall reimburse an Indemnitee for reasonable expenses incurred by an Indemnitee who is a party to a proceeding in advance of  the final disposition of the proceeding upon receipt by the Partnership of (i) a written affirmation by the Indemnitee of the Indemnitee’s good faith  belief that the standard of conduct necessary for indemnification by the Partnership as authorized in this Section 6.3 has been met, and (ii) a  written undertaking by or on behalf of the Indemnitee to repay the amount if it shall ultimately be determined that the standard of conduct has not  been met.   (c) The indemnification provided by this Section 6.3 shall be in addition to any other rights to which an 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.   (d) The Partnership may purchase and maintain insurance, on behalf of the Indemnitees and such other Persons as the General Partner shall  determine, against any liability that may be asserted against or expenses that may be incurred by such Person in connection with the Partnership’s  activities, regardless of whether the Partnership would have the power to indemnify such Person against such liability under the provisions of this  Agreement.   (e) For purposes of this Section 6.3, the Partnership shall be deemed to have requested an Indemnitee to serve as fiduciary of an employee benefit  plan whenever the performance by it of its duties to the Partnership also imposes duties on, or otherwise involves services by, it to the plan or  participants or beneficiaries of the plan; excise taxes assessed on an Indemnitee with respect to an employee benefit plan pursuant to applicable  law shall constitute fines within the meaning of this Section 6.3; and actions taken or omitted by the Indemnitee with respect to an employee  benefit plan in the performance of its duties for a purpose reasonably believed by it to be in the interest of the participants and beneficiaries of the  plan shall be deemed to be for a purpose which is not opposed to the best interests of the Partnership.   (f) In no event may an Indemnitee subject the Limited Partners to personal liability by reason of the indemnification provisions set forth in this  Agreement.   (g) An Indemnitee shall not be denied indemnification in whole or in part under this Section 6.3 because the Indemnitee had an interest in the  transaction with respect to which the indemnification applies if the transaction was otherwise permitted by the terms of this Agreement.   (h) The provisions of this Section 6.3 are for the benefit of the Indemnitees, their heirs, successors, assigns and administrators and shall not be  deemed to create any rights for the benefit of any other Persons.   (i) Notwithstanding the foregoing, the Partnership may not indemnify or hold harmless an Indemnitee for any liability or loss unless all of the  following conditions are met: (i) the Indemnitee has determined, in good faith, that the course of conduct that caused the loss or liability was in the  best interests of the Partnership; (ii) the Indemnitee was acting on behalf of or performing services for the Partnership; (iii) the liability or loss was  not the result of (A) negligence or misconduct, in the case that the Indemnitee is a director of the General Partner (other than an Independent  Director), the Advisor or an Affiliate of the Advisor or (B) gross negligence or willful misconduct, in the case that the Indemnitee is an  Independent Director; and (iv) the indemnification or agreement to hold harmless is recoverable only out of net assets of the Partnership. In  addition, the Partnership shall not provide indemnification for any loss, liability or expense arising from or out of an alleged violation of federal or  state securities laws by such party unless one or more of the following conditions are met: (i) there has   23   Source: TNP STRATEGIC RETAIL TRUST, INC., EX-10.3, 5/11/2009  |  Powered by Intelligize 

 

   been a successful adjudication on the merits of each count involving alleged material securities law violations as to the Indemnitee; (ii) such claims  have been dismissed with prejudice on the merits by a court of competent jurisdiction as to the Indemnitee; or (iii) a court of competent jurisdiction  approves a settlement of the claims against the Indemnitee and finds that indemnification of the settlement and the related costs should be made,  and the court considering the request for indemnification has been advised of the position of the Commission and of the published position of any  state securities regulatory authority in which Securities were offered or sold as to indemnification for violations of securities laws.   6.4 Liability of the General Partner.   (a) Notwithstanding anything to the contrary set forth in this Agreement, the General Partner shall not be liable for monetary damages to the  Partnership or any Partners for losses sustained or liabilities incurred as a result of errors in judgment or of any act or omission if the General  Partner acted in good faith. The General Partner shall not be in breach of any duty that the General Partner may owe to the Limited Partners or the  Partnership or any other Persons under this Agreement or of any duty stated or implied by law or equity provided the General Partner, acting in  good faith, abides by the terms of this Agreement.   (b) The Limited Partners expressly acknowledge that the General Partner is acting on behalf of the Partnership, itself and its stockholders  collectively, that the General Partner is under no obligation to consider the separate interests of the Limited Partners (including, without limitation,  the tax consequences to Limited Partners or the tax consequences of some, but not all, of the Limited Partners) in deciding whether to cause the  Partnership to take (or decline to take) any actions. In the event of a conflict between the interests of its stockholders on one hand and the Limited  Partners on the other, the General Partner shall endeavor in good faith to resolve the conflict in a manner not adverse to either its stockholders or  the Limited Partners; provided, however, that for so long as the General Partner directly owns a controlling interest in the Partnership, any such  conflict that the General Partner, in its sole and absolute discretion, determines cannot be resolved in a manner not adverse to either its  stockholders or the Limited Partner shall be resolved in favor of the stockholders. The General Partner shall not be liable for monetary damages for  losses sustained, liabilities incurred, or benefits not derived by Limited Partners in connection with such decisions, provided that the General  Partner has acted in good faith.   (c) Subject to its obligations and duties as General Partner set forth in Section 6.1 hereof, the General Partner may exercise any of the powers  granted to it under this Agreement and perform any of the duties imposed upon it hereunder either directly or by or through its agents. The  General Partner shall not be responsible for any misconduct or negligence on the part of any such agent appointed by it in good faith.   (d) Notwithstanding any other provisions of this Agreement or the Act, any action of the General Partner on behalf of the Partnership or any  decision of the General Partner to refrain from acting on behalf of the Partnership, undertaken in the good faith belief that such action or omission  is necessary or advisable in order (i) to protect the ability of the General Partner to continue to qualify as a REIT or (ii) to prevent the General  Partner from incurring any taxes under Section 857, Section 4981, or any other provision of the Code, is expressly authorized under this Agreement  and is deemed approved by all of the Limited Partners.   (e) Any amendment, modification or repeal of this Section 6.4 or any 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 6.4 as in effect immediately prior to such  amendment, modification or repeal with respect to matters occurring, in whole or in part, prior to   24   Source: TNP STRATEGIC RETAIL TRUST, INC., EX-10.3, 5/11/2009  |  Powered by Intelligize 

 

   such amendment, modification or repeal, regardless of when claims relating to such matters may arise or be asserted.   6.5 Reimbursement of General Partner.   (a) Except as provided in this Section 6.5 and elsewhere in this Agreement (including the provisions of Articles 5 and 6 regarding distributions,  payments, and allocations to which it may be entitled), the General Partner shall not be compensated for its services as general partner of the  Partnership.   (b) The General Partner shall be reimbursed on a monthly basis, or such other basis as the General Partner may determine in its sole and absolute  discretion, for all Administrative Expenses incurred by the General Partner. Reimbursement of Administrative Expenses shall be treated as an  expense of the Partnership and not as allocations of Partnership income or gain.   6.6 Outside Activities.   Subject to Section 6.8 hereof, the Articles of Incorporation and any agreements entered into by the General Partner or its Affiliates with the  Partnership or a Subsidiary, any officer, director, employee, agent, trustee, Affiliate or stockholder of the General Partner, the General Partner shall  be entitled to and may have business interests and engage in business activities in addition to those relating to the Partnership, including  business interests and activities substantially similar or identical to those of the Partnership. Neither the Partnership nor any of the Limited  Partners shall have any rights by virtue of this Agreement in any such business ventures, interests or activities. None of the Limited Partners nor  any other Person shall have any rights by virtue of this Agreement or the partnership relationship established hereby in any such business  ventures, interests or activities, and the General Partner shall have no obligation pursuant to this Agreement to offer any interest in any such  business ventures, interests and activities to the Partnership or any Limited Partner, even if such opportunity is of a character which, if presented  to the Partnership or any Limited Partner, could be taken by such Person.   6.7 Employment or Retention of Affiliates.   (a) Any Affiliate of the General Partner may be employed or retained by the Partnership and may otherwise deal with the Partnership (whether as a  buyer, lessor, lessee, manager, furnisher of goods or services, broker, agent, lender or otherwise) and may receive from the Partnership any  compensation, price, or other payment therefor which the General Partner determines to be fair and reasonable.   (b) The Partnership may lend or contribute to its Subsidiaries or other Persons in which it has an equity investment, and such Persons may borrow  funds from the Partnership, on terms and conditions established in the sole and absolute discretion of the General Partner. The foregoing authority  shall not create any right or benefit in favor of any Subsidiary or any other Person.   (c) The Partnership may transfer assets to joint ventures, other partnerships, corporations or other business entities in which it is or thereby  becomes a participant upon such terms and subject to such conditions as the General Partner deems are consistent with this Agreement,  applicable law and the REIT status of the General Partner.   (d) Except as expressly permitted by this Agreement, neither the General Partner nor any of its Affiliates shall sell, transfer or convey any Property  to, or purchase any Property from, the   25   Source: TNP STRATEGIC RETAIL TRUST, INC., EX-10.3, 5/11/2009  |  Powered by Intelligize 

 

   Partnership, directly or indirectly, except pursuant to transactions that are, in the General Partner’s sole discretion, on terms that are fair and  reasonable to the Partnership.   6.8 General Partner Participation.   The General Partner agrees that all business activities of the General Partner, including activities pertaining to the acquisition, development or  ownership of any Real Estate Asset or other Property shall be conducted through the Partnership, a Subsidiary, a Subsidiary Partnership or a  taxable REIT subsidiary (within the meaning of Section 856(1) of the Code); provided, however, that the General Partner is allowed to make a direct  acquisition, but if and only if, such acquisition is made in connection with the issuance of Additional Securities, which direct acquisition and  issuance have been approved and determined to be in the best interests of the General Partner and the Partnership by a majority of the  Independent Directors.   6.9 Title to Partnership Assets.   Title to Partnership assets, whether real, personal or mixed and whether tangible or intangible, shall be deemed to be owned by the Partnership as  an entity, and no Partner, individually or collectively, shall have any ownership interest in such Partnership assets or any portion thereof. Title to  any or all of the Partnership assets may be held in the name of the Partnership, the General Partner or one or more nominees, as the General Partner  may determine, including Affiliates of the General Partner. The General Partner hereby declares and warrants that any Partnership assets for which  legal title is held in the name of the General Partner or any nominee or Affiliate of the General Partner shall be held by the General Partner for the  use and benefit of the Partnership in accordance with the provisions of this Agreement; provided, however, that the General Partner shall use its  best efforts to cause beneficial and record title to such assets to be vested in the Partnership as soon as reasonably practicable. All Partnership  assets shall be recorded as the Property of the Partnership in its books and records, irrespective of the name in which legal title to such Partnership  assets is held.   6.10 Miscellaneous.   In the event the General Partner redeems any REIT Shares (other than REIT Shares redeemed in accordance with the share redemption program of  the General Partner through proceeds received from the General Partner’s dividend reinvestment plan), then the General Partner shall cause the  Partnership to purchase from the General Partner a number of Partnership Units as determined based on the application of the Conversion Factor  on the same terms that the General Partner redeemed such REIT Shares. Moreover, if the General Partner makes a cash tender offer or other offer to  acquire REIT Shares, then the General Partner shall cause the Partnership to make a corresponding offer to the General Partner to acquire an equal  number of Partnership Units held by the General Partner. In the event any REIT Shares are redeemed by the General Partner pursuant to such offer,  the Partnership shall redeem an equivalent number of the General Partner’s Partnership Units for an equivalent purchase price based on the  application of the Conversion Factor.   6.11 No Duplication of Fees or Expenses.   The Partnership may not incur or be responsible for any fee or expense (in connection with the Offering or otherwise) that would be duplicative of  fees and expenses paid by the General Partner.   26   Source: TNP STRATEGIC RETAIL TRUST, INC., EX-10.3, 5/11/2009  |  Powered by Intelligize 

 

   ARTICLE 7  CHANGES IN GENERAL PARTNER   7.1 Transfer of the General Partner’s Partnership Interest.   (a) The General Partner shall not transfer all or any portion of its General Partnership Interest or withdraw as General Partner except as provided in,  or in connection with a transaction contemplated by, Section 7.1(c), (d) or (e).   (b) The General Partner agrees that its Percentage Interest will at all times be, in the aggregate, at least 0.1%.   (c) Except as otherwise provided in Section 6.4(b) or Section 7.1(d) or (e) hereof, the General Partner shall not engage in any merger, consolidation  or other combination with or into another Person or the sale of all or substantially all of its assets, (other than in connection with a change in the  General Partner’s state of incorporation or organizational form) in each case which results in a change of control of the General Partner (a  “Transaction”), unless:   (i) the consent of Limited Partners holding more than 50% of the Percentage Interests and more than 50% of the Special Percentage Interests of the  Limited Partners is obtained;   (ii) as a result of such Transaction all Limited Partners will receive (A) for each Partnership 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 in the Transaction to a holder of  one REIT Share in consideration of one REIT Share, provided that if, in connection with the Transaction, a purchase, tender or exchange offer  (“Offer”) shall have been made to and accepted by the holders of more than 50% of the outstanding REIT Shares, each holder of Partnership Units  shall be given the option to exchange its Partnership Units for the greatest amount of cash, securities, or other Property which a Limited Partner  holding Partnership Units would have received had it (1) exercised its Redemption Right and (2) sold, tendered or exchanged pursuant to the Offer  the REIT Shares received upon exercise of the Redemption Right immediately prior to the expiration of the Offer and (B) for each Special  Partnership Unit an amount of cash, securities or other Property (as applicable based upon the type of consideration and the proportions thereof  paid to holders of REIT Shares in the Transaction) equal to the fair market value of such Special Partnership Unit at such time as determined in  good faith by the General Partner by reference to the value paid for the REIT Shares; or   (iii) the General Partner is the surviving entity in the Transaction and either (A) the holders of REIT Shares do not receive cash, securities, or other  Property in the Transaction or (B) all Limited Partners (other than the General Partner or any Subsidiary) receive (1) in exchange for their  Partnership Units, an amount of cash, securities, or other Property (expressed as an amount per REIT Share) that is no less than the product of the  Conversion Factor and the greatest amount of cash, securities, or other Property (expressed as an amount per REIT Share) received in the  Transaction by any holder of REIT Shares and (2) in exchange for their Special Partnership Units, an amount of cash, securities or other Property  (as applicable based upon the type of consideration and the proportions thereof paid to holders of REIT Shares in the Transaction) equal to the  fair market value of such Special Partnership Units at such time as determined in good faith by the General Partner by reference to the value paid  for the REIT Shares.   (d) Notwithstanding Section 7.1(c), the General Partner may merge with or into or consolidate with another entity if immediately after such merger  or consolidation (i) substantially all of   27   Source: TNP STRATEGIC RETAIL TRUST, INC., EX-10.3, 5/11/2009  |  Powered by Intelligize 

 

   the assets of the successor or surviving entity (the “Survivor”), other than Partnership Units held by the General Partner, are contributed, directly  or indirectly, to the Partnership as a Capital Contribution in exchange for Partnership Units with a fair market value equal to the value of the assets  so contributed as determined by the Survivor in good faith and (ii) the Survivor expressly agrees to assume all obligations of the General Partner,  as appropriate, hereunder. Upon such contribution and assumption, the Survivor shall have the right and duty to amend this Agreement as set  forth in this Section 7.1(d). The Survivor shall in good faith arrive at a new method for the calculation of the Cash Amount, the REIT Shares  Amount and Conversion Factor for a Partnership Unit after any such merger or consolidation so as to approximate the existing method for such  calculation as closely as reasonably possible. Such calculation shall take into account, among other things, the kind and amount of securities, cash and other Property that was receivable upon such merger or consolidation by a holder of REIT Shares or options, warrants or other rights relating  thereto, and which a holder of Partnership Units could have acquired had such Partnership Units been exchanged immediately prior to such merger  or consolidation. Such amendment to this Agreement shall provide for adjustment to such method of calculation, which shall be as nearly  equivalent as may be practicable to the adjustments provided for with respect to the Conversion Factor. The Survivor also shall in good faith  modify the definition of REIT Shares and make such amendments to Sections 8.5 and 8.6 hereof so as to approximate the existing rights and  obligations set forth in Sections 8.5 and 8.6 as closely as reasonably possible. The above provisions of this Section 7.1(d) shall similarly apply to  successive mergers or consolidations permitted hereunder.   In respect of any transaction described in the preceding paragraph, the General Partner is required to use its commercially reasonable efforts to  structure such transaction to avoid causing the Limited Partners to recognize a gain for Federal income tax purposes by virtue of the occurrence of  or their participation in such transaction, provided such efforts are consistent with the exercise of the Board of Directors’ fiduciary duties to the  stockholders of the General Partner under applicable law.   (e) Notwithstanding Section 7.1(c),   (i) a General Partner may transfer all or any portion of its General Partnership Interest to (A) a wholly-owned Subsidiary of such General Partner or  (B) the owner of all of the ownership interests of such General Partner, and following a transfer of all of its General Partnership Interest, may  withdraw as General Partner; and   (ii) the General Partner may engage in a transaction not required by law or by the rules of any national securities exchange on which the REIT  Shares are listed to be submitted to the vote of the holders of the REIT Shares.   7.2 Admission of a Substitute or Additional General Partner.   A Person shall be admitted as a substitute or additional General Partner of the Partnership only if the following terms and conditions are satisfied:   (a) the Person to be admitted as a substitute or additional General Partner shall have accepted and agreed to be bound by all the terms and  provisions of this Agreement by executing a counterpart thereof and such other documents or instruments as may be required or appropriate in  order to effect the admission of such Person as a General Partner, and a certificate evidencing the admission of such Person as a General Partner  shall have been filed for recordation and all other actions required by Section 2.5 hereof in connection with such admission shall have been  performed;   (b) if the Person to be admitted as a substitute or additional General Partner is a corporation or a partnership it shall have provided the Partnership  with evidence satisfactory to counsel   28   Source: TNP STRATEGIC RETAIL TRUST, INC., EX-10.3, 5/11/2009  |  Powered by Intelligize 

 

   for the Partnership of such Person’s authority to become a General Partner and to be bound by the terms and provisions of this Agreement; and   (c) counsel for the Partnership shall have rendered an opinion (relying on such opinions from other counsel as may be necessary) that (x) the  admission of the Person to be admitted as a substitute or additional General Partner is in conformity with the Act and (y) none of the actions taken  in connection with the admission of such Person as a substitute or additional General Partner will cause (i) the Partnership to be classified other  than as a partnership for federal tax purposes, or (ii) the loss of any Limited Partner’s limited liability.   7.3 Effect of Bankruptcy, Withdrawal, Death or Dissolution of a General Partner.   (a) Upon the occurrence of an Event of Bankruptcy as to a General Partner (and its removal pursuant to Section 7.4(a) hereof) or the death,  withdrawal, removal or dissolution of a General Partner (except that, if a General Partner is on the date of such occurrence a partnership, the  withdrawal, death, dissolution, Event of Bankruptcy as to, or removal of a partner in, such partnership shall be deemed not to be a dissolution of  such General Partner if the business of such General Partner is continued by the remaining partner or partners), the Partnership shall be dissolved  and terminated unless the Partnership is continued pursuant to Section 7.3(b) hereof. The merger of the General Partner with or into any entity that  is admitted as a substitute or successor General Partner pursuant to Section 7.2 hereof shall not be deemed to be the withdrawal, dissolution or  removal of the General Partner.   (b) Following the occurrence of an Event of Bankruptcy as to a General Partner (and its removal pursuant to Section 7.4(a) hereof) or the death,  withdrawal, removal or dissolution of a General Partner (except that, if a General Partner is, on the date of such occurrence, a partnership, the  withdrawal of, death, dissolution, Event of Bankruptcy as to, or removal of a partner in, such partnership shall be deemed not to be a dissolution of  such General Partner if the business of such General Partner is continued by the remaining partner or partners), the Limited Partners, within ninety  (90) days after such occurrence, may elect to continue the business of the Partnership for the balance of the term specified in Section 2.4 hereof by  selecting, subject to Section 7.2 hereof and any other provisions of this Agreement, a substitute General Partner by consent of a majority in  interest of the Limited Partners. If the Limited Partners elect to continue the business of the Partnership and admit a substitute General Partner, the  relationship with the Partners and of any Person who has acquired an interest of a Partner in the Partnership shall be governed by this Agreement.   7.4 Removal of a General Partner.   (a) Upon the occurrence of an Event of Bankruptcy as to, or the dissolution of, a General Partner, such General Partner shall be deemed to be  removed automatically; provided, however, that if a General Partner is on the date of such occurrence a partnership, the withdrawal, death or  dissolution of, Event of Bankruptcy as to, or removal of, a partner in, such partnership shall be deemed not to be a dissolution of the General  Partner if the business of such General Partner is continued by the remaining partner or partners. The Limited Partners may not remove the General  Partner, with or without cause.   (b) If a General Partner has been removed pursuant to this Section 7.4 and the Partnership is continued pursuant to Section 7.3 hereof, such  General Partner shall promptly transfer and assign its General Partnership Interest in the Partnership to the substitute General Partner approved by  a majority in interest of the Limited Partners in accordance with Section 7.3(b) hereof and otherwise be admitted to the Partnership in accordance  with Section 7.2 hereof. At the time of assignment, the removed General Partner shall be entitled to receive from the substitute General Partner the  fair market value of the   29   Source: TNP STRATEGIC RETAIL TRUST, INC., EX-10.3, 5/11/2009  |  Powered by Intelligize 

 

   General Partnership Interest of such removed General Partner as reduced by any damages caused to the Partnership by such General Partner. Such  fair market value shall be determined by an appraiser mutually agreed upon by the General Partner and a majority in interest of the Limited Partners  within ten (10) days following the removal of the General Partner. In the event that the parties are unable to agree upon an appraiser, the removed  General Partner and a majority in interest of the Limited Partners each shall select an appraiser. Each such appraiser shall complete an appraisal of  the fair market value of the removed General Partner’s General Partnership Interest within thirty (30) days of the General Partner’s removal, and the  fair market value of the removed General Partner’s General Partnership Interest shall be the average of the two appraisals; provided, however, that  if the higher appraisal exceeds the lower appraisal by more than 20% of the amount of the lower appraisal, the two appraisers, no later than forty  (40) days after the removal of the General Partner, shall select a third appraiser who shall complete an appraisal of the fair market value of the  removed General Partner’s General Partnership Interest no later than sixty (60) days after the removal of the General Partner. In such case, the fair  market value of the removed General Partner’s General Partnership Interest shall be the average of the two appraisals closest in value.   (c) The General Partnership Interest of a removed General Partner, during the time after default until transfer under Section 7.4(b), shall be  converted to that of a special Limited Partner; provided, however, such removed General Partner shall not have any rights to participate in the  management and affairs of the Partnership, and shall not be entitled to any portion of the income, expense, profit, gain or loss allocations or cash  distributions allocable or payable, as the case may be, to the Limited Partners. Instead, such removed General Partner shall receive and be entitled  only to retain distributions or allocations of such items that it would have been entitled to receive in its capacity as General Partner, until the  transfer is effective pursuant to Section 7.4(b).   (d) All Partners shall have given and hereby do give such consents, shall take such actions and shall execute such documents as shall be legally  necessary, desirable and sufficient to effect all the foregoing provisions of this Section.   ARTICLE 8  RIGHTS AND OBLIGATIONS OF THE LIMITED PARTNERS   8.1 Management of the Partnership.   The Limited Partners shall not participate in the management or control of Partnership business nor shall they transact any business for the  Partnership, nor shall they have the power to sign for or bind the Partnership, such powers being vested solely and exclusively in the General  Partner.   8.2 Power of Attorney.   Each Limited Partner hereby irrevocably appoints the General Partner its true and lawful attorney-in-fact, who may act for each Limited Partner and  in its name, place and stead, and for its use and benefit, to sign, acknowledge, swear to, deliver, file or record, at the appropriate public offices, any  and all documents, certificates, and instruments as may be deemed necessary or desirable by the General Partner to carry out fully the provisions  of this Agreement and the Act in accordance with their terms, which power of attorney is coupled with an interest and shall survive the death,  dissolution or legal incapacity of the Limited Partner, or the transfer by the Limited Partner of any part or all of its Partnership Interest.   30   Source: TNP STRATEGIC RETAIL TRUST, INC., EX-10.3, 5/11/2009  |  Powered by Intelligize 

 

   8.3 Limitation on Liability of Limited Partners.   No Limited Partner shall be liable for any debts, liabilities, contracts or obligations of the Partnership. A Limited Partner shall be liable to the  Partnership only to make payments of its Capital Contribution, if any, as and when due hereunder. After its Capital Contribution is fully paid, no  Limited Partner shall, except as otherwise required by the Act, be required to make any further Capital Contributions or other payments or lend any  funds to the Partnership.   8.4 Ownership by Limited Partner of Corporate General Partner or Affiliate.   No Limited Partner shall at any time, either directly or indirectly, own any stock or other interest in the General Partner or in any Affiliate thereof, if  such ownership by itself or in conjunction with other stock or other interests owned by other Limited Partners would, in the opinion of counsel for  the Partnership, jeopardize the classification of the Partnership as a partnership for federal tax purposes. The General Partner shall be entitled to  make such reasonable inquiry of the Limited Partners as is required to establish compliance by the Limited Partners with the provisions of this  Section.   8.5 Redemption Right.   (a) Subject to Sections 8.5(b), 8.5(c), 8.5(d), 8.5(e) and 8.5(f) and the provisions of any agreements between the Partnership and one or more Limited  Partners with respect to Partnership Units held by them, each Limited Partner, other than the General Partner, shall, after holding their Partnership  Units for at least one year, have the right (subject to the terms and conditions set forth herein) to require the Partnership to redeem (a  “Redemption”) all or a portion of the Partnership Units held by such Limited Partner in exchange (a “Redemption Right”) for REIT Shares issuable  on, or the Cash Amount payable on, or a combination thereof having an equivalent value to the REIT Shares issuable on, or the Cash Amount  payable on, the Specified Redemption Date, as determined by the General Partner in its sole discretion, provided that such Partnership Units (the  “Tendered Units”) shall have been outstanding for at least one year. Any Redemption Right shall be exercised pursuant to a Notice of Redemption  delivered to the Partnership (with a copy to the General Partner) by the Limited Partner exercising the Redemption Right (the “Tendering Party”).  No Limited Partner may deliver more than two Notices of Redemption during each calendar year. A Limited Partner may not exercise the  Redemption Right for less than 1,000 Partnership Units or, if such Limited Partner holds less than 1,000 Partnership Units, all of the Partnership  Units held by such Partner. The Tendering Party shall have no right, with respect to any Partnership Units so redeemed, to receive any distribution  paid with respect to Partnership Units if the record date for such distribution is on or after the Specified Redemption Date.   (b) If the General Partner elects to redeem Tendered Units for REIT Shares rather than cash, then the Partnership shall direct the General Partner to  issue and deliver such REIT Shares to the Tendering Party pursuant to the terms set forth in this Section 8.5(b), in which case, (i) the General  Partner, acting as a distinct legal entity, shall assume directly the obligation with respect thereto and shall satisfy the Tendering Party’s exercise of  its Redemption Right, and (ii) such transaction shall be treated, for federal income tax purposes, as a transfer by the Tendering Party of such  Tendered Units to the General Partner in exchange for REIT Shares. The percentage of the Tendered Units tendered for Redemption by the  Tendering Party for which the General Partner elects to issue REIT Shares (rather than cash) is referred to as the “Applicable Percentage.” In  making such election to acquire Tendered Units, the Partnership shall act in a fair, equitable and reasonable manner that neither prefers one group  or class of Limited Partners over another nor discriminates against a group or class of Limited Partners. If the Partnership elects to redeem any  number of Tendered Units for REIT Shares, rather than cash, on the Specified Redemption Date, the Tendering Party shall sell such number of the  Tendered Units to the General Partner in exchange for a number of REIT Shares equal to the product of the REIT Shares   31   Source: TNP STRATEGIC RETAIL TRUST, INC., EX-10.3, 5/11/2009  |  Powered by Intelligize 

 

   Amount and the Applicable Percentage. The product of the Applicable Percentage and the REIT Shares Amount, if applicable, shall be delivered  by the General Partner as duly authorized, validly issued, fully paid and accessible REIT Shares free of any pledge, lien, encumbrance or restriction, other than the Aggregate Share Ownership Limit and other restrictions provided in the Article of Incorporation, the bylaws of the General Partner,  the Securities Act and relevant state securities or “blue sky” laws. Notwithstanding the provisions of Section 8.5(a) and this Section 8.5(b), the  Tendering Parties shall have no rights under this Agreement that would otherwise be prohibited under the Articles of Incorporation.   (c) In connection with an exercise of Redemption Rights pursuant to this Section 8.5, the Tendering Party shall submit the following to the General  Partner, in addition to the Notice of Redemption:   (1) A written affidavit, dated the same date as the Notice of Redemption, (a) disclosing the actual and constructive ownership, as determined for  purposes of Code Sections 856(a)(6) and 856(h), of REIT Shares by (i) such Tendering Party and (ii) any Related Party and (b) representing that,  after giving effect to the Redemption, neither the Tendering Party nor any Related Party will own REIT Shares in excess of the Aggregate Share  Ownership Limit (or, if applicable the Excepted Holder Limit);   (2) A written representation that neither the Tendering Party nor any Related Party has any intention to acquire any additional REIT Shares prior to  the closing of the Redemption on the Specified Redemption Date;   (3) An undertaking to certify, at and as a condition to the closing of the Redemption on the Specified Redemption Date, that either (a) the actual  and constructive ownership of REIT Shares by the Tendering Party and any Related Party remain unchanged from that disclosed in the affidavit  required by Section 8.5(c)(1) or (b) after giving effect to the Redemption, neither the Tendering Party nor any Related Party shall own REIT Shares  in violation of the Aggregate Share Ownership Limit (or, if applicable, the Excepted Holder Limit); and   (4) Any other documents as the General Partner may reasonably require in connection with the issuance of REIT Shares upon the exercise of the  Redemption Right.   (d) Any Cash Amount to be paid to a Tendering Party pursuant to this Section 8.5 shall be paid on the Specified Redemption Date; provided,  however, that the General Partner may elect to cause the Specified Redemption Date to be delayed for up to an additional 180 days to the extent  required for the General Partner to cause additional REIT Shares to be issued to provide financing to be used to make such payment of the Cash  Amount. Notwithstanding the foregoing, the General Partner agrees to use its best efforts to cause the closing of the acquisition of Tendered  Units hereunder to occur as quickly as reasonably possible.   (e) Notwithstanding any other provision of this Agreement, the General Partner shall place appropriate restrictions on the ability of the Limited  Partners to exercise their Redemption Rights to prevent, among other things, (a) any person from owning shares in excess of the Common Share  Ownership Limit, the Aggregate Share Ownership Limit and the Excepted Holder Limit, (b) the General Partner’s common stock from being owned  by less than 100 persons, (c) the General Partner from being “closely held” within the meaning of section 856(h) of the Code, and (d) to ensure that  the Partnership does not constitute a “publicly traded partnership” under section 7704 of the Code. If and when the General Partner determines  that imposing such restrictions is necessary, the General Partner shall give prompt written notice thereof (a “Restriction Notice”) to each of the  Limited Partners holding Partnership Units, which notice shall be accompanied by a copy of an opinion of counsel to the Partnership which   32   Source: TNP STRATEGIC RETAIL TRUST, INC., EX-10.3, 5/11/2009  |  Powered by Intelligize 

 

   states that, in the opinion of such counsel, restrictions are necessary in order to avoid having the Partnership be treated as a “publicly traded  partnership” under section 7704 of the Code.   (f) A redemption fee may be charged in connection with an exercise of Redemption Rights pursuant to this Section 8.5.   8.6 Redemption of Special Partnership Units.   Upon the earliest to occur of (a) the termination or nonrenewal of the Advisory Agreement for “cause” (as defined in the Advisory Agreement),  (b) a Termination Event, or (c) the Listing, the Special Partnership Units will be redeemed.   (a) Redemption of Special Partnership Units Upon Termination or Nonrenewal of the Advisory Agreement for Cause. If the Advisory Agreement  is terminated or not renewed by the General Partner for “cause” (as defined in the Advisory Agreement), all of the Special Partnership Units shall  be redeemed by the Partnership for $1 within thirty (30) days after the termination or nonrenewal of the Advisory Agreement.   (b) Redemption of Special Partnership Units upon a Termination Event or the Listing. Upon the occurrence of a Termination Event or the Listing,  the Partnership shall redeem the Special Partnership Units for an aggregate amount equal to the Net Sales Proceeds that would have been  distributed to the Special OP Unitholders under Section 5.2(b)(i)(B)(2) if all assets of the Partnership had been sold for their fair market value and all  liabilities of the Partnership had been satisfied in full according to their terms. Such redemption shall occur no later than thirty (30) days after the  date of a Termination Event and no later than 240 days after the Listing. In determining the fair market value of the assets of the Partnership, (i) in  connection with a Termination Event, the General Partner shall obtain an appraisal of the assets of the Partnership (excluding any assets which  may be readily marked to market) and (ii) in connection with the Listing, the General Partner shall make such determination taking into account the  market value of the General Partner’s listed shares based upon the average closing price, or average of bid and asked prices, as the case may be,  during a period of thirty (30) days during which such shares are traded beginning ninety (90) days after the Listing or in the event of an  underwritten public offering, the value of the shares based upon the initial public offering price in such offering. Payment to Special OP  Unitholders upon a Termination Event or a Listing shall consist of shares of common stock of the General Partner or a non-interest bearing  promissory note, as determined in the sole discretion of the General Partner. Any promissory note issued to the Special Unitholders hereunder will  be repaid using the net proceeds of each Sale of an asset or assets of the Partnership in connection with or following the occurrence of the  Termination Event or Listing.   8.7 Distribution Reinvestment Plan.   OP Unitholders may have the opportunity to join the General Partner’s distribution reinvestment plan by completing an enrollment form which is  available upon request. A copy of the General Partner’s distribution reinvestment plan is also available upon request. The shares of the General  Partner’s common stock which may be issued under the General Partner’s distribution reinvestment plan are offered only by a prospectus.   33   Source: TNP STRATEGIC RETAIL TRUST, INC., EX-10.3, 5/11/2009  |  Powered by Intelligize 

 

   ARTICLE 9  TRANSFERS OF LIMITED PARTNERSHIP INTERESTS   9.1 Purchase for Investment.   (a) Each Limited Partner hereby represents and warrants to the General Partner and to the Partnership that the acquisition of his Partnership  Interest is made as a principal for his account for investment purposes only and not with a view to the resale or distribution of such Partnership  Interest.   (b) Each Limited Partner agrees that he will not sell, assign or otherwise transfer his Partnership Interest or any fraction thereof, whether  voluntarily or by operation of law or at judicial sale or otherwise, to any Person who does not make the representations and warranties to the  General Partner set forth in Section 9.1(a) above and similarly agree not to sell, assign or transfer such Partnership Interest or fraction thereof to  any Person who does not similarly represent, warrant and agree.   9.2 Restrictions on Transfer of Limited Partnership Interests.   (a) Subject to the provisions of 9.2(b) and (c), no Limited Partner may offer, sell, assign, hypothecate, pledge or otherwise transfer all or any  portion of his Limited Partnership Interest, or any of such Limited Partner’s economic rights as a Limited Partner, whether voluntarily or by  operation of law or at judicial sale or otherwise (collectively, a “Transfer”) without the consent of the General Partner, which consent may be  granted or withheld in its sole and absolute discretion. Any such purported transfer undertaken without such consent shall be considered to be  null and void ab initio and shall not be given effect. The General Partner may require, as a condition of any Transfer to which it consents, that the  transferor assume all costs incurred by the Partnership in connection therewith.   (b) No Limited Partner may withdraw from the Partnership other than as a result of a permitted Transfer (i.e., a Transfer consented to as  contemplated by clause (a) above or clause (c) below or a Transfer pursuant to Section 9.5 below) of all of its Partnership Interest pursuant to this  Article 9 or pursuant to a redemption of all of its Partnership Units pursuant to Section 8.5 or pursuant to the redemption of the Limited Partner’s  Special Partnership Units pursuant to Section 8.6. Upon the permitted Transfer or redemption of all of a Limited Partner’s Partnership Interest, such  Limited Partner shall cease to be a Limited Partner.   (c) Notwithstanding Section 9.2(a) and subject to Sections 9.2(d), (e) and (f) below, a Limited Partner may Transfer, without the consent of the  General Partner, all or a portion of its Partnership Interest to (i) a parent or parent’s spouse, natural or adopted descendant or descendants, spouse  of such descendant, or brother or sister, or a trust created by such Limited Partner for the benefit of such Limited Partner and/or any such person (s), of which trust such Limited Partner or any such person(s) is a trustee, (ii) a corporation controlled by a Person or Persons named in (i) above,  or (iii) if the Limited Partner is an entity, its beneficial owners.   (d) No Limited Partner may effect a Transfer of its Limited Partnership Interest, in whole or in part, if, in the opinion of legal counsel for the  Partnership, such proposed Transfer would require the registration of the Limited Partnership Interest under the Securities Act or would otherwise  violate any applicable federal or state securities or blue sky law (including investment suitability standards).   (e) No Transfer by a Limited Partner of its Partnership Interest, in whole or in part, may be made to any Person if (i) in the opinion of the General  Partner based on the advice of legal   34   Source: TNP STRATEGIC RETAIL TRUST, INC., EX-10.3, 5/11/2009  |  Powered by Intelligize 

 

   counsel for the Partnership, if appropriate, the transfer would result in the Partnership’s being treated as an association taxable as a corporation  (other than a qualified REIT subsidiary within the meaning of Section 856(i) of the Code), (ii) in the opinion of the General Partner based on the  advice of legal counsel for the Partnership, if appropriate, it would adversely affect the ability of the General Partner to continue to qualify as a  REIT or subject the General Partner to any additional taxes under Section 857 or Section 4981 of the Code, (iii) such transfer is effectuated through  an “established securities market” or a “secondary market (or the substantial equivalent thereof)” within the meaning of Section 7704 of the Code,  (iv) such Transfer would cause the General Partner to own 10% or more of the ownership interests of any tenant of a Property held by the  partnership within the meaning of Section 856(d)(2)(B) of the Code, or (v) such Transfer would result in the General Partner being “closely held”  within the meaning of Section 856(h) of the Code.   (f) No transfer by a Limited Partner of any Partnership Interest may be made to a lender to the Partnership or any Person who is related (within the  meaning of Regulations Section 1.752-4(b)) to any lender to the Partnership whose loan constitutes a Nonrecourse Liability, without the consent of  the General Partner, which may be withheld in its sole and absolute discretion, provided that as a condition to such consent the lender will be  required to enter into an arrangement with the Partnership and the General Partner to exchange or redeem for the Cash Amount any Partnership  Units in which a security interest is held simultaneously with the time at which such lender would be deemed to be a Partner in the Partnership for  purposes of allocating liabilities to such lender under Section 752 of the Code.   (g) Any Transfer in contravention of any of the provisions of this Article 9 shall be void and ineffectual and shall not be binding upon, or  recognized by, the Partnership.   (h) Prior to the consummation of any Transfer under this Article 9, the transferor and/or the transferee shall deliver to the General Partner such  opinions, certificates and other documents as the General Partner shall request in connection with such Transfer.   9.3 Admission of Substitute Limited Partner.   (a) Subject to the other provisions of this Article 9, an assignee of the Limited Partnership Interest of a Limited Partner (which shall be understood  to include any purchaser, transferee, donee, or other recipient of any disposition of such Limited Partnership Interest) shall be deemed admitted as  a Limited Partner of the Partnership only with the consent of the General Partner and upon the satisfactory completion of the following:   (i) The assignee shall have accepted and agreed to be bound by the terms and provisions of this Agreement by executing a counterpart or an  amendment thereof, including a revised Exhibit A, and such other documents or instruments as the General Partner may require in order to effect  the admission of such Person as a Limited Partner.   (ii) To the extent required, an amended Certificate evidencing the admission of such Person as a Limited Partner shall have been signed,  acknowledged and filed for record in accordance with the Act.   (iii) The assignee shall have delivered a letter containing the representation set forth in Section 9.1(a) hereof and the agreement set forth in Section  9.1(b) hereof.   (iv) If the assignee is a corporation, partnership or trust, the assignee shall have provided the General Partner with evidence satisfactory to  counsel for the Partnership of the assignee’s authority to become a Limited Partner under the terms and provisions of this Agreement.   35   Source: TNP STRATEGIC RETAIL TRUST, INC., EX-10.3, 5/11/2009  |  Powered by Intelligize 

 

   (v) The assignee shall have executed a power of attorney containing the terms and provisions set forth in Section 8.2 hereof.   (vi) The assignee shall have paid all legal fees and other expenses of the Partnership and the General Partner and filing and publication costs in  connection with its substitution as a Limited Partner.   (vii) The assignee has obtained the prior written consent of the General Partner to its admission as a Substitute Limited Partner, which consent may  be given or denied in the exercise of the General Partner’s sole and absolute discretion.   (b) For the purpose of allocating Profits and Losses and distributing cash received by the Partnership, a Substitute Limited Partner shall be treated  as having become, and appearing in the records of the Partnership as, a Partner upon the filing of the Certificate described in Section 9.3(a)(ii)  hereof or, if no such filing is required, the later of the date specified in the transfer documents or the date on which the General Partner has  received all necessary instruments of transfer and substitution.   (c) The General Partner shall cooperate with the Person seeking to become a Substitute Limited Partner by preparing the documentation required  by this Section and making all official filings and publications. The Partnership shall take all such action as promptly as practicable after the  satisfaction of the conditions in this Article 9 to the admission of such Person as a Limited Partner of the Partnership.   9.4 Rights of Assignees of Partnership Interests.   (a) Subject to the provisions of Sections 9.1 and 9.2 hereof, except as required by operation of law, the Partnership shall not be obligated for any  purposes whatsoever to recognize the assignment by any Limited Partner of its Partnership Interest until the Partnership has received notice  thereof.   (b) Any Person who is the assignee of all or any portion of a Limited Partner’s Limited Partnership Interest, but does not become a Substitute  Limited Partner and desires to make a further assignment of such Limited Partnership Interest, shall be subject to all the provisions of this Article 9  to the same extent and in the same manner as any Limited Partner desiring to make an assignment of its Limited Partnership Interest.   9.5 Effect of Bankruptcy, Death, Incompetence or Termination of a Limited Partner.   The occurrence of an Event of Bankruptcy as to a Limited Partner, the death of a Limited Partner or a final adjudication that a Limited Partner is  incompetent (which term shall include, but not be limited to, insanity) shall not cause the termination or dissolution of the Partnership, and the  business of the Partnership shall continue if an order for relief in a bankruptcy proceeding is entered against a Limited Partner, the trustee or  receiver of his estate or, if he dies, his executor, administrator or trustee, or, if he is finally adjudicated incompetent, his committee, guardian or  conservator, shall have the rights of such Limited Partner for the purpose of settling or managing his estate property and such power as the  bankrupt, deceased or incompetent Limited Partner possessed to assign all or any part of his Partnership Interest and to join with the assignee in  satisfying conditions precedent to the admission of the assignee as a Substitute Limited Partner.   36   Source: TNP STRATEGIC RETAIL TRUST, INC., EX-10.3, 5/11/2009  |  Powered by Intelligize 

 

   9.6 Joint Ownership of Interests.   A Partnership Interest may be acquired by two individuals as joint tenants with right of survivorship, provided that such individuals either are  married or are related and share the same home as tenants in common. The written consent or vote of both owners of any such jointly held  Partnership Interest shall be required to constitute the action of the owners of such Partnership Interest; provided, however, that the written  consent of only one joint owner will be required if the Partnership has been provided with evidence satisfactory to the counsel for the Partnership  that the actions of a single joint owner can bind both owners under the applicable laws of the state of residence of such joint owners. Upon the  death of one owner of a Partnership Interest held in a joint tenancy with a right of survivorship, the Partnership Interest shall become owned solely by the survivor as a Limited Partner and not as an assignee. The Partnership need not recognize the death of one of the owners of a jointly-held  Partnership Interest until it shall have received notice of such death. Upon notice to the General Partner from either owner, the General Partner shall  cause the Partnership Interest to be divided into two equal Partnership Interests, which shall thereafter be owned separately by each of the former  owners.   ARTICLE 10  BOOKS AND RECORDS; ACCOUNTING; TAX MATTERS   10.1 Books and Records.   At all times during the continuance of the Partnership, the Partners shall keep or cause to be kept at the Partnership’s specified office true and  complete books of account in accordance with generally accepted accounting principles, including: (a) a current list of the full name and last  known business address of each Partner, (b) a copy of the Certificate of Limited Partnership and all Certificates of amendment thereto, (c) copies of  the Partnership’s federal, state and local income tax returns and reports, (d) copies of this Agreement and amendments thereto and any financial  statements of the Partnership for the three most recent years and (e) all documents and information required under the Act. Any Partner or its duly  authorized representative, upon paying the costs of collection, duplication and mailing, shall be entitled to inspect or copy such records during  ordinary business hours.   10.2 Custody of Partnership Funds; Bank Accounts.   (a) All funds of the Partnership not otherwise invested shall be deposited in one or more accounts maintained in such banking or brokerage  institutions as the General Partner shall determine, and withdrawals shall be made only on such signature or signatures as the General Partner may,  from time to time, determine.   (b) All deposits and other funds not needed in the operation of the business of the Partnership may be invested by the General Partner in  investment grade instruments (or investment companies whose portfolio consists primarily thereof), government obligations, certificates of  deposit, bankers’ acceptances and municipal notes and bonds. The funds of the Partnership shall not be commingled with the funds of any other  Person except for such commingling as may necessarily result from an investment in those investment companies permitted by this Section 10.2(b).  10.3 Fiscal and Taxable Year.   The fiscal and taxable year of the Partnership shall be the calendar year.   37   Source: TNP STRATEGIC RETAIL TRUST, INC., EX-10.3, 5/11/2009  |  Powered by Intelligize 

 

   10.4 Annual Tax Information and Report.   Within seventy-five (75) days after the end of each fiscal year of the Partnership, the General Partner shall furnish to each person who was a  Limited Partner at any time during such year the tax information necessary to file such Limited Partner’s individual tax returns as shall be  reasonably required by law.   10.5 Tax Matters Partner; Tax Elections; Special Basis Adjustments.   (a) The General Partner shall be the Tax Matters Partner of the Partnership within the meaning of Section 6231(a)(7) of the Code. As Tax Matters  Partner, the General Partner shall have the right and obligation to take all actions authorized and required, respectively, by the Code for the Tax  Matters Partner. The General Partner shall have the right to retain professional assistance in respect of any audit of the Partnership by the Service  and all out-of-pocket expenses and fees incurred by the General Partner on behalf of the Partnership as Tax Matters Partner shall constitute  Partnership expenses. In the event the General Partner receives notice of a final Partnership adjustment under Section 6223(a)(2) of the Code, the  General Partner shall either (i) file a court petition for judicial review of such final adjustment within the period provided under Section 6226(a) of  the Code, a copy of which petition shall be mailed to all Limited Partners on the date such petition is filed, or (ii) mail a written notice to all Limited  Partners, within such period, that describes the General Partner’s reasons for determining not to file such a petition.   (b) All elections required or permitted to be made by the Partnership under the Code or any applicable state or local tax law shall be made by the  General Partner in its sole and absolute discretion.   (c) In the event of a transfer of all or any part of the Partnership Interest of any Partner, the Partnership, at the option of the General Partner, may  elect pursuant to Section 754 of the Code to adjust the basis of the Partnership’s assets. Notwithstanding anything contained in Article 5 of this  Agreement, any adjustments made pursuant to Section 754 of the Code shall affect only the successor in interest to the transferring Partner and in  no event shall be taken into account in establishing, maintaining or computing Capital Accounts for the other Partners for any purpose under this  Agreement. Each Partner will furnish the Partnership with all information necessary to give effect to such election.   10.6 Reports to Limited Partners.   (a) As soon as practicable after the close of each fiscal quarter (other than the last quarter of the fiscal year), the General Partner shall cause to be  mailed to each Limited Partner a quarterly report containing financial statements of the Partnership, or of the General Partner if such statements are  prepared solely on a consolidated basis with the General Partner, for such fiscal quarter, presented in accordance with generally accepted  accounting principles. As soon as practicable after the close of each fiscal year, the General Partner shall cause to be mailed to each Limited  Partner an annual report containing financial statements of the Partnership, or of the General Partner if such statements are prepared solely on a  consolidated basis with the General Partner, for such fiscal year, presented in accordance with generally accepted accounting principles. The  annual financial statements shall be audited by accountants selected by the General Partner.   (b) Any Partner shall further have the right to a private audit of the books and records of the Partnership at the expense of such Partner, provided  such audit is made for Partnership purposes and is made during normal business hours.   38   Source: TNP STRATEGIC RETAIL TRUST, INC., EX-10.3, 5/11/2009  |  Powered by Intelligize 

 

   ARTICLE 11  AMENDMENT OF AGREEMENT; MERGER   The General Partner’s consent shall be required for any amendment to this Agreement. The General Partner, without the consent of the Limited  Partners, may amend this Agreement in any respect or merge or consolidate the Partnership with or into any other partnership or business entity  (as defined in Section 17-211 of the Act) in a transaction pursuant to Section 7.1(c), (d) or (e) hereof; provided, however, that the following  amendments and any other merger or consolidation of the Partnership shall require (i) the consent of Limited Partners holding more than 50% of  the Percentage Interests of the Limited Partners and (ii) in the case of any of the following (b), (c) or (d), the consent of Limited Partners holding  more than 50% of the Special Percentage Interests of the Limited Partners:   (a) any amendment affecting the operation of the Conversion Factor or the Redemption Right (except as provided in Section 8.5(d) or 7.1(d) hereof)  in a manner adverse to the Limited Partners;   (b) any amendment that would adversely affect the rights of the Limited Partners to receive the distributions payable to them hereunder, other than  with respect to the issuance of additional Partnership Units pursuant to Section 4.2 hereof;   (c) any amendment that would alter the Partnership’s allocations of Profit and Loss to the Limited Partners, other than with respect to the issuance  of additional Partnership Units pursuant to Section 4.2 hereof; or   (d) any amendment that would impose on the Limited Partners any obligation to make additional Capital Contributions to the Partnership.   ARTICLE 12  GENERAL PROVISIONS   12.1 Notices.   All communications required or permitted under this Agreement shall be in writing and shall be deemed to have been given when delivered  personally or upon deposit in the United States mail, registered, postage prepaid return receipt requested, to the Partners at the addresses set forth  in Exhibit A attached hereto; provided, however, that any Partner may specify a different address by notifying the General Partner in writing of  such different address. Notices to the Partnership shall be delivered at or mailed to its specified office.   12.2 Survival of Rights.   Subject to the provisions hereof limiting transfers, this Agreement shall be binding upon and inure to the benefit of the Partners and the  Partnership and their respective legal representatives, successors, transferees and assigns.   12.3 Additional Documents.   Each Partner agrees to perform all further acts and execute, swear to, acknowledge and deliver all further documents which may be reasonable,  necessary, appropriate or desirable to carry out the provisions of this Agreement or the Act.   39   Source: TNP STRATEGIC RETAIL TRUST, INC., EX-10.3, 5/11/2009  |  Powered by Intelligize 

 

   12.4 Severability.   If any provision of this Agreement shall be declared illegal, invalid, or unenforceable in any jurisdiction, then such provision shall be deemed to be  severable from this Agreement (to the extent permitted by law) and in any event such illegality, invalidity or unenforceability shall not affect the  remainder hereof.   12.5 Entire Agreement.   This Agreement and exhibits attached hereto constitute the entire Agreement of the Partners and supersede all prior written agreements and prior  and contemporaneous oral agreements, understandings and negotiations with respect to the subject matter hereof.   12.6 Pronouns and Plurals.   When the context in which words are used in the Agreement indicates that such is the intent, words in the singular number shall include the plural  and the masculine gender shall include the neuter or female gender as the context may require.   12.7 Headings.   The Article headings or sections in this Agreement are for convenience only and shall not be used in construing the scope of this Agreement or  any particular Article.   12.8 Counterparts.   This Agreement may be executed in several counterparts, each of which shall be deemed to be an original copy and all of which together shall  constitute one and the same instrument binding on all parties hereto, notwithstanding that all parties shall not have signed the same counterpart.   12.9 Governing Law.   This Agreement shall be governed by and construed in accordance with the laws of the State of Delaware; provided, however, that any cause of  action for violation of federal or state securities laws shall not be governed by this Section 12.9.   [Remainder of Page Intentionally Left Blank]   40   Source: TNP STRATEGIC RETAIL TRUST, INC., EX-10.3, 5/11/2009  |  Powered by Intelligize 

 

   IN WITNESS WHEREOF, the parties hereto have hereunder affixed their signatures to this Agreement of Limited Partnership, all as of the 31st day  of December, 2008.                               GENERAL PARTNER:                                   TNP STRATEGIC RETAIL TRUST, INC.                                 By:   /s/ Neil M. Miller                           Name:  Neil M. Miller                           Title:  Chief Financial Officer, Treasurer and Secretary                                                     LIMITED PARTNERS:                                   THOMPSON NATIONAL PROPERTIES, LLC                                 By:   /s/ Neil M. Miller                           Name:  Neil M. Miller                           Title:  Chief Operating Officer and General Counsel                                                     TNP STRATEGIC RETAIL OP HOLDINGS, LLC                                   By:  Thompson National Properties, LLC,           its Sole Member                       By: /s/ Neil M. Miller                      Name: Neil M. Miller                        Title:  Chief Operating Officer and General Counsel                    Source: TNP STRATEGIC RETAIL TRUST, INC., EX-10.3, 5/11/2009  |  Powered by Intelligize 

 

   EXHIBIT A   CONTRIBUTIONS AND INTEREST                                                                 Special             Special       Cash     Partnership    Partnership    Percentage    Percentage  Partner   Contribution    Units     Units     Interest     Interest   GENERAL PARTNER:                                                                                   TNP Strategic Retail Trust, Inc.   —     —     —     100%     —                                             ORIGINAL LIMITED PARTNERS:                                                                                   TNP Strategic Retail Advisor, LLC   $1,000     100     —     100%     —   TNP Strategic Retail OP Holdings, LLC   $1,000     —     100     —     100%                                             Totals   $2,000     100     100     100%     100%                                            Source: TNP STRATEGIC RETAIL TRUST, INC., EX-10.3, 5/11/2009  |  Powered by Intelligize 

 

   EXHIBIT B   NOTICE OF EXERCISE OF REDEMPTION RIGHT   In accordance with Section 8.5 of the Limited Partnership Agreement (the “Agreement”) of TNP Strategic Retail Operating Partnership, LP, the  undersigned hereby irrevocably (i) presents for redemption   Partnership Units in TNP Strategic Retail Operating Partnership, LP in accordance  with the terms of the Agreement and the Redemption Right referred to in Section 8.5 thereof, (ii) surrenders such Partnership Units and all right,  title and interest therein, and (iii) directs that the Cash Amount or REIT Shares Amount (as defined in the Agreement) as determined by the General  Partner deliverable upon exercise of the Redemption Right be delivered to the address specified below, and if REIT Shares (as defined in the  Agreement) are to be delivered, such REIT Shares be registered or placed in the name(s) and at the address(es) specified below.   If REIT Shares are to be issued, issue to:             Dated:   ,                      (Name of Limited Partner)                         (Signature of Limited Partner)                         (Mailing Address)                         (City) (State) (Zip Code)                 Signature Guaranteed by:                                 Name:                         Social Security or Tax I.D. Number:                Source: TNP STRATEGIC RETAIL TRUST, INC., EX-10.3, 5/11/2009  |  Powered by Intelligize 

 

EAST/79634104.1 1  Exhibit 10.1  FIRST AMENDMENT TO LIMITED PARTNERSHIP AGREEMENT  THIS FIRST AMENDMENT TO LIMITED PARTNERSHIP AGREEMENT (this “First  Amendment”) of TNP Strategic Retail Operating Partnership, LP, a Delaware limited partnership (the  “Partnership”), is entered into and effective as of March 12, 2012 by the sole general partner, TNP Strategic Retail  Trust, Inc., a Maryland corporation (the “General Partner”).  RECITALS  A. The Partnership is governed by that certain Limited Partnership Agreement entered into on  December 31, 2008 (the “Original Agreement”). Capitalized terms used by not defined herein shall have the  meaning ascribed to them in the Original Agreement. The term “Agreement” shall refer to the Original Agreement  as amended by this First Amendment.  B. The General Partner has determined that it is in the best interest of the Partnership to, in  accordance with Article 11 of the Original Agreement, amend the Original Agreement to include provisions  regarding the admission of new Limited Partners, and otherwise amend the Original Agreement as set forth herein.  Pursuant to Article 11 of the Original Agreement the consent of the General Partner (and no other partner) is  required in connection with such an amendment.  AGREEMENT  1. Additional Capital Contributions and Issuances of Additional Partnership Interests. Section 4.2(a)  of the Original Agreement is hereby amended by inserting the following Section 4.2(a)(iii) after the end of Section  4.2(a)(ii) of the Original Agreement:  (iii) Admittance of new holders of Partnership Units. Notwithstanding anything to the contrary  contained herein, upon the issuance of additional Partnership Interests by the General Partner in  accordance with the terms hereof, any holder of Limited Partnership Interests that is not already a  Partner shall be deemed admitted as a Limited Partner of the Partnership only upon (1) the prior  consent of the General Partner (and no consent of any other Limited Partner or Special OP Unitholders  shall be required), (2) the notation of such Person as a holder of Limited Partnership Interests in the  books and records of the Company, and (3) the compliance of such new holder of Limited Partnership  Interests with the reasonable requests of the General Partner in connection with documenting its  admittance to the Company. The General Partner is further authorized, from time to time, to amend  Exhibit A to this Agreement to reflect the admission of the holders of Limited Partnership Interests as  a Partner of the Company.  2. Entire Agreement. The Original Agreement, as modified by this First Amendment, constitutes the  entire and only agreement between the parties hereto with respect to the transactions contemplated therein. Except as  modified by this First Amendment, the Original Agreement remains unchanged and unmodified and in full force and  effect, and the parties hereto hereby ratify and affirm the same.  3. Counterparts. This First Amendment may be executed in any number of counterparts and it shall  be sufficient that the signature of each party appear on one or more such counterparts. All counterparts shall  collectively constitute a single agreement. Signatures to this First Amendment transmitted by facsimile or electronic  mail shall be treated as originals in all respects.  [SIGNATURE APPEARS ON THE FOLLOWING PAGE]    

 

EAST/79634104.1 2  IN WITNESS WHEREOF, the General Partner hereby consents to and enters into this First Amendment as  of the date above first written.  GENERAL PARTNER:  TNP Strategic Retail Trust, Inc.,   a Maryland corporation  By: /s/ James Wolford     Name: James Wolford      Its: CFO       Signature Page to First Amendment to Limited Partnership Agreement  

 

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