{"id":41381,"date":"2015-09-17T11:25:58","date_gmt":"2015-09-17T16:25:58","guid":{"rendered":"https:\/\/content.findlaw-admin.com\/ability-legal\/contracts\/uncategorized\/agreement-of-limited-partnership-eop-operating-lp.html"},"modified":"2015-09-17T11:25:58","modified_gmt":"2015-09-17T16:25:58","slug":"agreement-of-limited-partnership-eop-operating-lp","status":"publish","type":"corporate_contracts","link":"https:\/\/corporate.findlaw.com\/contracts\/formation\/agreement-of-limited-partnership-eop-operating-lp.html","title":{"rendered":"Agreement of Limited Partnership – EOP Operating LP"},"content":{"rendered":" 1\n -----------------------------------------\n\n SECOND AMENDED AND RESTATED\n\n AGREEMENT OF LIMITED PARTNERSHIP\n\n OF\n\n EOP OPERATING LIMITED PARTNERSHIP\n\n -----------------------------------------\n\n Dated as of June 19, 2000\n\n 2\n\n TABLE OF CONTENTS\n\nARTICLE I DEFINED TERMS.......................................................2\n\nARTICLE II ORGANIZATIONAL MATTERS............................................16\n Section 2.1 Organization..............................................16\n Section 2.2 Name......................................................16\n Section 2.3 Registered Office and Agent; Principal Office.............17\n Section 2.4 Term......................................................17\nARTICLE III PURPOSE..........................................................17\n Section 3.1 Purpose and Business......................................17\n Section 3.2 Powers....................................................17\nARTICLE IV CAPITAL CONTRIBUTIONS AND ISSUANCES OF \n PARTNERSHIP INTERESTS...................................................18\n Section 4.1 Capital Contributions of the Partners.....................18\n Section 4.2 Issuances of Partnership Interests........................18\n Section 4.3 No Preemptive Rights......................................20\n Section 4.4 Other Contribution Provisions.............................20\n Section 4.5 No Interest on Capital....................................20\n Section 4.6 Separate Agreements.......................................21\nARTICLE V DISTRIBUTIONS......................................................21\n Section 5.1 Requirement and Characterization of Distributions.........21\n Section 5.2 Amounts Withheld..........................................24\n Section 5.3 Distributions Upon Liquidation............................24\n Section 5.4 Revisions to Reflect Issuance of Partnership Interests....25\nARTICLE VI ALLOCATIONS.......................................................25\n Section 6.1 Allocations For Capital Account Purposes..................25\n Section 6.2 Revisions to Allocations to Reflect Issuance of \n Partnership Interests............................................27\nARTICLE VII MANAGEMENT AND OPERATIONS OF BUSINESS............................28\n Section 7.1 Management................................................28\n Section 7.2 Certificate of Limited Partnership........................32\n Section 7.3 Title to Partnership Assets...............................33\n Section 7.4 Reimbursement of the General Partner......................33\n Section 7.5 Outside Activities of the General Partner; \n Relationship of Shares to Partnership Units; Funding Debt........35\n Section 7.6 Transactions with Affiliates..............................37\n Section 7.7 Indemnification...........................................38\n Section 7.8 Liability of the General Partner..........................40\n Section 7.9 Other Matters Concerning the General Partner..............41\n Section 7.10 Reliance by Third Parties.................................42\n Section 7.11 Restrictions on General Partner's Authority...............43\n Section 7.12 Loans by Third Parties....................................44\nARTICLE VIII RIGHTS AND OBLIGATIONS OF LIMITED PARTNERS......................44\n Section 8.1 Limitation of Liability...................................44\n Section 8.2 Management of Business....................................44\n\n\n - i -\n\n\n\n 3\n Section 8.3 Outside Activities of Limited Partners....................45\n Section 8.4 Return of Capital.........................................45\n Section 8.5 Rights of Limited Partners Relating to the Partnership....45\n Section 8.6 Redemption Right..........................................47\nARTICLE IX BOOKS, RECORDS, ACCOUNTING AND REPORTS............................50\n Section 9.1 Records and Accounting....................................50\n Section 9.2 Fiscal Year...............................................50\n Section 9.3 Reports...................................................50\nARTICLE X TAX MATTERS........................................................51\n Section 10.1 Preparation of Tax Returns................................51\n Section 10.2 Tax Elections.............................................51\n Section 10.3 Tax Matters Partner.......................................51\n Section 10.4 Organizational Expenses...................................53\n Section 10.5 Withholding...............................................53\nARTICLE XI TRANSFERS AND WITHDRAWALS.........................................54\n Section 11.1 Transfer..................................................54\n Section 11.2 Transfers of Partnership Interests of General Partner.....54\n Section 11.3 Limited Partners' Rights to Transfer......................55\n Section 11.4 Substituted Limited Partners..............................57\n Section 11.5 Assignees.................................................58\n Section 11.6 General Provisions........................................58\nARTICLE XII ADMISSION OF PARTNERS............................................60\n Section 12.1 Admission of a Successor General Partner..................60\n Section 12.2 Admission of Additional Limited Partners..................61\n Section 12.3 Amendment of Agreement and Certificate of Limited\n Partnership......................................................61\nARTICLE XIII DISSOLUTION AND LIQUIDATION.....................................62\n Section 13.1 Dissolution...............................................62\n Section 13.2 Winding Up................................................63\n Section 13.3 Compliance with Timing Requirements of Regulations;\n Restoration of Deficit Capital Accounts..........................64\n Section 13.4 Rights of Limited Partners................................66\n Section 13.5 Notice of Dissolution.....................................66\n Section 13.6 Cancellation of Certificate of Limited Partnership........66\n Section 13.7 Reasonable Time for Winding Up............................66\n Section 13.8 Waiver of Partition.......................................67\n Section 13.9 Liability of Liquidator...................................67\nARTICLE XIV AMENDMENT OF PARTNERSHIP AGREEMENT;\n MEETINGS................................................................67\n Section 14.1 Amendments................................................67\n Section 14.2 Meetings of the Partners..................................69\nARTICLE XV GENERAL PROVISIONS................................................70\n Section 15.1 Addresses and Notice......................................70\n Section 15.2 Titles and Captions.......................................70\n Section 15.3 Pronouns and Plurals......................................70\n\n\n - ii -\n\n 4\n\n Section 15.4 Further Action............................................70\n Section 15.5 Binding Effect............................................70\n Section 15.6 Creditors.................................................70\n Section 15.7 Waiver....................................................71\n Section 15.8 Counterparts..............................................71\n Section 15.9 Applicable Law............................................71\n Section 15.10 Invalidity of Provisions..................................71\n Section 15.11 Power of Attorney.........................................71\n Section 15.12 Entire Agreement..........................................73\n Section 15.13 No Rights as Shareholders.................................73\n Section 15.14 Limitation to Preserve REIT Status........................73\n\n\n - iii -\n\n 5\n\n\n EXHIBIT A\n PARTNERS AND PARTNERSHIP INTERESTS\n\n EXHIBIT B\n CAPITAL ACCOUNT MAINTENANCE\n\n EXHIBIT C\n SPECIAL ALLOCATION RULES\n\n EXHIBIT D\n NOTICE OF REDEMPTION\n\n EXHIBIT E\n PROTECTED PARTNERS AND PROTECTED AMOUNTS\n\n EXHIBIT E-1\n (CAP Agreement)\n\n EXHIBIT E-2\n (1120 Agreement)\n\n EXHIBIT E-3\n (Wright Runstad Agreement)\n\n EXHIBIT E-4\n (Galbreath Agreement)\n\n EXHIBIT E-5\n (Palo Alto Square Agreement)\n\n EXHIBIT E-6\n (Cornerstone Agreement)\n\n\n - iv -\n\n\n 6\n\n\n\n\n\n\n ATTACHMENT A\n (Series A Preferred Units)\n\n ATTACHMENT B\n (Series B Preferred Units)\n\n ATTACHMENT C\n (Series C Preferred Units)\n\n ATTACHMENT D\n (Series D Preferred Units)\n\n\n\n\n\n - v -\n\n\n\n 7\n\n SECOND AMENDED AND RESTATED\n AGREEMENT OF LIMITED PARTNERSHIP\n OF\n EOP OPERATING LIMITED PARTNERSHIP\n\n THIS SECOND AMENDED AND RESTATED AGREEMENT OF LIMITED\nPARTNERSHIP, dated as of June 19, 2000, is entered into by and among Equity\nOffice Properties Trust, a Maryland real estate investment trust, as the General\nPartner, and the Persons whose names are set forth on Exhibit A hereto as\nLimited Partners, together with any other Persons who become Partners in the\nPartnership as provided herein.\n\n WHEREAS, Equity Office Properties Trust, Zell\/Merrill Lynch Real\nEstate Opportunity Partners Limited Partnership II, an Illinois limited\nPartnership, and certain other persons named therein entered into an Agreement\nof Limited Partnership of EOP Operating Limited Partnership dated as of July 3,\n1997, pursuant to which the Partnership was formed (the \"Original Partnership\nAgreement\");\n\n WHEREAS, the General Partner and the other Partners in the\nPartnership entered into eleven amendments to the Original Partnership Agreement\n(the \"Prior Amendments\") and 20 addenda to the Original Partnership Agreement\neffecting the admission of Additional Limited Partners to the Partnership, the\nwithdrawal of certain Partners from the Partnership, and, in some cases, certain\namendments to provisions of the Original Partnership Agreement made in\nconnection therewith (the \"Prior Addenda\");\n\n WHEREAS, the General Partner and the Persons named on Exhibit A\nhereto as Limited Partners entered into the First Amended and Restated Agreement\nof Limited Partnership, dated as of May 1, 2000, to incorporate the Original\nPartnership Agreement, the Prior Amendments, and the Addenda (the \"First Amended\nand Restated Agreement\"); and\n\n WHEREAS, in connection with the merger of Cornerstone Properties\nLimited Partnership, the General Partner and the other Partners in the\nPartnership now desire to enter into amendments to the First Amended and\nRestated Agreement of Limited Partnership by entering into this Second Amended\nand Restated Agreement of Limited Partnership;\n\n NOW, THEREFORE, in consideration of the mutual covenants set\nforth herein, and for other good and valuable consideration, the receipt and\nsufficiency of which are hereby acknowledged, the parties hereto hereby amend\nand restate the First Amended and Restated Agreement of Limited Partnership in\nits entirety and agree to continue the Partnership as a limited partnership\nunder the Delaware Revised Uniform Limited Partnership Act, as amended from time\nto time, as follows:\n\n 8\n ARTICLE I\n DEFINED TERMS\n\n The following definitions shall be for all purposes, unless\notherwise clearly indicated to the contrary, applied to the terms used in this\nAgreement.\n\n \"Act\" means the Delaware Revised Uniform Limited Partnership Act,\nas it may be amended from time to time, and any successor to such statute.\n\n \"Additional Limited Partner\" means a Person admitted to the\nPartnership as a Limited Partner pursuant to Section 12.2 hereof and who is\nshown as such on the books and records of the Partnership.\n\n \"Adjusted Capital Account\" means the Capital Account maintained\nfor each Partner as of the end of each Partnership Year (i) increased by any\namounts which such Partner is obligated to restore pursuant to any provision of\nthis Agreement or is deemed to be obligated to restore pursuant to the\npenultimate sentences of Regulations Sections 1.704-2(g)(1) and 1.704-2(i)(5)\nand (ii) decreased by the items described in Regulations Sections\n1.704-1(b)(2)(ii)(d)(4), 1.704-1(b)(2)(ii)(d)(5) and 1.704-1(b)(2)(ii)(d)(6).\nThe foregoing definition of Adjusted Capital Account is intended to comply with\nthe provisions of Regulations Section 1.704-1(b)(2)(ii)(d) and shall be\ninterpreted consistently therewith.\n\n \"Adjusted Capital Account Deficit\" means, with respect to any\nPartner, the deficit balance, if any, in such Partner's Adjusted Capital Account\nas of the end of the relevant Partnership Year.\n\n \"Adjusted Property\" means any property the Carrying Value of\nwhich has been adjusted pursuant to Exhibit B.\n\n \"Adjustment Date\" has the meaning set forth in Section 4.2.B.\n\n \"Affiliate\" means, with respect to any Person, (i) any Person\ndirectly or indirectly controlling, controlled by or under common control with\nsuch Person, (ii) any Person owning or controlling ten percent (10%) or more of\nthe outstanding voting interests of such Person, (iii) any Person of which such\nPerson owns or controls ten percent (10%) or more of the voting interests or\n(iv) any officer, director, general partner or trustee of such Person or any\nPerson referred to in clauses (i), (ii), and (iii) above. For purposes of this\ndefinition, \"control,\" when used with respect to any Person, means the power to\ndirect the management and policies of such Person, directly or indirectly,\nwhether through the ownership of voting securities, by contract or otherwise,\nand the terms \"controlling\" and \"controlled\" have meanings correlative to the\nforegoing.\n\n \"Aggregate Protected Amount\" means the aggregate balances of the\nProtected Amounts, if any, of all Protected Partners, as determined on the date\nin question.\n\n \"Agreed Value\" means (i) in the case of any Contributed Property,\nthe 704(c) Value of such property as of the time of its contribution to the\nPartnership, reduced by any liabilities either assumed by the Partnership upon\nsuch contribution or to which such \n\n\n - 2 -\n\n\n 9\n\nproperty is subject when contributed, as the same is reflected in the books and\nrecords of the Partnership; and (ii) in the case of any property distributed to\na Partner by the Partnership, the Partnership's Carrying Value of such property\nat the time such property is distributed, reduced by any indebtedness either\nassumed by such Partner upon such distribution or to which such property is\nsubject at the time of distribution as determined under Section 752 of the Code\nand the regulations thereunder.\n\n \"Agreement\" means this Second Amended and Restated Agreement of\nLimited Partnership, as it may be amended, supplemented or restated from time to\ntime.\n\n \"Assignee\" means a Person to whom one or more Partnership Units\nhave been transferred in a manner permitted under this Agreement, but who has\nnot become a Substituted Limited Partner, and who has the rights set forth in\nSection 11.5.\n\n \"Available Cash\" means, with respect to any period for which such\ncalculation is being made:\n\n (a) all cash revenues and funds received by the Partnership from\nwhatever source (excluding the proceeds of any Capital Contribution) plus the\namount of any reduction (including, without limitation, a reduction resulting\nbecause the General Partner determines such amounts are no longer necessary) in\nreserves of the Partnership, which reserves are referred to in clause (b)(iv)\nbelow;\n\n (b) less the sum of the following (except to the extent made with\nthe proceeds of any Capital Contribution):\n\n (i) all interest, principal and other debt payments made\nduring such period by the Partnership,\n\n (ii) all cash expenditures (including capital expenditures)\nmade by the Partnership during such period,\n\n (iii) investments in any entity (including loans made\nthereto) to the extent that such investments are permitted under this Agreement\nand are not otherwise described in clauses (b)(i) or (ii), and\n\n (iv) the amount of any increase in reserves established\nduring such period which the General Partner determines is necessary or\nappropriate in its sole and absolute discretion.\n\n Notwithstanding the foregoing, Available Cash shall not include\nany cash received or reductions in reserves, or take into account any\ndisbursements made or reserves established, after commencement of the\ndissolution and liquidation of the Partnership.\n\n \"Book-Tax Disparities\" means, with respect to any item of\nContributed Property or Adjusted Property, as of the date of any determination,\nthe difference between the Carrying Value of such Contributed Property or\nAdjusted Property and the adjusted basis thereof for federal income tax purposes\nas of such date. A Partner's share of the \n\n\n - 3 -\n\n 10\n\nPartnership's Book-Tax Disparities in all of its Contributed Property and\nAdjusted Property will be reflected by the difference between such Partner's\nCapital Account balance as maintained pursuant to Exhibit B and the hypothetical\nbalance of such Partner's Capital Account computed as if it had been maintained\nstrictly in accordance with federal income tax accounting principles.\n\n \"Business Day\" means any day except a Saturday, Sunday or other\nday on which commercial banks in Chicago, Illinois are authorized or required by\nlaw to close.\n\n \"Capital Account\" means the Capital Account maintained for a\nPartner pursuant to Exhibit B.\n\n \"Capital Contribution\" means, with respect to any Partner, any\ncash, cash equivalents or the Agreed Value of Contributed Property which such\nPartner contributes or is deemed to contribute to the Partnership pursuant to\nSection 4.1 or 4.2.\n\n \"Carrying Value\" means (i) with respect to a Contributed Property\nor Adjusted Property, the 704(c) Value of such property reduced (but not below\nzero) by all Depreciation with respect to such Contributed Property or Adjusted\nProperty, as the case may be, charged to the Partners' Capital Accounts and (ii)\nwith respect to any other Partnership property, the adjusted basis of such\nproperty for federal income tax purposes, all as of the time of determination.\nThe Carrying Value of any property shall be adjusted from time to time in\naccordance with Exhibit B, and to reflect changes, additions (including capital\nimprovements thereto) or other adjustments to the Carrying Value for\ndispositions and acquisitions of Partnership properties, as deemed appropriate\nby the General Partner.\n\n \"Cash Amount\" means an amount of cash equal to the Value on the\nValuation Date of the Shares Amount.\n\n \"Certificate\" means the Certificate of Limited Partnership\nrelating to the Partnership filed in the office of the Delaware Secretary of\nState, as amended from time to time in accordance with the terms hereof and the\nAct.\n\n \"Class A\" has the meaning set forth in Section 5.1.C.\n\n \"Class A Share\" has the meaning set forth in Section 5.1.C.\n\n \"Class A Unit\" means any Partnership Unit that is not\nspecifically designated by the General Partner as being of another specified\nclass of Partnership Units.\n\n \"Class B\" has the meaning set forth in Section 5.1.C.\n\n \"Class B Share\" has the meaning set forth in Section 5.1.C.\n\n \"Class B Unit\" means a Partnership Unit that is specifically\ndesignated by the General Partner as being a Class B Unit.\n\n \"Code\" means the Internal Revenue Code of 1986, as amended and in\neffect from time to time, as interpreted by the applicable regulations\nthereunder. Any reference \n\n\n - 4 -\n\n\n 11\n\nherein to a specific section or sections of the Code shall be deemed to include\na reference to any corresponding provision of future law.\n\n \"Consent\" means the consent or approval of a proposed action by a\nPartner given in accordance with Section 14.2.\n\n \"Consent of the Outside Limited Partners\" means the Consent of\nLimited Partners (excluding for this purpose any Limited Partnership Interests\nheld by the General Partner, any Person of which the General Partner owns or\ncontrols more than fifty percent (50%) of the voting interests and any Person\ndirectly or indirectly owning or controlling more than fifty percent (50%) of\nthe outstanding voting interests of the General Partner) holding Percentage\nInterests that are greater than fifty percent (50%) of the aggregate Percentage\nInterest of all Limited Partners who are not excluded for the purposes hereof.\n\n \"Consolidation\" means (i) the transactions whereby the\nPartnership acquired interests in certain office properties owned by the\nOpportunity Partnerships and certain asset management and property management\nbusinesses that provided services to those properties and to other office\nproperties, in exchange for Partnership Units, and (ii) the merger of the ZML\nInvestors, Inc., ZML Investors II, Inc., Zell\/Merrill Lynch Real Estate\nOpportunity Partners III Trust and Zell\/Merrill Lynch Real Estate Opportunity\nPartners IV Trust with and into Equity Office Properties Trust, all as described\nin a Joint Proxy Statement\/Offering Memorandum dated March 25, 1997.\n\n \"Contributed Property\" means each property or other asset\ncontributed to the Partnership, in such form as may be permitted by the Act, but\nexcluding cash contributed or deemed contributed to the Partnership. Once the\nCarrying Value of a Contributed Property is adjusted pursuant to Exhibit B, such\nproperty shall no longer constitute a Contributed Property for purposes of\nExhibit B, but shall be deemed an Adjusted Property for such purposes.\n\n \"Conversion Factor\" means 1.0; provided that, if the General\nPartner Entity (i) declares or pays a dividend on its outstanding Shares in\nShares or makes a distribution to all holders of its outstanding Shares in\nShares, (ii) subdivides its outstanding Shares or (iii) combines its outstanding\nShares into a smaller number of Shares, the Conversion Factor shall be adjusted\nby multiplying the Conversion Factor by a fraction, the numerator of which shall\nbe the number of Shares issued and outstanding on the record date for such\ndividend, distribution, subdivision or combination (assuming for such purposes\nthat such dividend, distribution, subdivision or combination has occurred as of\nsuch time) and the denominator of which shall be the actual number of Shares\n(determined without the above assumption) issued and outstanding on the record\ndate for such dividend, distribution, subdivision or combination; and provided\nfurther that if an entity shall cease to be the General Partner Entity (the\n\"Predecessor Entity\") and another entity shall become the General Partner Entity\n(the \"Successor Entity\"), the Conversion Factor shall be adjusted by multiplying\nthe Conversion Factor by a fraction, the numerator of which is the Value of one\nShare of the Predecessor Entity, determined as of the date when the Successor\nEntity becomes the General Partner Entity, and the denominator of which is the\nValue of one Share of the Successor Entity, determined as of that same date.\n(For purposes of the second proviso in the preceding sentence, if any\nshareholders of the Predecessor Entity will \n\n\n - 5 -\n\n 12\n\nreceive consideration in connection with the transaction in which the Successor\nEntity becomes the General Partner Entity, the numerator in the fraction\ndescribed above for determining the adjustment to the Conversion Factor (that\nis, the Value of one Share of the Predecessor Entity) shall be the sum of the\ngreatest amount of cash and the fair market value (as determined in good faith\nby the General Partner) of any securities and other consideration that the\nholder of one Share in the Predecessor Entity could have received in such\ntransaction (determined without regard to any provisions governing fractional\nshares).) Any adjustment to the Conversion Factor shall become effective\nimmediately after the effective date of the event retroactive to the record\ndate, if any, for the event giving rise thereto, it being intended that (x)\nadjustments to the Conversion Factor are to be made to avoid unintended dilution\nor anti-dilution as a result of transactions in which Shares are issued,\nredeemed or exchanged without a corresponding issuance, redemption or exchange\nof Partnership Units and (y) if a Specified Redemption Date shall fall between\nthe record date and the effective date of any event of the type described above,\nthat the Conversion Factor applicable to such redemption shall be adjusted to\ntake into account such event.\n\n \"Convertible Funding Debt\" has the meaning set forth in Section\n7.5.F.\n\n \"Debt\" means, as to any Person, as of any date of determination,\n(i) all indebtedness of such Person for borrowed money or for the deferred\npurchase price of property or services, (ii) all amounts owed by such Person to\nbanks or other Persons in respect of reimbursement obligations under letters of\ncredit, surety bonds and other similar instruments guaranteeing payment or other\nperformance of obligations by such Person, (iii) all indebtedness for borrowed\nmoney or for the deferred purchase price of property or services secured by any\nlien on any property owned by such Person, to the extent attributable to such\nPerson's interest in such property, even though such Person has not assumed or\nbecome liable for the payment thereof, and (iv) obligations of such Person\nincurred in connection with entering into a lease which, in accordance with\ngenerally accepted accounting principles, should be capitalized.\n\n \"Declaration of Trust\" means the Articles of Amendment and\nRestatement of Declaration of Trust of Equity Office Properties Trust filed in\nthe State of Maryland on July 9, 1997, as amended or restated from time to time.\n\n \"Deemed Partnership Interest Value\" means, as of any date with\nrespect to any class of Partnership Interests, the Deemed Value of the\nPartnership Interest of such class multiplied by the applicable Partner's\nPercentage Interest of such class.\n\n \"Deemed Value of the Partnership Interest\" means, as of any date\nwith respect to any class of Partnership Interests, (a) if the common shares of\nbeneficial interest (or other comparable equity interests) of the General\nPartner Entity are Publicly Traded (i) the total number of shares of beneficial\ninterest (or other comparable equity interest) of the General Partner Entity\ncorresponding to such class of Partnership Interest (as provided for in Section\n4.2.B) issued and outstanding as of the close of business on such date\n(excluding any treasury shares) multiplied by the Value of a share of such\nbeneficial interest (or other comparable equity interest) on such date divided\nby (ii) the Percentage Interests of the General Partner, held directly or\nindirectly through another entity, in such \n\n\n - 6 -\n\n\n 13\n\nclass of Partnership Interests on such date, and (b) otherwise, the aggregate\nValue of such class of Partnership Interests determined as set forth in the\nfourth and fifth sentences of the definition of Value. For purposes of clause\n(a) of the preceding sentence, \"Value\" means the average of the daily market\nprice of such corresponding shares of beneficial interest (or other comparable\nequity interests) of the General Partner Entity for such number of consecutive\ntrading days or the Business Day immediately preceding the date with respect to\nwhich Value must be determined (which number of days or the Business Day shall\nbe determined by the General Partner in its sole discretion), with the market\nprice for each such trading day being the closing price, regular way, on such\nday, or if no such sale takes place on such day, the average of the closing bid\nand asked prices on such day. Notwithstanding any of the foregoing, with respect\nto any class or series of Partnership Interests that is entitled to a preference\nas compared to the class of Partnership Interests corresponding to common shares\nof beneficial interests (or other comparable equity interests) of the General\nPartner Entity, \"Value\" means the stated liquidation preference or value of such\nclass or series of Partnership Interests provided in the instrument establishing\nsuch class or series of Partnership Interests (unless otherwise provided in such\ninstrument).\n\n \"Depreciation\" means, for each fiscal year, an amount equal to\nthe federal income tax depreciation, amortization, or other cost recovery\ndeduction allowable with respect to an asset for such year, except that if the\nCarrying Value of an asset differs from its adjusted basis for federal income\ntax purposes at the beginning of such year or other period, Depreciation shall\nbe an amount which bears the same ratio to such beginning Carrying Value as the\nfederal income tax depreciation, amortization, or other cost recovery deduction\nfor such year bears to such beginning adjusted tax basis; provided, however,\nthat if the federal income tax depreciation, amortization, or other cost\nrecovery deduction for such year is zero, Depreciation shall be determined with\nreference to such beginning Carrying Value using any reasonable method selected\nby the General Partner.\n\n \"Distribution Period\" has the meaning set forth in Section 5.1.C.\n\n \"Effective Date\" means the date of the closing of the Consolidation.\n\n \"ERISA\" means the Employee Retirement Income Security Act of 1974, \nas amended.\n\n \"ERISA Partner\" means either any (a) Limited Partner or (b)\nholder of shares of beneficial interest in the General Partner that received\nsuch Shares in the mergers of ZML Investors, Inc., ZML Investors II, Inc.,\nZell\/Merrill Lynch Real Estate Opportunity Partners III Trust, and Zell\/Merrill\nLynch Real Estate Opportunity Partners IV Trust into the General Partner, and\nwhich Limited Partner or shareholder is either (i) an employee benefit plan\nsubject to Title I of ERISA or section 4975 of the Code, or (ii) a nominee for\nor a trust established pursuant to such employee benefit plan, or (iii) which is\nan entity whose underlying assets include assets of such employee benefit plan\nby reason of such plan's investment in such entity.\n\n\n - 7 -\n\n\n 14\n\n \"ERISA Plan\" means an \"employee benefit plan\" as that term is\ndefined in 29 U.S.C. sec. 1002(3), and which is not exempt from regulation under\nERISA by virtue of 29 U.S.C. sec. 1003(b).\n\n \"Exchange Act\" means the Securities Exchange Act of 1934, as\namended.\n\n \"Fair Value\" shall have the meaning described in Section\n7.09.E(iv).\n\n \"Funding Debt\" means the incurrence of any Debt by or on behalf\nof the General Partner Entity for the purpose of providing funds to the\nPartnership.\n\n \"General Partner\" means Equity Office Properties Trust, a\nMaryland real estate investment trust, or its successor, as general partner of\nthe Partnership.\n\n \"General Partner Entity\" means the General Partner; provided,\nhowever, that if (i) the common shares of beneficial interest (or other\ncomparable equity interests) of the General Partner are at any time not Publicly\nTraded and (ii) the common shares of beneficial interest (or other comparable\nequity interests) of an entity that owns, directly or indirectly, fifty percent\n(50%) or more of the common shares of beneficial interest (or other comparable\nequity interests) of the General Partner are Publicly Traded, the term \"General\nPartner Entity\" shall refer to such entity whose common shares of beneficial\ninterest (or other comparable equity securities) are Publicly Traded. If both\nrequirements set forth in clauses (i) and (ii) above are not satisfied, then the\nterm \"General Partner Entity\" shall mean the General Partner.\n\n \"General Partnership Interest\" means a Partnership Interest held\nby the General Partner that is a general partnership interest. A General\nPartnership Interest may be expressed as a number of Partnership Units.\n\n \"General Partner Payment\" has the meaning set forth in Section\n15.14 hereof.\n\n \"IRS\" means the Internal Revenue Service, which administers the\ninternal revenue laws of the United States.\n\n \"Immediate Family\" means, with respect to any natural Person,\nsuch natural Person's spouse, parents, descendants, nephews, nieces, brothers,\nand sisters.\n\n \"Incapacity\" or \"Incapacitated\" means, (i) as to any individual\nwho is a Partner, death, total physical disability or entry by a court of\ncompetent jurisdiction adjudicating such Partner incompetent to manage his or\nher Person or estate, (ii) as to any corporation which is a Partner, the filing\nof a certificate of dissolution, or its equivalent, for the corporation or the\nrevocation of its charter, (iii) as to any partnership or limited liability\ncompany which is a Partner, the dissolution and commencement of winding up of\nthe partnership or limited liability company, (iv) as to any estate which is a\nPartner, the distribution by the fiduciary of the estate's entire interest in\nthe Partnership, (v) as to any trustee of a trust which is a Partner, the\ntermination of the trust (but not the substitution of a new trustee) or (vi) as\nto any Partner, the bankruptcy of such Partner. For purposes of this definition,\nbankruptcy of a Partner shall be deemed to have occurred when (a) the \n\n\n - 8 -\n\n 15\nPartner commences a voluntary proceeding seeking liquidation, reorganization or\nother relief under any bankruptcy, insolvency or other similar law now or\nhereafter in effect, (b) the Partner is adjudged as bankrupt or insolvent, or a\nfinal and nonappealable order for relief under any bankruptcy, insolvency or\nsimilar law now or hereafter in effect has been entered against the Partner, (c)\nthe Partner executes and delivers a general assignment for the benefit of the\nPartner's creditors, (d) the Partner files an answer or other pleading admitting\nor failing to contest the material allegations of a petition filed against the\nPartner in any proceeding of the nature described in clause (b) above, (e) the\nPartner seeks, consents to or acquiesces in the appointment of a trustee,\nreceiver or liquidator for the Partner or for all or any substantial part of the\nPartner's properties, (f) any proceeding seeking liquidation, reorganization or\nother relief under any bankruptcy, insolvency or other similar law now or\nhereafter in effect has not been dismissed within one hundred twenty (120) days\nafter the commencement thereof, (g) the appointment without the Partner's\nconsent or acquiescence of a trustee, receiver of liquidator has not been\nvacated or stayed within ninety (90) days of such appointment or (h) an\nappointment referred to in clause (g) is not vacated within ninety (90) days\nafter the expiration of any such stay.\n\n \"Indemnitee\" means (i) any Person made a party to a proceeding by\nreason of its status as (A) the General Partner, (B) a Limited Partner, or (C) a\ntrustee, director or officer of the Partnership, or the General Partner and (ii)\nsuch other Persons (including Affiliates of the General Partner, a Limited\nPartner or the Partnership) as the General Partner may designate from time to\ntime (whether before or after the event giving rise to potential liability), in\nits sole and absolute discretion.\n\n \"Limited Partner\" means any Person named as a Limited Partner in\nExhibit A, as such Exhibit may be amended from time to time, or any Substituted\nLimited Partner or Additional Limited Partner, in such Person's capacity as a\nLimited Partner in the Partnership.\n\n \"Limited Partnership Interest\" means a Partnership Interest of a\nLimited Partner in the Partnership representing a fractional part of the\nPartnership Interests of all Limited Partners and includes any and all benefits\nto which the holder of such a Partnership Interest may be entitled as provided\nin this Agreement, together with all obligations of such Person to comply with\nthe terms and provisions of this Agreement. A Limited Partnership Interest may\nbe expressed as a number of Partnership Units.\n\n \"Liquidating Event\" has the meaning set forth in Section 13.1.\n\n \"Liquidator\" has the meaning set forth in Section 13.2.A.\n\n \"Net Income\" means, for any taxable period, the excess, if any,\nof the Partnership's items of income and gain for such taxable period over the\nPartnership's items of loss and deduction for such taxable period. The items\nincluded in the calculation of Net Income shall be determined in accordance with\nExhibit B. If an item of income, gain, loss or deduction that has been included\nin the initial computation of Net Income is subjected to the special allocation\nrules in Exhibit C, Net Income or the resulting Net Loss, whichever the case may\nbe, shall be recomputed without regard to such item.\n\n - 9 -\n 16\n\n \"Net Loss\" means, for any taxable period, the excess, if any, of\nthe Partnership's items of loss and deduction for such taxable period over the\nPartnership's items of income and gain for such taxable period. The items\nincluded in the calculation of Net Loss shall be determined in accordance with\nExhibit B. If an item of income, gain, loss or deduction that has been included\nin the initial computation of Net Loss is subjected to the special allocation\nrules in Exhibit C, Net Loss or the resulting Net Income, whichever the case may\nbe, shall be recomputed without regard to such item.\n\n \"New Securities\" means (i) any rights, options, warrants or\nconvertible or exchangeable securities having the right to subscribe for or\npurchase Shares, excluding grants under any Share Option Plan, or (ii) any Debt\nissued by the General Partner Entity that provides any of the rights described\nin clause (i).\n\n \"Nonrecourse Built-in Gain\" means, with respect to any\nContributed Properties or Adjusted Properties that are subject to a mortgage or\nnegative pledge securing a Nonrecourse Liability, the amount of any taxable gain\nthat would be allocated to the Partners pursuant to Section 2.B of Exhibit C if\nsuch properties were disposed of in a taxable transaction in full satisfaction\nof such liabilities and for no other consideration.\n\n \"Nonrecourse Deductions\" has the meaning set forth in Regulations\nSection 1.704-2(b)(1), and the amount of Nonrecourse Deductions for a\nPartnership Year shall be determined in accordance with the rules of Regulations\nSection 1.704-2(c).\n\n \"Nonrecourse Liability\" has the meaning set forth in Regulations\nSection 1.752-1(a)(2).\n\n \"Notice of Redemption\" means a Notice of Redemption substantially\nin the form of Exhibit D.\n\n \"Opportunity Partnerships\" means, Zell\/Merrill Lynch Real Estate\nOpportunity Partners Limited Partnership, Zell\/Merrill Lynch Real Estate\nOpportunity Partners Limited Partnership II, Zell\/Merrill Lynch Real Estate\nOpportunity Partners Limited Partnership III, and Zell\/Merrill Lynch Real Estate\nOpportunity Partners Limited Partnership IV.\n\n \"Partner\" means the General Partner or a Limited Partner, and\n\"Partners\" means the General Partner and the Limited Partners.\n\n \"Partner Minimum Gain\" means an amount, with respect to each\nPartner Nonrecourse Debt, equal to the Partnership Minimum Gain that would\nresult if such Partner Nonrecourse Debt were treated as a Nonrecourse Liability,\ndetermined in accordance with Regulations Section 1.704-2(i)(3).\n\n \"Partner Nonrecourse Debt\" has the meaning set forth in\nRegulations Section 1.704-2(b)(4).\n\n \"Partner Nonrecourse Deductions\" has the meaning set forth in\nRegulations Section 1.704-2(i), and the amount of Partner Nonrecourse Deductions\nwith respect to a \n\n\n - 10 -\n 17\n\n\nPartner Nonrecourse Debt for a Partnership Year shall be determined in\naccordance with the rules of Regulations Section 1.704-2(i)(2).\n\n \"Partnership\" means the limited partnership formed under the Act\nupon the terms and conditions set forth in the Original Partnership Agreement\nand continued pursuant to this Agreement, or any successor to such limited\npartnership.\n\n \"Partnership Interest\" means a Limited Partnership Interest or a\nGeneral Partnership Interest and includes any and all benefits to which the\nholder of such a Partnership Interest may be entitled as provided in this\nAgreement, together with all obligations of such Person to comply with the terms\nand provisions of this Agreement. A Partnership Interest may be expressed as a\nnumber of Partnership Units.\n\n \"Partnership Minimum Gain\" has the meaning set forth in\nRegulations Section 1.704-2(b)(2), and the amount of Partnership Minimum Gain,\nas well as any net increase or decrease in Partnership Minimum Gain, for a\nPartnership Year shall be determined in accordance with the rules of Regulations\nSection 1.704-2(d).\n\n \"Partnership Record Date\" means the record date established by\nthe General Partner either (i) for the distribution of Available Cash pursuant\nto Section 5.1 hereof, which record date shall be the same as the record date\nestablished by the General Partner Entity for a distribution to its shareholders\nof some or all of its portion of such distribution, or (ii) if applicable, for\ndetermining the Partners entitled to vote on or consent to any proposed action\nfor which the consent or approval of the Partners is sought pursuant to Section\n14.2 hereof.\n\n \"Partnership Unit\" means a fractional, undivided share of the\nPartnership Interests of all Partners issued pursuant to Sections 4.1 and 4.2,\nand includes Class A Units, Class B Units, Series A Preferred Units, Series B\nPreferred Units, Series C Preferred Units, and any other classes or series of\nPartnership Units established after the date hereof. The number of Partnership\nUnits outstanding and the Percentage Interests in the Partnership represented by\nsuch Partnership Units are set forth in Exhibit A, as such Exhibit may be\namended from time to time.\n\n \"Partnership Year\" means the fiscal year of the Partnership,\nwhich shall be the calendar year.\n\n \"Percentage Interest\" means, as to a Partner holding a class of\nPartnership Interests, its interest in such class, determined by dividing the\nPartnership Units of such class owned by such Partner by the total number of\nPartnership Units of such class then outstanding as specified in Exhibit A, as\nsuch exhibit may be amended from time to time, multiplied by the aggregate\nPercentage Interest allocable to such class of Partnership Interests. If the\nPartnership shall at any time have outstanding more than one class of\nPartnership Interests, the Percentage Interest attributable to each class of\nPartnership Interests shall be determined as set forth in Section 4.2.B.\n\n \"Person\" means a natural person, partnership (whether general or\nlimited), trust, estate, association, corporation, limited liability company,\nunincorporated \n\n\n\n - 11 -\n 18\n\n\norganization, custodian, nominee or any other individual or entity in its own or\nany representative capacity.\n\n \"Predecessor Entity\" has the meaning set forth in the \ndefinition of \"Conversion Factor\" herein.\n\n \"Protected Amount\" means the amount specified on Exhibit E with\nrespect to any Protected Partner, as such Exhibit may be amended from time to\ntime.\n\n \"Protected Partner\" means a Partner designated as a Protected\nPartner on Exhibit E, as such Exhibit may be amended from time to time, which\nProtected Partner is obligated to make certain contributions, not in excess of\nsuch Protected Partner's Protected Amount, to the Partnership with respect to\nany deficit balance in such Partner's Capital Account upon the occurrence of\ncertain events. A Protected Partner who is obligated to make any such\ncontribution only upon liquidation of the Partnership shall be designated on\nExhibit E as a Part I Protected Partner and a Protected Partner who is obligated\nto make any such contribution to the Partnership either upon liquidation of the\nPartnership or upon liquidation of such Protected Partner's Partnership Interest\nshall be designated on Exhibit E as a Part II Protected Partner.\n\n \"Publicly Traded\" means listed or admitted to trading on the New\nYork Stock Exchange, the American Stock Exchange or another national securities\nexchange or designated for quotation on the NASDAQ National Market, or any\nsuccessor to any of the foregoing.\n\n \"Qualified REIT Subsidiary\" means any Subsidiary of the General\nPartner that is a \"qualified REIT subsidiary\" within the meaning of Section\n856(i) of the Code.\n\n \"Qualified Transferee\" means an \"Accredited Investor\" as defined\nin Rule 501 promulgated under the Securities Act.\n\n \"Recapture Income\" means any gain recognized by the Partnership\n(computed without regard to any adjustment required by Section 734 or Section\n743 of the Code) upon the disposition of any property or asset of the\nPartnership, which gain is characterized either as ordinary income or as\n\"unrecaptured Section 1250 gain\" (as defined in Section 1(h)(7) of the Code\nbecause it represents the recapture of deductions previously taken with respect\nto such property or asset.\n\n \"Recourse Liabilities\" means the amount of liabilities owed by\nthe Partnership (other than Nonrecourse Liabilities and liabilities to which\nPartner Nonrecourse Deductions are attributable in accordance with Section\n1.704-(2)(i) of the Regulations).\n\n \"Redeeming Partner\" has the meaning set forth in Section 8.6.A.\n\n \"Redemption Amount\" means either the Cash Amount or the Shares\nAmount, as determined by the General Partner, in its sole and absolute\ndiscretion; provided that if the Shares are not Publicly Traded at the time a\nRedeeming Partner exercises its Redemption Right, the Redemption Amount shall be\npaid only in the form of \n\n\n - 12 -\n 19\n\n\nthe Cash Amount unless the Redeeming Partner, in its sole and absolute\ndiscretion, consents to payment of the Redemption Amount in the form of the\nShares Amount. A Redeeming Partner shall have no right, without the General\nPartner's consent, in its sole and absolute discretion, to receive the\nRedemption Amount in the form of the Shares Amount.\n\n \"Redemption Right\" has the meaning set forth in Section 8.6.A.\n\n \"Regulations\" means the Treasury Regulations promulgated under\nthe Code, as such regulations may be amended from time to time (including\ncorresponding provisions of succeeding regulations).\n\n \"REIT\" means a real estate investment trust under Section 856 of \nthe Code.\n\n \"REIT Requirements\" has the meaning set forth in Section 5.1.A.\n\n \"Residual Gain\" or \"Residual Loss\" means any item of gain or\nloss, as the case may be, of the Partnership recognized for federal income tax\npurposes resulting from a sale, exchange or other disposition of Contributed\nProperty or Adjusted Property, to the extent such item of gain or loss is not\nallocated pursuant to Section 2.B.1(a) or 2.B.2(a) of Exhibit C to eliminate\nBook-Tax Disparities.\n\n \"Safe Harbor\" has the meaning set forth in Section 11.6.F.\n\n \"Securities Act\" means the Securities Act of 1933, as amended.\n\n \"Series A Preferred Shares\" means the 8.98% Series A Cumulative\nRedeemable Preferred Shares of Equity Office Properties Trust issued in\nconnection with the merger of Beacon Properties Corporation into Equity Office\nProperties Trust on December 19, 1997.\n\n \"Series A Preferred Units\" means the series of Partnership Units\nrepresenting units of Limited Partnership Interest designated as the 8.98%\nSeries A Cumulative Redeemable Preferred Units with the designations,\npreferences and other rights set forth in Attachment A hereto.\n\n \"Series B Preferred Shares\" means the 5.25% Series B Convertible,\nCumulative Preferred Shares of the Company, with the preferences, conversion and\nother rights, voting powers , restrictions, limitations as to distributions,\nqualifications and terms and conditions of redemption of shares as described in\nthe Articles Supplementary to the Declaration of Trust filed with the State\nDepartment of Assessments and Taxation of Maryland on February 19, 1998,\nestablishing the series of preferred shares, designated Series B Preferred\nShares.\n\n \"Series B Preferred Units\" means the series of Partnership Units\nrepresenting units of Limited Partnership Interest designated as the 5.25% B\nConvertible, Cumulative Preferred Units, with the preferences, conversion and\nother rights, voting powers, restrictions, limitations as to distributions,\nqualification and terms and conditions of redemption of units set forth in\nAttachment B hereto.\n\n\n - 13 -\n 20\n\n \"Series C Preferred Shares\" means the 8 5\/8% Series C Cumulative\nRedeemable Preferred Shares of Beneficial Interest of the Company issued and\nsold in the underwritten public offering made pursuant to the Company's\neffective shelf registration statement on Form S-3 (Reg. No. 333-58729), its\nprospectus dated July 22, 1998, and its related prospectus supplement dated\nDecember 1, 1998.\n\n \"Series C Preferred Units\" means the series of Partnership Units\nrepresenting units of Limited Partnership Interest designated as the 8 5\/8%\nSeries C Cumulative Redeemable Preferred Units, with the designations,\npreferences and other rights set forth in Attachment C hereto.\n\n \"Series D Preferred Units\" means the series of Partnership Units\nrepresenting units of Limited Partnership Interest designated as the 7%\nCumulative Convertible Preferred Units, with the designations, preferences and\nother rights set forth in Attachment D hereto.\n\n \"704(c) Value\" of any Contributed Property means the fair market\nvalue of such property at the time of contribution as determined by the General\nPartner using such reasonable method of valuation as they may adopt; provided,\nhowever, subject to Exhibit B, the General Partner shall, in its sole and\nabsolute discretion, use such method as it deems reasonable and appropriate to\nallocate the aggregate of the 704(c) Value of Contributed Properties in a single\nor integrated transaction among each separate property on a basis proportional\nto its fair market values.\n\n \"Share\" means a share of beneficial interest (or other comparable\nequity interest) of the General Partner Entity. Shares may be issued in one or\nmore classes or series in accordance with the terms of the Declaration of Trust\n(or, if the General Partner is not the General Partner Entity, the\norganizational documents of the General Partner Entity). If there is more than\none class or series of Shares, the term \"Shares\" shall, as the context requires,\nbe deemed to refer to the class or series of Shares that correspond to the class\nor series of Partnership Interests for which the reference to Shares is made.\nWhen used with reference to Class A Units, the term \"Shares\" refers to common\nshares of beneficial interest (or other comparable equity interest) of the\nGeneral Partner Entity.\n\n \"Shares Amount\" means a number of Shares equal to the product of\nthe number of Partnership Units offered for redemption by a Redeeming Partner\ntimes the Conversion Factor; provided that, if the General Partner Entity issues\nto all holders of Shares rights, options, warrants or convertible or\nexchangeable securities entitling such holders to subscribe for or purchase\nShares or any other securities or property (collectively, the \"rights\"), then\nthe Shares Amount shall also include such rights that a holder of that number of\nShares would be entitled to receive.\n\n \"Share Option Plan\" means any equity incentive plan of the\nGeneral Partner, the General Partner Entity, the Partnership and\/or any\nAffiliate of the Partnership.\n\n \"Specified Redemption Date\" means the tenth Business Day after\nreceipt by the General Partner of a Notice of Redemption; provided that, if the\nShares are not \n\n\n - 14 -\n 21\n\n\nPublicly Traded, the Specified Redemption Date means the thirtieth Business Day\nafter receipt by the General Partner of a Notice of Redemption.\n\n \"Subsidiary\" means, with respect to any Person, any corporation,\nlimited liability company, trust, partnership or joint venture, or other entity\nof which a majority of (i) the voting power of the voting equity securities or\n(ii) the outstanding equity interests is owned, directly or indirectly, by such\nPerson.\n\n \"Substituted Limited Partner\" means a Person who is admitted as a\nLimited Partner to the Partnership pursuant to Section 11.4.\n\n \"Successor Entity\" has the meaning set forth in the definition of\n\"Conversion Factor\" herein.\n\n \"Terminating Capital Transaction\" means any sale or other\ndisposition of all or substantially all of the assets of the Partnership for\ncash or a related series of transactions that, taken together, result in the\nsale or other disposition of all or substantially all of the assets of the\nPartnership for cash.\n\n \"Termination Transaction\" has the meaning set forth in Section \n11.2.B.\n\n \"Unrealized Gain\" attributable to any item of Partnership\nproperty means, as of any date of determination, the excess, if any, of (i) the\nfair market value of such property (as determined under Exhibit B) as of such\ndate, over (ii) the Carrying Value of such property (prior to any adjustment to\nbe made pursuant to Exhibit B) as of such date.\n\n \"Unrealized Loss\" attributable to any item of Partnership\nproperty means, as of any date of determination, the excess, if any, of (i) the\nCarrying Value of such property (prior to any adjustment to be made pursuant to\nExhibit B) as of such date, over (ii) the fair market value of such property (as\ndetermined under Exhibit B) as of such date.\n\n \"Valuation Date\" means the date of receipt by the General Partner\nof a Notice of Redemption or, if such date is not a Business Day, the first\nBusiness Day thereafter.\n\n \"Value\" means, with respect to any outstanding Shares of the\nGeneral Partner Entity that are Publicly Traded, the average of the daily market\nprice for the ten consecutive trading days immediately preceding the date with\nrespect to which value must be determined. The market price for each such\ntrading day shall be the closing price, regular way, on such day, or if no such\nsale takes place on such day, the average of the closing bid and asked prices on\nsuch day. If the outstanding Shares of the General Partner Entity are Publicly\nTraded and the Shares Amount includes rights that a holder of Shares would be\nentitled to receive, then the Value of such rights shall be determined by the\nGeneral Partner acting in good faith on the basis of such quotations and other\ninformation as it considers, in its reasonable judgment, appropriate. If the\nShares of the General Partner Entity are not Publicly Traded, the Value of the\nShares Amount per Partnership Unit offered for redemption (which will be the\nCash Amount per Partnership Unit offered for redemption payable pursuant to\nSection 8.6.A) means the amount that a holder of one Partnership Unit would\nreceive if each of the assets of the Partnership were to be sold for \n\n\n - 15 -\n 22\n\n\nits fair market value on the Specified Redemption Date, the Partnership were to\npay all of its outstanding liabilities, and the remaining proceeds were to be\ndistributed to the Partners in accordance with the terms of this Agreement. Such\nValue shall be determined by the General Partner, acting in good faith and based\nupon a commercially reasonable estimate of the amount that would be realized by\nthe Partnership if each asset of the Partnership (and each asset of each\npartnership, limited liability company, trust, joint venture or other entity in\nwhich the Partnership owns a direct or indirect interest) were sold to an\nunrelated purchaser in an arms' length transaction where neither the purchaser\nnor the seller were under economic compulsion to enter into the transaction\n(without regard to any discount in value as a result of the Partnership's\nminority interest in any property or any illiquidity of the Partnership's\ninterest in any property). In connection with determining the Deemed Value of\nthe Partnership Interest for purposes of determining the number of additional\nPartnership Units issuable upon a Capital Contribution funded by an underwritten\npublic offering or an arm's length private placement of shares of beneficial\ninterest (or other comparable equity interest) of the General Partner, the Value\nof such shares shall be the public offering or arm's length private placement\nprice per share of such class of beneficial interest (or other comparable equity\ninterest) sold.\n\n ARTICLE II\n ORGANIZATIONAL MATTERS\n\nSECTION 2.1 ORGANIZATION\n\n The Partnership is a limited partnership organized pursuant to\nthe provisions of the Act and upon the terms and conditions set forth in the\nOriginal Agreement, as amended by the Prior Amendments, the Prior Addenda, and\nthe First Amended and Restated Agreement. The Partners hereby agree to continue\nthe business of the Partnership on the terms set forth in this Agreement. Except\nas expressly provided herein to the contrary, the rights and obligations of the\nPartners and the administration and termination of the Partnership shall be\ngoverned by the Act. The Partnership Interest of each Partner shall be personal\nproperty for all purposes.\n\nSECTION 2.2 NAME\n\n The name of the Partnership is EOP Operating Limited Partnership.\nThe Partnership's business may be conducted under any other name or names deemed\nadvisable by the General Partner, including the name of any of the General\nPartner or any Affiliate thereof. The words \"Limited Partnership,\" \"L.P.,\"\n\"Ltd.\" or similar words or letters shall be included in the Partnership's name\nwhere necessary for the purposes of complying with the laws of any jurisdiction\nthat so requires. The General Partner in its sole and absolute discretion may\nchange the name of the Partnership at any time and from time to time and shall\nnotify the Limited Partners of such change in the next regular communication to\nthe Limited Partners.\n\n\n\n - 16 -\n 23\n\n\nSECTION 2.3 REGISTERED OFFICE AND AGENT; PRINCIPAL OFFICE\n\n The address of the registered office of the Partnership in the\nState of Delaware shall be located at Corporation Trust Center, 1209 Orange\nStreet, Wilmington, County of New Castle, Delaware 19801, and the registered\nagent for service of process on the Partnership in the State of Delaware at such\nregistered office shall be Corporation Trust Company. The principal office of\nthe Partnership shall be Two North Riverside Plaza, Suite 2100, Chicago,\nIllinois 60606, or such other place as the General Partner may from time to time\ndesignate by notice to the Limited Partners. The Partnership may maintain\noffices at such other place or places within or outside the State of Delaware as\nthe General Partner deems advisable.\n\nSECTION 2.4 TERM\n\n The term of the Partnership commenced on November 1, 1996, and\nshall continue until December 31, 2095, unless it is dissolved sooner pursuant\nto the provisions of Article XIII or as otherwise provided by law.\n\n ARTICLE III\n PURPOSE\n\nSECTION 3.1 PURPOSE AND BUSINESS\n\n The purpose and nature of the business to be conducted by the\nPartnership is (i) to conduct any business that may be lawfully conducted by a\nlimited partnership organized pursuant to the Act; provided, however, that such\nbusiness shall be limited to and conducted in such a manner as to permit the\nGeneral Partner Entity at all times to be classified as a REIT, unless the\nGeneral Partner Entity ceases to qualify or is not qualified as a REIT for any\nreason or reasons not related to the business conducted by the Partnership, (ii)\nto enter into any corporation, partnership, joint venture, trust, limited\nliability company or other similar arrangement to engage in any of the foregoing\nor the ownership of interests in any entity engaged, directly or indirectly, in\nany of the foregoing and (iii) to do anything necessary or incidental to the\nforegoing. In connection with the foregoing, the Partners acknowledge that the\nstatus of the General Partner Entity as a REIT inures to the benefit of all the\nPartners and not solely to the General Partner Entity or its Affiliates.\n\nSECTION 3.2 POWERS\n\n The Partnership is empowered to do any and all acts and things\nnecessary, appropriate, proper, advisable, incidental to or convenient for the\nfurtherance and accomplishment of the purposes and business described herein and\nfor the protection and benefit of the Partnership, including, without\nlimitation, full power and authority, directly or through its ownership interest\nin other entities, to enter into, perform and carry out contracts of any kind,\nborrow money and issue evidences of indebtedness, whether or not secured by\nmortgage, deed of trust, pledge or other lien, acquire, own, manage, improve and\ndevelop real property, and lease, sell, transfer and dispose of real property;\nprovided, \n\n\n - 17 -\n 24\n\n\nhowever, that the Partnership shall not take, or refrain from taking, any action\nwhich, in the judgment of the General Partner, in its sole and absolute\ndiscretion, (i) could adversely affect the ability of the General Partner Entity\nto continue to qualify as a REIT, (ii) could subject the General Partner Entity\nto any taxes under Section 857 or Section 4981 of the Code or (iii) could\nviolate any law or regulation of any governmental body or agency having\njurisdiction over either the General Partner or the General Partner Entity or\nits securities, unless such action (or inaction) shall have been specifically\nconsented to by the General Partner in writing.\n\n ARTICLE IV\n CAPITAL CONTRIBUTIONS AND ISSUANCES\n OF PARTNERSHIP INTERESTS\n\nSECTION 4.1 CAPITAL CONTRIBUTIONS OF THE PARTNERS\n\n Prior to the execution of this Agreement, the Partners have made\nthe Capital Contributions as set forth in Exhibit A. The Partners own\nPartnership Units in the amounts set forth in Exhibit A and have Percentage\nInterests in the Partnership as set forth in Exhibit A, which number of\nPartnership Units and Percentage Interest shall be adjusted in Exhibit A from\ntime to time by the General Partner to the extent necessary to reflect\naccurately redemptions, Capital Contributions, the issuance of additional\nPartnership Units or similar events having an effect on a Partner's Percentage\nInterest occurring after the date hereof in accordance with the terms of this\nAgreement. To the extent the Partnership acquires any property by the merger of\nany other Person into the Partnership, Persons who receive Partnership Interests\nin exchange for their interests in the Person merging into the Partnership shall\nbecome Partners and shall be deemed to have made Capital Contributions as\nprovided in the applicable merger agreement and as set forth in Exhibit A. A\nnumber of Partnership Units held by the General Partner equal to one percent\n(1%) of the aggregate number of Partnership Units owned by the General Partner\nshall be deemed to be the General Partner Partnership Units and shall be the\nGeneral Partnership Interest of the General Partner. All other Partnership Units\nheld by the General Partner shall be deemed to be Limited Partnership Interests\nand shall be held by the General Partner in its capacity as a Limited Partner in\nthe Partnership. Except as provided in Sections 7.5, 10.5, and 13.3 hereof, the\nPartners shall have no obligation to make any additional Capital Contributions\nor provide any additional funding to the Partnership (whether in the form of\nloans, repayments of loans or otherwise). Except as otherwise set forth in\nSection 13.3 hereof, no Partner shall have any obligation to restore any deficit\nthat may exist in its Capital Account, either upon a liquidation of the\nPartnership or otherwise.\n\nSECTION 4.2 ISSUANCES OF PARTNERSHIP INTERESTS\n\n A. General. The General Partner is hereby authorized to cause the\nPartnership from time to time to issue to Partners (including the General\nPartner and its Affiliates) or other Persons (including, without limitation, in\nconnection with the contribution of property to the Partnership) Partnership\nUnits or other Partnership Interests in one or more classes, or in one or more\nseries of any of such classes, with such \n\n\n - 18 -\n 25\n\n\ndesignations, preferences and relative, participating, optional or other special\nrights, powers and duties, including rights, powers and duties senior to Limited\nPartnership Interests, all as shall be determined, subject to applicable\nDelaware law, by the General Partner in its sole and absolute discretion,\nincluding, without limitation, (i) the allocations of items of Partnership\nincome, gain, loss, deduction and credit to each such class or series of\nPartnership Interests, (ii) the right of each such class or series of\nPartnership Interests to share in Partnership distributions and (iii) the rights\nof each such class or series of Partnership Interests upon dissolution and\nliquidation of the Partnership; provided that no such Partnership Units or other\nPartnership Interests shall be issued to the General Partner unless either (a)\nthe Partnership Interests are issued in connection with the grant, award or\nissuance of Shares or other equity interests in the General Partner having\ndesignations, preferences and other rights such that the economic interests\nattributable to such Shares or other equity interests are substantially similar\nto the designations, preferences and other rights (except voting rights) of the\nPartnership Interests issued to the General Partner in accordance with this\nSection 4.2.A or (b) the additional Partnership Interests are issued to all\nPartners holding Partnership Interests in the same class in proportion to their\nrespective Percentage Interests in such class. If the Partnership issues\nPartnership Interests pursuant to this Section 4.2.A, the General Partner shall\nmake such revisions to this Agreement (including but not limited to the\nrevisions described in Section 5.4, Section 6.2 and Section 8.6) as it deems\nnecessary to reflect the issuance of such Partnership Interests.\n\n B. Percentage Interest Adjustments in the Case of Capital\nContributions for Partnership Units. Upon the acceptance of additional Capital\nContributions in exchange for Partnership Units and so long as the Partnership\nshall have outstanding more than one class of Partnership Interests, the\nPercentage Interest related thereto shall be equal to a fraction, the numerator\nof which is equal to the amount of cash, if any, plus the Agreed Value of\nContributed Property, if any, contributed with respect to such additional\nPartnership Units and the denominator of which is equal to the sum of (i) the\nDeemed Value of the Partnership Interests for all outstanding classes (computed\nas of the Business Day immediately preceding the date on which the additional\nCapital Contributions are made (an \"Adjustment Date\")) plus (ii) the aggregate\namount of additional Capital Contributions contributed to the Partnership on\nsuch Adjustment Date in respect of such additional Partnership Units. The\nPercentage Interest of each other Partner holding Partnership Interests not\nmaking a full pro rata Capital Contribution shall be adjusted to a fraction the\nnumerator of which is equal to the sum of (i) the Deemed Partnership Interest\nValue of such Limited Partner (computed as of the Business Day immediately\npreceding the Adjustment Date) plus (ii) the amount of additional Capital\nContributions (such amount being equal to the amount of cash, if any, plus the\nAgreed Value of Contributed Property, if any, so contributed), if any, made by\nsuch Partner to the Partnership in respect of such Partnership Interest as of\nsuch Adjustment Date and the denominator of which is equal to the sum of (i) the\nDeemed Value of the Partnership Interests of all outstanding classes (computed\nas of the Business Day immediately preceding such Adjustment Date) plus (ii) the\naggregate amount of the additional Capital Contributions contributed to the\nPartnership on such Adjustment Date in respect of such additional Partnership\nInterests. For purposes of calculating a Partner's Percentage Interest pursuant\nto this Section 4.2.B, cash Capital Contributions by the General Partner will be\ndeemed to equal the cash contributed by the General Partner plus (a) in the case\nof \n\n\n - 19 -\n 26\n\n\ncash contributions funded by an offering of any equity interests in or other\nsecurities of the General Partner, the offering costs attributable to the cash\ncontributed to the Partnership, and (b) in the case of Partnership Units issued\npursuant to Section 7.5.E, an amount equal to the difference between the Value\nof the Shares sold pursuant to any Share Option Plan and the net proceeds of\nsuch sale.\n\n C. Classes of Partnership Units. Subject to Section 4.2.A above\nand Section 4.2.D below, the Partnership shall have two classes of Partnership\nUnits entitled \"Class A Units\" and \"Class B Units.\" Either Class A Units or\nClass B Units, at the election of the General Partner, in its sole and absolute\ndiscretion, may be issued to newly admitted Partners in exchange for the\ncontribution by such Partners of cash, real estate partnership interests, stock,\nnotes or other assets or consideration; provided that any Partnership Unit that\nis not specifically designated by the General Partner as being of a particular\nclass shall be deemed to be a Class A Unit. Each Class B Unit shall be converted\nautomatically into a Class A Unit on the day immediately following the\nPartnership Record Date for the Distribution Period (as defined in Section\n5.1.C) in which such Class B Unit was issued, without the requirement for any\naction by either the Partnership or the Partner holding the Class B Unit.\n\n D. Preferred Units Outstanding. Pursuant to Section 4.2.A, the\nPartnership has heretofore established and issued Series A Preferred Units,\nSeries B Preferred Units, and Series C Preferred Units, and the Partnership is\nestablishing and issuing the Series D Preferred Units in connection with the\nadoption of this Agreement. The terms and conditions of the Series A Preferred\nUnits, the Series B Preferred Units, the Series C Preferred Units, and the\nSeries D Preferred Units are set forth in Attachment A, Attachment B, Attachment\nC, and Attachment D, respectively, attached hereto and made part hereof.\n\nSECTION 4.3 NO PREEMPTIVE RIGHTS\n\n Except to the extent expressly granted by the Partnership\npursuant to another agreement, no Person shall have any preemptive, preferential\nor other similar right with respect to (i) additional Capital Contributions or\nloans to the Partnership or (ii) issuance or sale of any Partnership Units or\nother Partnership Interests.\n\nSECTION 4.4 OTHER CONTRIBUTION PROVISIONS\n\n If any Partner is admitted to the Partnership and is given a\nCapital Account in exchange for services rendered to the Partnership, such\ntransaction shall be treated by the Partnership and the affected Partner as if\nthe Partnership had compensated such Partner in cash, and the Partner had\ncontributed such cash to the capital of the Partnership.\n\nSECTION 4.5 NO INTEREST ON CAPITAL\n\n No Partner shall be entitled to interest on its Capital\nContributions or its Capital Account.\n\n\n\n - 20 -\n 27\n\n\n\nSECTION 4.6 SEPARATE AGREEMENTS\n\n In connection with the issuance of Partnership Units to certain\nAdditional Limited Partners, the Partnership has entered into separate\nagreements that set forth additional rights and obligations of such Additional\nLimited Partners and additional terms and conditions of such Additional Limited\nPartner's Partnership Interests. Such agreements are described in Exhibits E-1\nthrough E-6 attached hereto and made part hereof.\n\n ARTICLE V\n DISTRIBUTIONS\n\nSECTION 5.1 REQUIREMENT AND CHARACTERIZATION OF DISTRIBUTIONS\n\n A. General. The General Partner shall distribute at least\nquarterly an amount equal to one hundred percent (100%) of Available Cash\ngenerated by the Partnership during such quarter or shorter period to the\nPartners who are Partners on the Partnership Record Date with respect to such\nquarter or shorter period as provided in Sections 5.1.B, 5.1.C and 5.1.D.\nNotwithstanding anything to the contrary contained herein, in no event may a\nPartner receive a distribution of Available Cash with respect to a Partnership\nUnit for a quarter or shorter period if such Partner is entitled to receive a\ndistribution with respect to a Share for which such Partnership Unit has been\nredeemed or exchanged. Unless otherwise expressly provided for herein, in\nAttachment A, Attachment B, Attachment C, and Attachment D hereto, with respect\nto Series A Preferred Units, Series B Preferred Units, Series C Preferred Units,\nand Series D Preferred Units, respectively, or in an agreement at the time a new\nclass or series of Partnership Interests is created in accordance with Article\nIV hereof, no Partnership Interest shall be entitled to a distribution in\npreference to any other Partnership Interest. The General Partner shall make\nsuch reasonable efforts, as determined by it in its sole and absolute discretion\nand consistent with the qualification of the General Partner Entity as a REIT,\nto distribute Available Cash (a) to Limited Partners so as to preclude any such\ndistribution or portion thereof from being treated as part of a sale of property\nto the Partnership by a Limited Partner under Section 707 of the Code or the\nRegulations thereunder; provided, that, the General Partner and the Partnership\nshall not have liability to a Limited Partner under any circumstances as a\nresult of any distribution to a Limited Partner being so treated, and (b) to the\nGeneral Partner in an amount sufficient to enable the General Partner Entity to\nmake distributions to its shareholders that will enable the General Partner\nEntity to (1) satisfy the requirements for qualification as a REIT under the\nCode and the Regulations (the \"REIT Requirements\"), and (2) avoid any federal\nincome or excise tax liability.\n\n B. Method. (i) Each holder of Partnership Interests that is\nentitled to any preference in distribution (including, without limitation, the\npreferences in distribution set forth in Attachment A, Attachment B, Attachment\nC, and Attachment D hereto with respect to Series A Preferred Units, Series B\nPreferred Units, Series C Preferred Units, and Series D Preferred Units,\nrespectively) shall be entitled to a distribution in accordance with the rights\nof any such class of Partnership Interests (and, \n\n\n - 21 -\n 28\n\n\nwithin such class, pro rata in proportion to the respective Percentage Interests\non such Partnership Record Date); and\n\n (ii) To the extent there is Available Cash remaining after the\npayment of any preference in distribution in accordance with the foregoing\nclause (i), with respect to Partnership Interests that are not entitled to any\npreference in distribution, pro rata to each such class in accordance with the\nterms of such class (and, within each such class, pro rata in proportion to the\nrespective Percentage Interests on such Partnership Record Date).\n\n C. Distributions When Class B Units Are Outstanding. If for any\nquarter or shorter period with respect to which a distribution is to be made (a\n\"Distribution Period\") Class B Units are outstanding on the Partnership Record\nDate for such Distribution Period, the General Partner shall allocate the\nAvailable Cash with respect to such Distribution Period available for\ndistribution with respect to the Class A Units and Class B Units collectively\nbetween the Partners who are holders of Class A Units (\"Class A\") and the\nPartners who are holders of Class B Units (\"Class B\") as follows:\n\n (1) Class A shall receive that portion of the\n Available Cash (the \"Class A Share\") determined by multiplying\n the amount of Available Cash by the following fraction:\n\n A x Y\n\n ----------------------\n (A x Y)+(B x X)\n\n (2) Class B shall receive that portion of the\n Available Cash (the \"Class B Share\") determined by multiplying\n the amount of Available Cash by the following fraction:\n\n B x X\n\n ----------------------\n (A x Y)+(B x X)\n\n (3) For purposes of the foregoing formulas,\n (i) \"A\" equals the number of Class A Units outstanding on the\n Partnership Record Date for such Distribution Period; (ii) \"B\"\n equals the number of Class B Units outstanding on the\n Partnership Record Date for such \n\n\n - 22 -\n 29\n\n\n Distribution Period; (iii) \"Y\" equals the number of days in\n the Distribution Period; and (iv) \"X\" equals the number of\n days in the Distribution Period for which the Class B Units\n were issued and outstanding.\n\n The Class A Share shall be distributed among Partners holding\nClass A Units on the Partnership Record Date for the Distribution Period in\naccordance with the number of Class A Units held by each Partner on such\nPartnership Record Date; provided that in no event may a Partner receive a\ndistribution of Available Cash with respect to a Class A Unit if a Partner is\nentitled to receive a distribution out of such Available Cash with respect to a\nShare for which such Class A Unit has been redeemed or exchanged. The Class B\nShares shall be distributed among the Partners holding Class B Units on the\nPartnership Record Date for the Distribution Period in accordance with the\nnumber of Class B Units held by each Partner on such Partnership Record Date. In\nno event shall any Class B Units be entitled to receive any distribution of\nAvailable Cash for any Distribution Period ending prior to the date on which\nsuch Class B Units are issued.\n\n D. Distributions When Class B Units Have Been Issued on Different\nDates. If Class B Units which have been issued on different dates are\noutstanding on the Partnership Record Date for any Distribution Period, then the\nClass B Units issued on each particular date shall be treated as a separate\nseries of Partnership Units for purposes of making the allocation of Available\nCash for such Distribution Period among the holders of Partnership Units (and\nthe formula for making such allocation, and the definitions of variables used\ntherein, shall be modified accordingly). Thus, for example, if two series of\nClass B Units are outstanding on the Partnership Record Date for any\nDistribution Period, the allocation formula for each series, \"Series B(1)\" and\n\"Series B(2)\" would be as follows:\n\n (1) Series B(1) shall receive that portion of\n the Available Cash determined by multiplying the amount of\n Available Cash by the following fraction:\n\n B(1) x X(1)\n\n ------------------------------\n (A x Y)+(B(1) x X(1))+(B(2) x X(2))\n\n (2) Series B(2) shall receive that portion of\n the Available Cash determined by multiplying the amount of\n Available Cash by the following fraction:\n\n\n\n - 23 -\n 30\n\n\n\n B(2) x X(2)\n\n ------------------------------\n (A x Y)+(B(1) x X(1))+(B(2) x X(2))\n\n (3) For purposes of the foregoing formulas the\n definitions set forth in Section 5.1.C.3 remain the same\n except that (i) \"B(1)\" equals the number of Partnership Units\n in Series B(1) outstanding on the Partnership Record Date for\n such Distribution Period; (ii) \"B(2)\" equals the number of\n Partnership Units in Series B(2) outstanding on the\n Partnership Record Date for such Distribution Period; (iii)\n \"X(1)\" equals the number of days in the Distribution Period\n for which the Partnership Units in Series B(1) were issued and\n outstanding; and (iv) \"X(2)\" equals the number of days in the\n Distribution Period for which the Partnership Units in Series\n B(2) were issued and outstanding.\n\n E. Minimum Distributions if Shares Not Publicly Traded. In\naddition (and without regard to the amount of Available Cash), if the Shares of\nthe General Partner Entity are not Publicly Traded, the General Partner shall\nmake cash distributions with respect to the Class A Units at least annually for\neach taxable year of the Partnership beginning prior to the fifteenth (15th)\nanniversary of the Effective Date in an aggregate amount with respect to each\nsuch taxable year at least equal to 95% of the Partnership's taxable income for\nsuch year allocable to the Class A Units, with such distributions to be made not\nlater than 60 days after the end of such year.\n\nSECTION 5.2 AMOUNTS WITHHELD\n\n All amounts withheld pursuant to the Code or any provisions of\nany state or local tax law and Section 10.5 with respect to any allocation,\npayment or distribution to the General Partner, the Limited Partners or\nAssignees shall be treated as amounts distributed to the General Partner,\nLimited Partners or Assignees pursuant to Section 5.1 for all purposes under\nthis Agreement.\n\nSECTION 5.3 DISTRIBUTIONS UPON LIQUIDATION\n\n Proceeds from a Terminating Capital Transaction shall be\ndistributed to the Partners in accordance with Section 13.2.\n\n\n\n - 24 -\n 31\n\n\nSECTION 5.4 REVISIONS TO REFLECT ISSUANCE OF PARTNERSHIP INTERESTS\n\n If the Partnership issues Partnership Interests to the General\nPartner or any Additional Limited Partner pursuant to Article IV hereof, the\nGeneral Partner shall make such revisions to this Article V and Exhibit A as it\ndeems necessary to reflect the issuance of such additional Partnership Interests\nwithout the requirements for any other consents or approvals.\n\n ARTICLE VI\n ALLOCATIONS\n\nSECTION 6.1 ALLOCATIONS FOR CAPITAL ACCOUNT PURPOSES\n\n For purposes of maintaining the Capital Accounts and in\ndetermining the rights of the Partners among themselves, the Partnership's items\nof income, gain, loss and deduction (computed in accordance with Exhibit B)\nshall be allocated among the Partners in each taxable year (or portion thereof)\nas provided herein below.\n\n A. Net Income. After giving effect to the special \nallocations set forth in Section 1 of Exhibit C of the Partnership Agreement, \nNet Income shall be allocated:\n\n (1) first, to the General Partner to the extent that\n cumulative Net Losses previously allocated the General\n Partner pursuant to Section 6.1.B(6) exceed cumulative Net\n Income previously allocated to the General Partner\n pursuant to this clause (1);\n\n (2) second, to each Protected Partner until the cumulative\n Net Income allocated such Protected Partner under this\n clause (2) equals the cumulative Net Losses allocated such\n Protected Partner under Section 6.1.B(5) (and, within the\n class of Protected Partners, pro rata in proportion to\n their respective percentages of the cumulative Net Losses\n allocated all Protected Partners pursuant to Section\n 6.1.B(5) hereof);\n\n (3) third, to the General Partner until the cumulative Net\n Income allocated under this clause (3) equals the\n cumulative Net Losses allocated the General Partner under\n Section 6.1.B(4);\n\n (4) fourth, to the holders of any Partnership Interests\n that are entitled to any preference upon liquidation until\n the cumulative Net Income allocated under this clause (4)\n equals the cumulative Net Losses allocated to such\n Partners under Section 6.1.B(3);\n\n (5) fifth, to the holders of any Partnership Interests\n that are entitled to any preference in distribution in\n accordance with the rights of any such class of\n Partnership Interests until each such Partnership Interest\n has been allocated, on a cumulative basis pursuant to this\n clause (5), Net Income equal to the amount of\n\n\n - 25 -\n 32\n\n\n distributions received which are attributable to the\n preference of such class of Partnership Interests (and,\n within such class, pro rata in proportion to the\n respective Percentage Interests as of the last day of the\n period for which such allocation is being made); and\n\n (6) finally, with respect to Partnership Interests that\n are not entitled to any preference in the allocation of\n Net Income, pro rata to each such class in accordance with\n the terms of such class (and, within such class, pro rata\n in proportion to the respective Percentage Interests as of\n the last day of the period for which such allocation is\n being made).\n\n B. Net Losses. After giving effect to the special allocations set\nforth in Section 1 of Exhibit C, Net Losses shall be allocated:\n\n (1) first, to the holders of Partnership Interests, in\n proportion to their share of the Net Income previously\n allocated pursuant to Section 6.1.A(6), to the extent that\n any prior allocations of Net Income to such Partners\n pursuant to Section 6.1.A(6) exceed, on a cumulative\n basis, distributions with respect to such Partnership\n Interests pursuant to clause (ii) of Section 5.1.B;\n\n (2) second, with respect to classes of Partnership\n Interests that are not entitled to any preference in\n distribution upon distribution, pro rata to each such\n class in accordance with the terms of such class (and,\n within such class, pro rata in proportion to the\n respective Percentage Interests as of the last day of the\n period for which such allocation is being made); provided\n that Net Losses shall not be allocated to any Partner\n pursuant to this Section 6.1.B(2) to the extent that such\n allocation would cause such Partner to have an Adjusted\n Capital Account Deficit (or increase any existing Adjusted\n Capital Account Deficit) (determined in each case (i) by\n not including in the Partners' Adjusted Capital Accounts\n any amount that a Partner is obligated to contribute to\n the Partnership with respect to any deficit in its Capital\n Account pursuant to Section 13.3 and (ii) in the case of a\n Partner who also holds classes of Partnership Interests\n that are entitled to any preferences in distribution upon\n liquidation, by subtracting from such Partners' Adjusted\n Capital Account the amount of such preferred distribution\n to be made upon liquidation) at the end of such taxable\n year (or portion thereof);\n\n (3) third, with respect to classes of Partnership\n Interests that are entitled to any preference in\n distribution upon liquidation, in reverse order of the\n priorities of each such class (and within each such class,\n pro rata in proportion to their respective Percentage\n Interests as of the last day of the period for which such\n allocation is being made; provided that Net Losses shall\n not be allocated to any Partner pursuant to this Section\n 6.1.B(3) to the extent that such allocation\n\n\n - 26 -\n 33\n\n\n would cause such Partner to have an Adjusted Capital\n Account Deficit (or increase any existing Adjusted Capital\n Account Deficit) (determined in each case by not including\n in the Partners' Adjusted Capital Accounts any amount that\n a Partner is obligated to contribute to the Partnership\n with respect to any deficit in its Capital Account\n pursuant to Section 13.3) at the end of such taxable year\n (or portion thereof);\n\n (4) fourth, to the General Partner in an amount equal to\n the excess of (a) the amount of the Partnership Recourse\n Liabilities over (b) the Aggregate Protected Amount;\n\n (5) fifth, to and among the Protected Partners, in\n proportion to their respective Protected Amounts, until\n such time as the Protected Partners as a group have been\n allocated cumulative Net Losses pursuant to this clause\n (5) equal to the Aggregate Protected Amount; and\n\n (6) thereafter, to the General Partner.\n\n C. Allocation of Nonrecourse Debt. For purposes of Regulation\nSection 1.752-3(a), the Partners agree that Nonrecourse Liabilities of the\nPartnership in excess of the sum of (i) the amount of Partnership Minimum Gain\nand (ii) the total amount of Nonrecourse Built-in Gain shall be allocated by the\nGeneral Partner by taking into account facts and circumstances relating to each\nPartner's respective interest in the profits of the Partnership. For this\npurpose, the General Partner will have discretion in any fiscal year to allocate\nsuch excess Nonrecourse Liabilities among the Partners in any manner permitted\nunder Code Section 752 and the Regulations thereunder.\n\n D. Recapture Income. Any gain allocated to the Partners upon the\nsale or other taxable disposition of any Partnership asset shall, to the extent\npossible after taking into account other required allocations of gain pursuant\nto Exhibit C, be characterized as Recapture Income in the same proportions and\nto the same extent as such Partners have been allocated any deductions directly\nor indirectly giving rise to the treatment of such gains as Recapture Income.\n\nSECTION 6.2 REVISIONS TO ALLOCATIONS TO REFLECT ISSUANCE OF PARTNERSHIP \n INTERESTS\n\n If the Partnership issues Partnership Interests to the General\nPartner or any Additional Limited Partner pursuant to Article IV hereof, the\nGeneral Partner shall make such revisions to this Article VI and Exhibit A as it\ndeems necessary to reflect the terms of the issuance of such Partnership\nInterests, including making preferential allocations to classes of Partnership\nInterests that are entitled thereto. Such revisions shall not require the\nconsent or approval of any other Partner.\n\n\n - 27 -\n 34\n\n\n ARTICLE VII\n MANAGEMENT AND OPERATIONS OF BUSINESS\n\nSECTION 7.1 MANAGEMENT\n\n A. Powers of General Partner. Except as otherwise expressly\nprovided in this Agreement, all management powers over the business and affairs\nof the Partnership are and shall be exclusively vested in the General Partner,\nand no Limited Partner shall have any right to participate in or exercise\ncontrol or management power over the business and affairs of the Partnership.\nThe General Partner may not be removed by the Limited Partners with or without\ncause. In addition to the powers now or hereafter granted a general partner of a\nlimited partnership under applicable law or which are granted to the General\nPartner under any other provision of this Agreement, the General Partner,\nsubject to Section 7.11, shall have full power and authority to do all things\ndeemed necessary or desirable by it to conduct the business of the Partnership,\nto exercise all powers set forth in Section 3.2 and to effectuate the purposes\nset forth in Section 3.1, including, without limitation:\n\n (1) the making of any expenditures, the lending or\n borrowing of money (including, without limitation,\n making prepayments on loans and borrowing money to\n permit the Partnership to make distributions to its\n Partners in such amounts as are required under\n Section 5.1.E or will permit the General Partner\n Entity (so long as the General Partner Entity\n qualifies as REIT) to avoid the payment of any\n federal income tax (including, for this purpose,\n any excise tax pursuant to Section 4981 of the\n Code) and to make distributions to its shareholders\n sufficient to permit the General Partner Entity to\n maintain REIT status), the assumption or guarantee\n of, or other contracting for, indebtedness and\n other liabilities, the issuance of evidences of\n indebtedness (including the securing of same by\n mortgage, deed of trust or other lien or\n encumbrance on the Partnership's assets) and the\n incurring of any obligations the General Partner\n deems necessary for the conduct of the activities\n of the Partnership;\n\n (2) the making of tax, regulatory and other filings, or\n rendering of periodic or other reports to\n governmental or other agencies having jurisdiction\n over the business or assets of the Partnership;\n\n (3) the acquisition, disposition, mortgage, pledge,\n encumbrance, hypothecation or exchange of any or\n all of the assets of the Partnership (including the\n exercise or grant of any conversion, option,\n privilege or subscription right or other right\n available in connection with any assets at any time\n held by the Partnership) or the merger or other\n combination of the \n\n\n - 28 -\n 35\n\n\n Partnership with or into another entity on such\n terms as the General Partner deems proper;\n\n (4) the use of the assets of the Partnership\n (including, without limitation, cash on hand) for\n any purpose consistent with the terms of this\n Agreement and on any terms it sees fit, including,\n without limitation, the financing of the conduct of\n the operations of the General Partner, the\n Partnership or any of the Partnership's\n Subsidiaries, the lending of funds to other Persons\n (including, without limitation, the General\n Partner, its Subsidiaries and the Partnership's\n Subsidiaries) and the repayment of obligations of\n the Partnership and its Subsidiaries and any other\n Person in which the Partnership has an equity\n investment and the making of capital contributions\n to its Subsidiaries;\n\n (5) the management, operation, leasing, landscaping,\n repair, alteration, demolition or improvement of\n any real property or improvements owned by the\n Partnership or any Subsidiary of the Partnership or\n any Person in which the Partnership has made a\n direct or indirect equity investment;\n\n (6) the negotiation, execution, and performance of any\n contracts, conveyances or other instruments that\n the General Partner considers useful or necessary\n to the conduct of the Partnership's operations or\n the implementation of the General Partner's powers\n under this Agreement, including contracting with\n contractors, developers, consultants, accountants,\n legal counsel, other professional advisors and\n other agents and the payment of their expenses and\n compensation out of the Partnership's assets;\n\n (7) the mortgage, pledge, encumbrance or hypothecation\n of any assets of the Partnership, and the use of\n the assets of the Partnership (including, without\n limitation, cash on hand) for any purpose\n consistent with the terms of this Agreement and on\n any terms it sees fit, including, without\n limitation, the financing of the conduct or the\n operations of the General Partner or the\n Partnership, the lending of funds to other Persons\n (including, without limitation, any Subsidiaries of\n the Partnership) and the repayment of obligations\n of the Partnership, any of its Subsidiaries and any\n other Person in which it has an equity investment;\n\n (8) the distribution of Partnership cash or other\n Partnership assets in accordance with this\n Agreement;\n\n\n\n - 29 -\n 36\n\n\n\n (9) the holding, managing, investing and reinvesting of\n cash and other assets of the Partnership;\n\n (10) the collection and receipt of revenues and income\n of the Partnership;\n\n (11) the selection, designation of powers, authority and\n duties and the dismissal of employees of the\n Partnership (including, without limitation,\n employees having titles such as \"president,\" \"vice\n president,\" \"secretary\" and \"treasurer\") and\n agents, outside attorneys, accountants, consultants\n and contractors of the Partnership and the\n determination of their compensation and other terms\n of employment or hiring;\n\n (12) the maintenance of such insurance for the benefit\n of the Partnership and the Partners as it deems\n necessary or appropriate;\n\n (13) the formation of, or acquisition of an interest\n (including non-voting interests in entities\n controlled by Affiliates of the Partnership or\n third parties) in, and the contribution of property\n to, any further limited or general partnerships,\n joint ventures, limited liability companies or\n other relationships that it deems desirable\n (including, without limitation, the acquisition of\n interests in, and the contributions of funds or\n property to, or making of loans to, its\n Subsidiaries and any other Person in which it has\n an equity investment from time to time, or the\n incurrence of indebtedness on behalf of such\n Persons or the guarantee of the obligations of such\n Persons); provided that, as long as the General\n Partner has determined to continue to qualify as a\n REIT, the Partnership may not engage in any such\n formation, acquisition or contribution that would\n cause the General Partner to fail to qualify as a\n REIT;\n\n (14) the control of any matters affecting the rights and\n obligations of the Partnership, including the\n settlement, compromise, submission to arbitration\n or any other form of dispute resolution or\n abandonment of any claim, cause of action,\n liability, debt or damages due or owing to or from\n the Partnership, the commencement or defense of\n suits, legal proceedings, administrative\n proceedings, arbitrations or other forms of dispute\n resolution, the representation of the Partnership\n in all suits or legal proceedings, administrative\n proceedings, arbitrations or other forms of dispute\n resolution, the incurring of legal expense and the\n indemnification of any Person against liabilities\n and contingencies to the extent permitted by law;\n\n\n\n - 30 -\n 37\n\n\n\n (15) the determination of the fair market value of any\n Partnership property distributed in kind, using\n such reasonable method of valuation as the General\n Partner may adopt;\n\n (16) the exercise, directly or indirectly, through any\n attorney-in-fact acting under a general or limited\n power of attorney, of any right, including the\n right to vote, appurtenant to any assets or\n investment held by the Partnership;\n\n (17) the exercise of any of the powers of the General\n Partner enumerated in this Agreement on behalf of\n or in connection with any Subsidiary of the\n Partnership or any other Person in which the\n Partnership has a direct or indirect interest,\n individually or jointly with any such Subsidiary or\n other Person;\n\n (18) the exercise of any of the powers of the General\n Partner enumerated in this Agreement on behalf of\n any Person in which the Partnership does not have\n any interest pursuant to contractual or other\n arrangements with such Person;\n\n (19) the making, executing and delivering of any and all\n deeds, leases, notes, deeds to secure debt,\n mortgages, deeds of trust, security agreements,\n conveyances, contracts, guarantees, warranties,\n indemnities, waivers, releases or other legal\n instruments or agreements in writing necessary or\n appropriate in the judgment of the General Partner\n for the accomplishment of any of the powers of the\n General Partner enumerated in this Agreement; and\n\n (20) the distribution of cash to acquire Partnership\n Units held by a Limited Partner in connection with\n a Limited Partner's exercise of its Redemption\n Right under Section 8.6; and\n\n (21) the amendment and restatement of Exhibit A to\n reflect accurately at all times the Capital\n Contributions and Percentage Interests of the\n Partners as the same are adjusted from time to time\n to the extent necessary to reflect redemptions,\n Capital Contributions, the issuance of Partnership\n Units, the admission of any Additional Limited\n Partner or any Substituted Limited Partner or\n otherwise, which amendment and restatement,\n notwithstanding anything in this Agreement to the\n contrary, shall not be deemed an amendment of this\n Agreement, as long as the matter or event being\n reflected in Exhibit A otherwise is authorized by\n this Agreement.\n\n\n - 31 -\n 38\n\n\n B. No Approval by Limited Partners. Except as provided in Section\n7.11, each of the Limited Partners agrees that the General Partner is authorized\nto execute, deliver and perform the above-mentioned agreements and transactions\non behalf of the Partnership without any further act, approval or vote of the\nPartners, notwithstanding any other provision of this Agreement, the Act or any\napplicable law, rule or regulation, to the full extent permitted under the Act\nor other applicable law. The execution, delivery or performance by the General\nPartner or the Partnership of any agreement authorized or permitted under this\nAgreement shall not constitute a breach by the General Partner of any duty that\nthe General Partner may owe the Partnership or the Limited Partners or any other\nPersons under this Agreement or of any duty stated or implied by law or equity.\n\n C. Insurance. At all times from and after the date hereof, the\nGeneral Partner may cause the Partnership to obtain and maintain (i) casualty,\nliability and other insurance on the properties of the Partnership and (ii)\nliability insurance for the Indemnitees hereunder and (iii) such other insurance\nas the General Partner, in its sole and absolute discretion, determines to be\nnecessary.\n\n D. Working Capital and Other Reserves. At all times from and\nafter the date hereof, the General Partner may cause the Partnership to\nestablish and maintain working capital reserves in such amounts as the General\nPartner, in its sole and absolute discretion, deems appropriate and reasonable\nfrom time to time, including upon liquidation of the Partnership under Section\n13.\n\n E. No Obligations to Consider Tax Consequences of Limited\nPartners. In exercising their authority under this Agreement, the General\nPartner may, but shall be under no obligation to, take into account the tax\nconsequences to any Partner (including the General Partner) of any action taken\n(or not taken) by any of them. The General Partner and the Partnership shall not\nhave liability to a Limited Partner for monetary damages or otherwise for losses\nsustained, liabilities incurred or benefits not derived by such Limited Partner\nin connection with such decisions, provided that the General Partner has acted\nin good faith and pursuant to its authority under this Agreement.\n\nSECTION 7.2 CERTIFICATE OF LIMITED PARTNERSHIP\n\n The General Partner has previously filed the Certificate with the\nSecretary of State of Delaware. To the extent that such action is determined by\nthe General Partner to be reasonable and necessary or appropriate, the General\nPartner shall file amendments to and restatements of the Certificate and do all\nthe things to maintain the Partnership as a limited partnership (or a\npartnership in which the limited partners have limited liability) under the laws\nof the State of Delaware and each other state, the District of Columbia or other\njurisdiction in which the Partnership may elect to do business or own property.\nSubject to the terms of Section 8.5.A(4), the General Partner shall not be\nrequired, before or after filing, to deliver or mail a copy of the Certificate\nor any amendment thereto to any Limited Partner. The General Partner shall use\nall reasonable efforts to cause to be filed such other certificates or documents\nas may be reasonable and necessary or appropriate for the formation,\ncontinuation, qualification and operation of a limited partnership (or a\npartnership in which the limited partners have limited liability) in the State\nof Delaware \n\n\n - 32 -\n 39\n\n\nand any other state, the District of Columbia or other jurisdiction in which the\nPartnership may elect to do business or own property.\n\nSECTION 7.3 TITLE TO PARTNERSHIP ASSETS\n\n Title to Partnership assets, whether real, personal or mixed and\nwhether tangible or intangible, shall be deemed to be owned by the Partnership\nas an entity, and no Partners, individually or collectively, shall have any\nownership interest in such Partnership assets or any portion thereof. Title to\nany or all of the Partnership assets may be held in the name of the Partnership,\nthe General Partner or one or more nominees, as the General Partner may\ndetermine, including Affiliates of the General Partner. The General Partner\nhereby declares and warrants that any Partnership assets for which legal title\nis held in the name of the General Partner or any nominee or Affiliate of the\nGeneral Partner shall be held by the General Partner for the use and benefit of\nthe Partnership in accordance with the provisions of this Agreement. All\nPartnership assets shall be recorded as the property of the Partnership in its\nbooks and records, irrespective of the name in which legal title to such\nPartnership assets is held.\n\nSECTION 7.4 REIMBURSEMENT OF THE GENERAL PARTNER\n\n A. No Compensation. Except as provided in this Section 7.4 and\nelsewhere in this Agreement (including the provisions of Articles V and VI\nregarding distributions, payments and allocations to which it may be entitled),\nthe General Partner shall not be compensated for its services as the general\npartner of the Partnership.\n\n B. Responsibility for Partnership Expenses. The Partnership shall\nbe responsible for and shall pay all expenses relating to the Partnership's\norganization, the ownership of its assets and its operations. The General\nPartner shall be reimbursed on a monthly basis, or such other basis as the\nGeneral Partner may determine in its sole and absolute discretion, for all\nexpenses it incurs relating to the ownership and operation of, or for the\nbenefit of, the Partnership (including, without limitation, expenses related to\nthe operations of the General Partner and to the management and administration\nof any Subsidiaries of the General Partner or the Partnership or Affiliates of\nthe Partnership, such as auditing expenses and filing fees); provided that the\namount of any such reimbursement shall be reduced by (i) any interest earned by\nthe General Partner with respect to bank accounts or other instruments or\naccounts held by it on behalf of the Partnership as permitted in Section 7.5.A\n(which interest is considered to belong to the Partnership and shall be paid\nover to the Partnership to the extent not applied to reimburse the General\nPartner for expenses hereunder); and (ii) any amount derived by the General\nPartner from any investments permitted in Section 7.5.A. The General Partner\nshall determine in good faith the amount of expenses incurred by it related to\nthe ownership and operation of, or for the benefit of, the Partnership. If\ncertain expenses are incurred for the benefit of the Partnership and other\nentities (including the General Partner), such expenses will be allocated to the\nPartnership and such other entities in such a manner as the General Partner in\nits sole and absolute discretion deems fair and reasonable. Such reimbursements\nshall be in addition to any reimbursement to the General Partner pursuant to\nSection 10.3.C and as a result of indemnification pursuant to \n\n\n - 33 -\n 40\n\n\nSection 7.7. All payments and reimbursements hereunder shall be characterized\nfor federal income tax purposes as expenses of the Partnership incurred on its\nbehalf, and not as expenses of the General Partner.\n\n C. Partnership Interest Issuance Expenses. The General Partner\nshall also be reimbursed for all expenses it incurs relating to any issuance of\nPartnership Interests, Shares, Debt of the Partnership or the General Partner or\nrights, options, warrants or convertible or exchangeable securities pursuant to\nArticle IV (including, without limitation, all costs, expenses, damages and\nother payments resulting from or arising in connection with litigation related\nto any of the foregoing), all of which expenses are considered by the Partners\nto constitute expenses of, and for the benefit of, the Partnership.\n\n D. Purchases of Shares by the General Partner. If the General\nPartner exercises its rights under the Declaration of Trust to purchase Shares\nor otherwise elects to purchase from its shareholders Shares in connection with\na share repurchase or similar program or for the purpose of delivering such\nShares to satisfy an obligation under any dividend reinvestment or equity\npurchase program adopted by the General Partner, any employee equity purchase\nplan adopted by the General Partner or any similar obligation or arrangement\nundertaken by the General Partner in the future, the purchase price paid by the\nGeneral Partner for those Shares and any other expenses incurred by the General\nPartner in connection with such purchase shall be considered expenses of the\nPartnership and shall be reimbursable to the General Partner, subject to the\nconditions that: (i) if those Shares subsequently are to be sold by the General\nPartner, the General Partner shall pay to the Partnership any proceeds received\nby the General Partner for those Shares (provided that a transfer of Shares for\nPartnership Units pursuant to Section 8.6 would not be considered a sale for\nsuch purposes); and (ii) if such Shares are not retransferred by the General\nPartner within thirty (30) days after the purchase thereof, the General Partner\nshall cause the Partnership to cancel a number of Partnership Units (rounded to\nthe nearest whole Partnership Unit) held by the General Partner equal to the\nproduct attained by multiplying the number of those Shares by a fraction, the\nnumerator of which is one and the denominator of which is the Conversion Factor.\n\n E. Reimbursement not a Distribution. If and to the extent any\nreimbursement made pursuant to this Section 7.4 is determined for federal income\ntax purposes not to constitute a payment of expenses of the Partnership, the\namount so determined shall constitute a guaranteed payment with respect to\ncapital within the meaning of Section 707(c) of the Code, shall be treated\nconsistently therewith by the Partnership and all Partners and shall not be\ntreated as a distribution for purposes of computing the Partners' Capital\nAccounts.\n\n F. Funding for Certain Capital Transactions. In the event that\nthe General Partner shall undertake to acquire (whether by merger,\nconsolidation, purchase, or otherwise) the assets or equity interests of another\nPerson and such acquisition shall require the payment of cash by the General\nPartner (whether to such Person or to any other selling party or parties in such\ntransaction or to one or more creditors, if any, of such Person or such selling\nparty or parties), (i) the Partnership shall advance to the General Partner the\ncash required to consummate such acquisition if, and to the extent that, such\n\n\n - 34 -\n 41\n\n\ncash is not to be obtained by the General Partner through an issuance of Shares\ndescribed in Section 4.2 or pursuant to a transaction described in Section\n7.5.B, (ii) the General Partner shall immediately, upon consummation of such\nacquisition, transfer to the Partnership (or cause to be transferred to the\nPartnership), in full and complete satisfaction of such advance and as required\nby Section 7.5, the assets or equity interests of such Person acquired by the\nGeneral Partner in such acquisition, and (iii) pursuant to and in accordance\nwith Section 4.2 and Section 7.5.B, the Partnership shall issue to the General\nPartner Partnership Interests and\/or rights, options, warrants or convertible or\nexchangeable securities of the Partnership having designations, preferences and\nother rights that are substantially the same as those of any additional Shares,\nother equity securities, New Securities and\/or Convertible Funding Debt, as the\ncase may be, issued by the General Partner in connection with such acquisition\n(whether issued directly to participants in the acquisition transaction or to\nthird parties in order to obtain cash to complete the acquisition). In addition\nto, and without limiting the foregoing, in the event that the General Partner\nengages in a transaction in which (x) the General Partner (or a wholly owned\ndirect or indirect Subsidiary of the General Partner) merges with another entity\n(referred to as the \"Parent Entity\") that is organized in the \"UPREIT format\"\n(i.e., where the Parent Entity holds substantially all of its assets and\nconducts substantially all of its operations through a partnership, limited\nliability company or other entity (referred to as an \"Operating Entity\")) and\nthe General Partner survives such merger, (y) such Operating Entity merges with\nor is otherwise acquired by the Partnership in exchange in whole or in part for\nPartnership Interests, and (z) the General Partner is required or elects to pay\npart of the consideration in connection with such merger involving the Parent\nEntity in the form of cash and part of the consideration in the form of Shares,\nthe Partnership shall distribute to the General Partner with respect to its\nexisting Partnership Interest an amount of cash sufficient to complete such\ntransaction and the General Partner shall cause the Partnership to cancel a\nnumber of Partnership Units (rounded to the nearest whole number) held by the\nGeneral Partner equal to the product attained by multiplying the number of\nadditional Shares of the General Partner that the General Partner would have\nissued to the Parent Entity or the owners of the Parent Entity in such\ntransaction if the entire consideration therefor were to have been paid in\nShares by a fraction, the numerator of which is one and the denominator of which\nis the Conversion Factor.\n\nSECTION 7.5 OUTSIDE ACTIVITIES OF THE GENERAL PARTNER; RELATIONSHIP OF \n SHARES TO PARTNERSHIP UNITS; FUNDING DEBT\n\n A. General. Without the Consent of the Outside Limited Partners,\nthe General Partner shall not, directly or indirectly, enter into or conduct any\nbusiness other than in connection with the ownership, acquisition and\ndisposition of Partnership Interests as General Partner or Limited Partner and\nthe management of the business of the Partnership and such activities as are\nincidental thereto. Without the Consent of the Outside Limited Partners, the\nassets of the General Partner shall be limited to Partnership Interests and\npermitted debt obligations of the Partnership (as contemplated by Section\n7.5.F), so that Shares and Partnership Units are completely fungible except as\notherwise specifically provided herein; provided that the General Partner shall\nbe permitted to hold such bank accounts or similar instruments or accounts in\nits name as it deems necessary to carry out its responsibilities and purposes as\ncontemplated under this \n\n\n - 35 -\n 42\n\n\nAgreement and its organizational documents (provided that accounts held on\nbehalf of the Partnership to permit the General Partner to carry out its\nresponsibilities under this Agreement shall be considered to belong to the\nPartnership and the interest earned thereon shall, subject to Section 7.4.B, be\napplied for the benefit of the Partnership); and, provided further that, the\nGeneral Partner shall be permitted to acquire, directly or through a Qualified\nREIT Subsidiary or limited liability company, up to a one percent (1%) interest\nin any partnership or limited liability company at least ninety-nine percent\n(99%) of the equity of which is owned, directly or indirectly, by the\nPartnership. The General Partner and any of its Affiliates may acquire Limited\nPartnership Interests and shall be entitled to exercise all rights of a Limited\nPartner relating to such Limited Partnership Interests.\n\n B. Repurchase of Shares. If the General Partner exercises its\nrights under the Declaration of Trust to purchase Shares or otherwise elects to\npurchase from its shareholders Shares in connection with a share repurchase or\nsimilar program or for the purpose of delivering such shares to satisfy an\nobligation under any dividend reinvestment or share purchase program adopted by\nthe General Partner, any employee share purchase plan adopted by the General\nPartner or any similar obligation or arrangement undertaken by the General\nPartner in the future, then the General Partner shall cause the Partnership to\npurchase from the General Partner that number of Partnership Units of the\nappropriate class equal to the product obtained by multiplying the number of\nShares purchased by the General Partner times a fraction, the numerator of which\nis one and the denominator of which is the Conversion Factor, on the same terms\nand for the same aggregate price that the General Partner purchased such Shares.\n\n C. Forfeiture of Shares. If the Partnership or the General\nPartner acquires Shares as a result of the forfeiture of such Shares under a\nrestricted or similar share plan, then the General Partner shall cause the\nPartnership to cancel that number of Partnership Units equal to the number of\nShares so acquired, and, if the Partnership acquired such Shares, it shall\ntransfer such Shares to the General Partner for cancellation.\n\n D. Issuances of Shares. After the Effective Date, the General\nPartner shall not grant, award, or issue any additional Shares (other than\nShares issued pursuant to Section 8.6 hereof, pursuant to a dividend or\ndistribution (including any share split) of Shares to all of its shareholders),\nor in connection with any acquisition permitted by Section 7.5.A hereof of up to\na one percent (1%) interest in any partnership or limited liability company at\nleast ninety-nine percent (99%) of the equity of which is owned, directly or\nindirectly, by the Partnership), other equity securities of the General Partner,\nNew Securities or Convertible Funding Debt unless (i) the General Partner shall\ncause, pursuant to Section 4.2.A hereof, the Partnership to issue to the General\nPartner Partnership Interests or rights, options, warrants or convertible or\nexchangeable securities of the Partnership having designations, preferences and\nother rights, all such that the economic interests are substantially the same as\nthose of such additional Shares, other equity securities, \n\n\n - 36 -\n 43\n\n\nNew Securities or Convertible Funding Debt, as the case may be, and (ii) the\nGeneral Partner transfers to the Partnership, as an additional Capital\nContribution, the proceeds from the grant, award, or issuance of such additional\nShares, other equity securities, New Securities or Convertible Funding Debt, as\nthe case may be, or from the exercise of rights contained in such additional\nShares, other equity securities, New Securities or Convertible Funding Debt, as\nthe case may be. Without limiting the foregoing, the General Partner is\nexpressly authorized to issue additional Shares, other equity securities, New\nSecurities or Convertible Funding Debt, as the case may be, for less than fair\nmarket value, and the General Partner is expressly authorized, pursuant to\nSection 4.2.A hereof, to cause the Partnership to issue to the General Partner\ncorresponding Partnership Interests, as long as (a) the General Partner\nconcludes in good faith that such issuance is in the interests of the General\nPartner and the Partnership (for example, and not by way of limitation, the\nissuance of Shares and corresponding Partnership Units pursuant to a share\npurchase plan providing for purchases of Shares, either by employees or\nshareholders, at a discount from fair market value or pursuant to employee share\noptions that have an exercise price that is less than the fair market value of\nthe Shares, either at the time of issuance or at the time of exercise) and (b)\nthe General Partner transfers all proceeds from any such issuance or exercise to\nthe Partnership as an additional Capital Contribution.\n\n E. Share Option Plan. If at any time or from time to time, the\nGeneral Partner sells Shares pursuant to any Share Option Plan, the General\nPartner shall transfer the net proceeds of the sale of such Shares to the\nPartnership as an additional Capital Contribution in exchange for an amount of\nadditional Partnership Units equal to the number of Shares so sold divided by\nthe Conversion Factor.\n\n F. Funding Debt. The General Partner may incur a Funding Debt,\nincluding, without limitation, a Funding Debt that is convertible into Shares or\notherwise constitutes a class of New Securities (\"Convertible Funding Debt\"),\nsubject to the condition that the General Partner lend to the Partnership the\nnet proceeds of such Funding Debt; provided that Convertible Funding Debt shall\nbe issued pursuant to Section 7.5.D above; and, provided further that, the\nGeneral Partner shall not be obligated to lend the net proceeds of any Funding\nDebt to the Partnership in a manner that would be inconsistent with the General\nPartner's ability to remain qualified as a REIT. If the General Partner enters\ninto any Funding Debt, the loan to the Partnership shall be on comparable terms\nand conditions, including interest rate, repayment schedule and costs and\nexpenses, as are applicable with respect to or incurred in connection with such\nFunding Debt.\n\nSECTION 7.6 TRANSACTIONS WITH AFFILIATES\n\n A. Transactions with Certain Affiliates. Except as expressly\npermitted by this Agreement, the Partnership shall not, directly or indirectly,\nsell, transfer or convey any property to, or purchase any property from, or\nborrow funds from, or lend funds to, any Partner or any Affiliate of the\nPartnership that is not also a Subsidiary of the Partnership, except pursuant to\ntransactions that are on terms that are fair and reasonable and no less\nfavorable to the Partnership than would be obtained from an unaffiliated third\nparty.\n\n B. Conflict Avoidance. The General Partner is expressly\nauthorized to enter into, in the name and on behalf of the Partnership, a right\nof first opportunity arrangement and other conflict avoidance agreements with\nvarious Affiliates of the Partnership and General Partner on such terms as the\nGeneral Partner, in its sole and absolute discretion, believes are advisable.\n\n\n - 37 -\n 44\n\n\n C. Benefit Plans Sponsored by the Partnership. The General\nPartner in its sole and absolute discretion and without the approval of the\nLimited Partners, may propose and adopt on behalf of the Partnership employee\nbenefit plans funded by the Partnership for the benefit of employees of the\nGeneral Partner, the Partnership, Subsidiaries of the Partnership or any\nAffiliate of any of them.\n\nSECTION 7.7 INDEMNIFICATION\n\n A. General. The Partnership shall indemnify each Indemnitee to\nthe fullest extent provided by the Act from and against any and all losses,\nclaims, damages, liabilities, joint or several, expenses (including, without\nlimitation, attorneys fees and other legal fees and expenses), judgments, fines,\nsettlements and other amounts arising from or in connection with any and all\nclaims, demands, actions, suits or proceedings, civil, criminal, administrative\nor investigative, incurred by the Indemnitee and relating to the Partnership or\nthe General Partner or the operation of, or the ownership of property by, the\nPartnership or the General Partner as set forth in this Agreement in which any\nsuch Indemnitee may be involved, or is threatened to be involved, as a party or\notherwise, unless it is established by a final determination of a court of\ncompetent jurisdiction that: (i) the act or omission of the Indemnitee was\nmaterial to the matter giving rise to the proceeding and either was committed in\nbad faith or was the result of active and deliberate dishonesty, (ii) the\nIndemnitee actually received an improper personal benefit in money, property or\nservices or (iii) in the case of any criminal proceeding, the Indemnitee had\nreasonable cause to believe that the act or omission was unlawful. Without\nlimitation, the foregoing indemnity shall extend to any liability of any\nIndemnitee, pursuant to a loan guarantee, contractual obligation for any\nindebtedness or other obligation or otherwise, for any indebtedness of the\nPartnership or any Subsidiary of the Partnership (including, without limitation,\nany indebtedness which the Partnership or any Subsidiary of the Partnership has\nassumed or taken subject to), and the General Partner is hereby authorized and\nempowered, on behalf of the Partnership, to enter into one or more indemnity\nagreements consistent with the provisions of this Section 7.7 in favor of any\nIndemnitee having or potentially having liability for any such indebtedness. The\ntermination of any proceeding by judgment, order or settlement does not create a\npresumption that the Indemnitee did not meet the requisite standard of conduct\nset forth in this Section 7.7.A. The termination of any proceeding by conviction\nor upon a plea of nolo contendere or its equivalent, or an entry of an order of\nprobation prior to judgment, creates a rebuttable presumption that the\nIndemnitee acted in a manner contrary to that specified in this Section 7.7.A\nwith respect to the subject matter of such proceeding. Any indemnification\npursuant to this Section 7.7 shall be made only out of the assets of the\nPartnership, and any insurance proceeds from the liability policy covering the\nGeneral Partner and any Indemnitee, and neither the General Partner nor any\nLimited Partner shall have any obligation to contribute to the capital of the\nPartnership or otherwise provide funds to enable the Partnership to fund its\nobligations under this Section 7.7.\n\n B. Advancement of Expenses. Reasonable expenses expected to be\nincurred by an Indemnitee shall be paid or reimbursed by the Partnership in\nadvance of the final disposition of any and all claims, demands, actions, suits\nor proceedings, civil, criminal, administrative or investigative made or\nthreatened against an Indemnitee upon receipt by the Partnership of (i) a\nwritten affirmation by the Indemnitee of the \n\n\n - 38 -\n 45\n\n\nIndemnitee's good faith belief that the standard of conduct necessary for\nindemnification by the Partnership as authorized in this Section 7.7.A has been\nmet and (ii) a written undertaking by or on behalf of the Indemnitee to repay\nthe amount if it shall ultimately be determined that the standard of conduct has\nnot been met.\n\n C. No Limitation of Rights. The indemnification provided by this\nSection 7.7 shall be in addition to any other rights to which an Indemnitee or\nany other Person may be entitled under any agreement, pursuant to any vote of\nthe Partners, as a matter of law or otherwise, and shall continue as to an\nIndemnitee who has ceased to serve in such capacity unless otherwise provided in\na written agreement pursuant to which such Indemnitee is indemnified.\n\n D. Insurance. The Partnership may purchase and maintain insurance\non behalf of the Indemnitees and such other Persons as the General Partner shall\ndetermine against any liability that may be asserted against or expenses that\nmay be incurred by such Person in connection with the Partnership's activities,\nregardless of whether the Partnership would have the power to indemnify such\nPerson against such liability under the provisions of this Agreement.\n\n E. Benefit Plan Fiduciary. For purposes of this Section 7.7, (i)\nexcise taxes assessed on an Indemnitee, of for which the Indemnitee is otherwise\nfound liable, with respect to an ERISA Plan pursuant to applicable law shall\nconstitute fines within the meaning of this Section 7.7, and (iii) actions taken\nor omitted by the Indemnitee with respect to an ERISA Plan in the performance of\nits duties for a purpose reasonably believed by it to be in the interest of the\nparticipants and beneficiaries of such ERISA Plan shall be deemed to be for a\npurpose which is not opposed to the best interests of the Partnership.\n\n F. No Personal Liability for Limited Partners. In no event may an\nIndemnitee subject any of the Partners to personal liability by reason of the\nindemnification provisions set forth in this Agreement.\n\n G. Interested Transactions. An Indemnitee shall not be denied\nindemnification in whole or in part under this Section 7.7 because the\nIndemnitee had an interest in the transaction with respect to which the\nindemnification applies if the transaction was otherwise permitted by the terms\nof this Agreement.\n\n H. Benefit. The provisions of this Section 7.7 are for the\nbenefit of the Indemnitees, their employees, officers, directors, trustees,\nheirs, successors, assigns and administrators and shall not be deemed to create\nany rights for the benefit of any other Persons. Any amendment, modification or\nrepeal of this Section 7.7, or any provision hereof, shall be prospective only\nand shall not in any way affect the limitation on the Partnership's liability to\nany Indemnitee under this Section 7.7 as in effect immediately prior to such\namendment, modification or repeal with respect to claims arising from or related\nto matters occurring, in whole or in part, prior to such amendment, modification\nor repeal, regardless of when such claims may arise or be asserted.\n\n I. Indemnification Payments Not Distributions. If and to the\nextent any payments to the General Partner pursuant to this Section 7.7\nconstitute gross income to \n\n\n - 39 -\n 46\n\n\nthe General Partner (as opposed to the repayment of advances made on behalf of\nthe Partnership), such amounts shall constitute guaranteed payments within the\nmeaning of Section 707(c) of the Code, shall be treated consistently therewith\nby the Partnership and all Partners, and shall not be treated as distributions\nfor purposes of computing the Partners' Capital Accounts.\n\n J. Exception to Indemnification. Notwithstanding anything to the\ncontrary in this Agreement, the General Partner shall not be entitled to\nindemnification hereunder for any loss, claim, damage, liability or expense for\nwhich the General Partner is obligated to indemnify the Partnership under any\nother agreement between the General Partner and the Partnership.\n\nSECTION 7.8 LIABILITY OF THE GENERAL PARTNER\n\n A. General. Notwithstanding anything to the contrary set forth in\nthis Agreement, the General Partner shall not be liable for monetary damages to\nthe Partnership, any Partners or any Assignees for losses sustained, liabilities\nincurred or benefits not derived as a result of errors in judgment or mistakes\nof fact or law or of any act or omission unless the General Partner acted in bad\nfaith and the act or omission was material to the matter giving rise to the\nloss, liability or benefit not derived.\n\n B. No Obligation to Consider Separate Interests of Limited\nPartners or Shareholders. The Limited Partners expressly acknowledge that the\nGeneral Partner is acting on behalf of the Partnership, that the General Partner\nis under no obligation to consider the separate interests of the Limited\nPartners (including, without limitation, the tax consequences to Limited\nPartners or Assignees) in deciding whether to cause the Partnership to take (or\ndecline to take) any actions, and that the General Partner shall not be liable\nfor monetary damages for losses sustained, liabilities incurred or benefits not\nderived by Limited Partners in connection with such decisions, provided that the\nGeneral Partner has acted in good faith.\n\n C. Actions of Agents. Subject to its obligations and duties as\nGeneral Partner set forth in Section 7.1.A, the General Partner may exercise any\nof the powers granted to it by this Agreement and perform any of the duties\nimposed upon it hereunder either directly or by or through its agents. The\nGeneral Partner shall not be responsible for any misconduct or negligence on the\npart of any such agent appointed by the General Partner in good faith.\n\n D. Effect of Amendment. Notwithstanding any other provision\ncontained herein, any amendment, modification or repeal of this Section 7.8 or\nany provision hereof shall be prospective only and shall not in any way affect\nthe limitations on the General Partner's liability to the Partnership and the\nLimited Partners under this Section 7.8 as in effect immediately prior to such\namendment, modification or repeal with respect to claims arising from or\nrelating to matters occurring, in whole or in part, prior to such amendment,\nmodification or repeal, regardless of when such claims may arise or be asserted.\n\n\n\n - 40 -\n 47\n\n\n\nSECTION 7.9 OTHER MATTERS CONCERNING THE GENERAL PARTNER\n\n A. Reliance on Documents. The General Partner may rely and shall\nbe protected in acting or refraining from acting upon any resolution,\ncertificate, statement, instrument, opinion, report, notice, request, consent,\norder, bond, debenture or other paper or document believed by it in good faith\nto be genuine and to have been signed or presented by the proper party or\nparties.\n\n B. Reliance on Advisors. The General Partner may consult with\nlegal counsel, accountants, appraisers, management consultants, investment\nbankers and other consultants and advisers selected by it, and any act taken or\nomitted to be taken in reliance upon the opinion of such Persons as to matters\nwhich the General Partner reasonably believes to be within such Person's\nprofessional or expert competence shall be conclusively presumed to have been\ndone or omitted in good faith and in accordance with such opinion.\n\n C. Action Through Agents. The General Partner shall have the\nright, in respect of any of its powers or obligations hereunder, to act through\nany of its duly authorized officers and a duly appointed attorney or\nattorneys-in-fact. Each such attorney shall, to the extent provided by the\nGeneral Partner in the power of attorney, have full power and authority to do\nand perform all and every act and duty which is permitted or required to be done\nby the General Partner hereunder.\n\n D. Actions to Maintain REIT Status or Avoid Taxation of the\nGeneral Partner Entity. Notwithstanding any other provisions of this Agreement\nor the Act, any action of the General Partner on behalf of the Partnership or\nany decision of the General Partner to refrain from acting on behalf of the\nPartnership undertaken in the good faith belief that such action or omission is\nnecessary or advisable in order (i) to protect the ability of the General\nPartner Entity to qualify as a REIT or (ii) to allow the General Partner Entity\nto avoid incurring any liability for taxes under Section 857 or 4981 of the\nCode, is expressly authorized under this Agreement and is deemed approved by all\nof the Limited Partners.\n\n E. Actions to Maintain REOC Status. If and so long as the\nPartnership Interests of \"benefit plan investors\" is \"significant\" (as such\nterms, or terms succeeding thereto with the same objective, are used in 29\nC.F.R. ss. 2510.3-101(f) (such regulation or successor regulation being known as\nthe \"Plan Assets Regulation\")), or if necessary so that the underlying assets of\nthe General Partner will not be \"plan assets\" (as such term is defined in the\nPlan Assets Regulations) of any ERISA Partner, then the General Partner shall\nconduct the affairs of the Partnership in such manner so that the Partnership\nshall qualify as a \"real estate operating company\" (REOC\"), as that term is used\nin the Plan Assets Regulations, and so that the assets of the Partnership will\nnot be plan assets of any ERISA Partner.\n\n (i) If the General Partner, pursuant to this Section\n7.09.E, intends to conduct the affairs of the Partnership as a REOC, the General\nPartner shall deliver to each ERISA Partner an opinion of counsel reasonably\nacceptable to each ERISA Partner and upon which such ERISA Partner may rely with\nrespect to the Partnership's REOC status \n\n\n - 41 -\n 48\n\n\nas of the \"initial valuation date\" and, if requested in writing by an ERISA\nPartner, as of each \"annual valuation period\" (as those terms, or terms\nsucceeding thereto with the same objective, are defined in the Plan Assets\nRegulation). Such opinion of counsel shall state, (A) as to the opinion\nrespecting the \"initial valuation date,\" that the Partnership shall qualify as a\nREOC for the period beginning on such \"initial valuation date\" and ending on the\nlast day of the first \"annual valuation period,\" and (B) as to each annual\nopinion respecting each \"annual valuation period,\" that the Partnership shall\nqualify as a REOC for the 12-month period following the last day of such \"annual\nvaluation period.\" Such opinion of counsel may rely upon, among other things, a\ncertificate of the General Partner as to the exercise of management rights with\nrespect to one or more investments (other than short-term investments pending\nlong-term commitment or distribution to investors) during the appropriate period\nand as to a description of such investments, and also shall state whether the\nPartnership has included in a certification to the opinion a statement to the\neffect that on such \"initial valuation date\" or during such \"annual valuation\nperiod\" at least 50 percent of Partnership assets (other than short-term\ninvestments pending long-term commitment or distribution to investors), valued\nat cost, were invested in real estate investments as described in the Plan\nAssets Regulation.\n\n (ii) If the opinion described in this subsection is not\nprovided in the affirmative, or if any ERISA Partner shall obtain and deliver to\nthe General Partner an opinion of counsel to such ERISA Partner (which opinion\nshall be reasonably satisfactory to the General Partner) that there is a\nreasonable probability that either the Partnership was not or will not be a REOC\nfor a period in which either (i) participation by benefit plan investors in the\nPartnership is significant or (ii) REOC status is necessary so that the\nunderlying assets of the General Partner will not be plan assets and the General\nPartner does not obtain an opinion to the contrary reasonably acceptable to each\nsuch ERISA Partner within fifteen (15) days of its receipt of the opinion\ndelivered by the ERISA Partner (it being understood that the existence or\nreaffirmation of the opinion delivered by the ERISA Partner to the General\nPartner shall not constitute the sole basis of any ERISA Partner's determination\nthat the opinion delivered within fifteen days by the General Partner is not\nreasonably satisfactory), then the General Partner is hereby authorized and\nempowered to take such actions as it deems necessary and appropriate to\nmitigate, prevent, or cure such adverse consequences as might result to an ERISA\nPartner from the underlying assets of the Partnership being assets of an ERISA\nPartner or the underlying assets of the General Partner being assets of any\nERISA Partner.\n\nSECTION 7.10 RELIANCE BY THIRD PARTIES\n\n Notwithstanding anything to the contrary in this Agreement, any\nPerson dealing with the Partnership shall be entitled to assume that the General\nPartner has full power and authority, without consent or approval of any other\nPartner or Person, to encumber, sell or otherwise use in any manner any and all\nassets of the Partnership, to enter into any contracts on behalf of the\nPartnership and to take any and all actions on behalf of the Partnership, and\nsuch Person shall be entitled to deal with the General Partner as if the General\nPartner were the Partnership's sole party in interest, both legally and\nbeneficially. Each Limited Partner hereby waives any and all defenses or other\nremedies which may be available against such Person to contest, negate or\ndisaffirm any action of the General Partner in connection with any such dealing.\nIn no event shall any \n\n\n - 42 -\n 49\n\n\nPerson dealing with the General Partner or its representatives be obligated to\nascertain that the terms of this Agreement have been complied with or to inquire\ninto the necessity or expedience of any act or action of the General Partner or\nits representatives. Each and every certificate, document or other instrument\nexecuted on behalf of the Partnership by the General Partner or its\nrepresentatives shall be conclusive evidence in favor of any and every Person\nrelying thereon or claiming thereunder that (i) at the time of the execution and\ndelivery of such certificate, document or instrument, this Agreement was in full\nforce and effect, (ii) the Person executing and delivering such certificate,\ndocument or instrument was duly authorized and empowered to do so for and on\nbehalf of the Partnership, and (iii) such certificate, document or instrument\nwas duly executed and delivered in accordance with the terms and provisions of\nthis Agreement and is binding upon the Partnership.\n\nSECTION 7.11 RESTRICTIONS ON GENERAL PARTNER'S AUTHORITY\n\n A. Consent Required. The General Partner may not take any action\nin contravention of an express prohibition or limitation of this Agreement\nwithout the written Consent of (i) all Partners adversely affected or (ii) such\nlower percentage of the Limited Partnership Interests as may be specifically\nprovided for under a provision of this Agreement or the Act.\n\n B. Sale of All Assets of the Partnership. Except as provided in\nArticle XIII, the General Partner may not, directly or indirectly, cause the\nPartnership to sell, exchange, transfer or otherwise dispose of all or\nsubstantially all of the Partnership's assets in a single transaction or a\nseries of related transactions (including by way of merger (including a\ntriangular merger), consolidation or other combination with any other Persons)\n(i) if such merger, sale or other transaction is in connection with a\nTermination Transaction permitted under Section 11.2.B hereof, without the\nConsent of the Partners holding at least a majority of the then outstanding\nPartnership Units (including any Partnership Units held by the General Partner),\nor (ii) otherwise, without the Consent of the Outside Limited Partners.\n\n C. Communications Act Investors. Unless otherwise approved in\nwriting by each affected Communications Act Investor (hereinafter defined), the\nGeneral Partner may not, directly or indirectly, cause the Partnership to invest\nin any Property or otherwise take any action that (i) would result in the\nCommunications Act Investor being placed in a position whereby it would have or\nbe deemed to have the right to act for any third party in selecting or dealing\nwith any interexchange carrier (which, for purposes hereof, shall include\nsatellite telecommunication service) in providing long distance service between\nlocal access and transport areas which originates in any State within the region\nin which the affected Communications Act Investor (or the operating company\naffiliate thereof) provides wireline telephone local exchange service, (but in\nno event shall the foregoing be deemed to prohibit the Partnership from\ncontracting with a third party to perform such functions on a discretionary\nbasis as part of its property management duties where such activity is a\nnecessary adjunct to an investment and such activities, in the aggregate, are\nnot significant in relation to the Partnership's business activities taken as a\nwhole), or (ii) would cause a significant percentage of the Partnership's gross\nincome from any Property to be attributable to either the provision or resale of\nlong distance service \n\n\n - 43 -\n 50\n\n\nbetween local access and transport areas which originates in any State within\nthe region in which the affected Communications Act Investor (or the operating\ncompany affiliate thereof) provides wireline telephone local exchange service,\nor the manufacture of telecommunications, customer premises or related\nequipment. In addition, the Partnership will not engage in any\ntelecommunications activities other than those that may be ancillary to the\nownership or operation of its investments or make an investment in a cable\ntelevision system that would violate the cable-telephone cross-ownership\nrestriction in the Communications Act of 1934, as amended, with regard to the\nlocal exchange service area of a Communications Act Investor (or the operating\ncompany affiliate thereof). Notwithstanding the foregoing, the Partnership is\nnot precluded from engaging in any telecommunications business or cable business\nunless such business is found to place the Communications Act Investor in\nviolation of law. The General Partner shall have a period of 120 days following\na finding by a court or regulatory body that such a violation exists to use its\nreasonable best efforts to prevent or eliminate such violation, including, but\nnot limited to, correction of the condition giving rise to the violation,\namendment to this Agreement or sale of the relevant property or the interest of\nthe Communications Act Investor therein. A \"Communications Act Investor\" is a\nPartner or shareholder of the General Partner that has notified the General\nPartner that it is subject to the Communications Act of 1934, as amended.\n\nSECTION 7.12 LOANS BY THIRD PARTIES\n\n The Partnership may incur Debt, or enter into similar credit,\nguarantee, financing or refinancing arrangements for any purpose (including,\nwithout limitation, in connection with any acquisition of property) with any\nPerson upon such terms as the General Partner determines appropriate.\n\n ARTICLE VIII\n RIGHTS AND OBLIGATIONS OF LIMITED PARTNERS\n\nSECTION 8.1 LIMITATION OF LIABILITY\n\n The Limited Partners shall have no liability under this Agreement\nexcept as expressly provided in this Agreement, including Section 10.5, or under\nthe Act.\n\nSECTION 8.2 MANAGEMENT OF BUSINESS\n\n No Limited Partner or Assignee (other than the General Partner,\nany of its Affiliates, or any officer, director, employee, partner, agent or\ntrustee of the General Partner, the Partnership or any of their Affiliates, in\ntheir capacity as such) shall take part in the operation, management or control\n(within the meaning of the Act) of the Partnership's business, transact any\nbusiness in the Partnership's name or have the power to sign documents for or\notherwise bind the Partnership. The transaction of any such business by the\nGeneral Partner, any of its Affiliates or any officer, director, employee,\npartner, agent or trustee of the General Partner, the Partnership or any of\ntheir Affiliates, in their capacity as such, shall not affect, impair or\neliminate the limitations on the liability of the Limited Partners or Assignees\nunder this Agreement.\n\n\n\n - 44 -\n 51\n\n\n\nSECTION 8.3 OUTSIDE ACTIVITIES OF LIMITED PARTNERS\n\n Subject to Section 7.5 hereof, and subject to any agreements\nentered into pursuant to Section 7.6.C hereof and to any other agreements\nentered into by a Limited Partner or its Affiliates with the Partnership or a\nSubsidiary, any Limited Partner (other than the General Partner) and any\nofficer, director, employee, agent, trustee, Affiliate or shareholder of any\nLimited Partner shall be entitled to and may have business interests and engage\nin business activities in addition to those relating to the Partnership,\nincluding business interests and activities in direct or indirect competition\nwith the Partnership. Neither the Partnership nor any Partners shall have any\nrights by virtue of this Agreement in any business ventures of any Limited\nPartner or Assignee. None of the Limited Partners (other than the General\nPartner) or any other Person shall have any rights by virtue of this Agreement\nor the partnership relationship established hereby in any business ventures of\nany other Person (other than the General Partner to the extent expressly\nprovided herein), and such Person shall have no obligation pursuant to this\nAgreement to offer any interest in any such business ventures to the\nPartnership, any Limited Partner or any such other Person, even if such\nopportunity is of a character which, if presented to the Partnership, any\nLimited Partner or such other Person, could be taken by such Person.\n\nSECTION 8.4 RETURN OF CAPITAL\n\n Except pursuant to the right of redemption set forth in Section\n8.6, no Limited Partner shall be entitled to the withdrawal or return of its\nCapital Contribution, except to the extent of distributions made pursuant to\nthis Agreement or upon termination of the Partnership as provided herein. No\nLimited Partner or Assignee shall have priority over any other Limited Partner\nor Assignee either as to the return of Capital Contributions (except as\npermitted by Section 4.2.A) or, except to the extent provided by Exhibit C or as\npermitted by Sections 4.2.A, 5.1.B(i), 6.1.A(ii) and 6.1.B(i), or otherwise\nexpressly provided in this Agreement, as to profits, losses, distributions or\ncredits.\n\nSECTION 8.5 RIGHTS OF LIMITED PARTNERS RELATING TO THE PARTNERSHIP\n\n A. General. In addition to other rights provided by this\nAgreement or by the Act, and except as limited by Section 8.5.D, each Limited\nPartner shall have the right, for a purpose reasonably related to such Limited\nPartner's interest as a limited partner in the Partnership, upon written demand\nwith a statement of the purpose of such demand and at such Limited Partner's own\nexpense:\n\n (1) to obtain a copy of the most recent annual and\n quarterly reports filed with the Securities and\n Exchange Commission by either the General Partner\n Entity or the Partnership pursuant to the Exchange\n Act;\n\n (2) to obtain a copy of the Partnership's federal,\n state and local income tax returns for each\n Partnership Year;\n\n\n - 45 -\n 52\n\n (3) to obtain a current list of the name and last known\n business, residence or mailing address of each\n Partner;\n\n (4) to obtain a copy of this Agreement and the\n Certificate and all amendments thereto, together\n with executed copies of all powers of attorney\n pursuant to which this Agreement, the Certificate\n and all amendments thereto have been executed; and\n\n (5) to obtain true and full information regarding the\n amount of cash and a description and statement of\n any other property or services contributed by each\n Partner and which each Partner has agreed to\n contribute in the future, and the date on which\n each became a Partner.\n\n B. Notice of Conversion Factor. The Partnership shall notify each\nLimited Partner upon request of the then current Conversion Factor and any\nchanges that have been made thereto.\n\n C. Notice of Extraordinary Transaction of the General Partner\nEntity. The General Partner Entity shall not make any extraordinary\ndistributions of cash or property to its shareholders or effect a merger\n(including, without limitation, a triangular merger), a sale of all or\nsubstantially all of its assets or any other similar extraordinary transaction\nwithout notifying the Limited Partners of its intention to make such\ndistribution or effect such merger, sale or other extraordinary transaction at\nleast twenty (20) Business Days prior to the record date to determine\nshareholders eligible to receive such distribution or to vote upon the approval\nof such merger, sale or other extraordinary transaction (or, if no such record\ndate is applicable, at least twenty (20) business days before consummation of\nsuch merger, sale or other extraordinary transaction); provided, however, that\nthe General Partner, in its sole discretion, may shorten the required notice\nperiod of not less than twenty (20) business days prior to the record date to\ndetermine the shareholders eligible to vote upon a merger transaction (but not\nany of the other transactions covered by this Section 8.5.C.) by up to ten (10)\nbusiness days (thereby continuing to afford the holders of Units the opportunity\nto redeem Units under Section 8.6 on or prior to the record date for the\nshareholder vote on the merger transaction) so long as (i) the General Partner\nEntity will be the surviving entity in such merger transaction, (ii) immediately\nfollowing the merger transaction, Persons who held voting securities of the\nGeneral Partner Entity immediately prior to such merger transaction will hold,\nsolely by reason of the ownership of voting securities of the General Partner\nEntity immediately prior to the merger transaction, voting securities of the\nGeneral Partner Entity representing not less than fifty one percent (51%) of the\ntotal combined voting power of all outstanding voting securities of the General\nPartner Entity after such merger, and (iii) in the event that in connection with\nsuch merger transaction the Partnership will merge with another entity, the\nPartnership will be the surviving entity in such merger. This provision for such\nnotice shall not be deemed (i) to permit any transaction that otherwise is\nprohibited by this Agreement or requires a Consent of the Partners or (ii) to\nrequire a Consent on the part of any one or more of the Limited Partners to a\ntransaction that does not otherwise require Consent under this Agreement. Each\nLimited Partner agrees, as a \n\n\n - 46 -\n 53\n\n\ncondition to the receipt of the notice pursuant hereto, to keep confidential the\ninformation set forth therein until such time as the General Partner Entity has\nmade public disclosure thereof and to use such information during such period of\nconfidentiality solely for purposes of determining whether to exercise the\nRedemption Right; provided, however, that a Limited Partner may disclose such\ninformation to its attorney, accountant and\/or financial advisor for purposes of\nobtaining advice with respect to such exercise so long as such attorney,\naccountant and\/or financial advisor agrees to receive and hold such information\nsubject to this confidentiality requirement; provided, however, that the General\nPartner, in its sole discretion, may shorten the required notice period of not\nless than twenty (20) business days prior to the record date to determine the\nshareholders eligible to vote upon a merger transaction (but not any of the\nother transactions covered by this Section 8.5.C.) to a period of not less than\nten (10) calendar days (thereby continuing to afford the holders of Units the\nopportunity to redeem Units under Section 8.6 on or prior to the record date for\nthe shareholder vote on the merger transaction) so long as (i) the General\nPartner Entity will be the surviving entity in such merger transaction, (ii)\nimmediately following the merger transaction, Persons who held voting securities\nof the General Partner Entity immediately prior to such merger transaction will\nhold, solely by reason of the ownership of voting securities of the General\nPartner Entity immediately prior to the merger transaction, voting securities of\nthe General Partner Entity representing not less than fifty-one percent (51%) of\nthe total combined voting power of all outstanding voting securities of the\nGeneral Partner Entity after such merger, and (iii) in the event that in\nconnection with such merger transaction the Partnership will merge with another\nentity, the Partnership will be the surviving entity in such merger.\n\n D. Confidentiality. Notwithstanding any other provision of this\nSection 8.5, the General Partner may keep confidential from the Limited\nPartners, for such period of time as the General Partner determine in its sole\nand absolute discretion to be reasonable, any information that (i) the General\nPartner reasonably believes to be in the nature of trade secrets or other\ninformation the disclosure of which the General Partner in good faith believes\nis not in the best interests of the Partnership or could damage the Partnership\nor its business or (ii) the Partnership is required by law or by agreements with\nunaffiliated third parties to keep confidential.\n\nSECTION 8.6 REDEMPTION RIGHT\n\n A. General. (i) Subject to Section 8.6.C, at any time on or after\nthe first anniversary date of the issuance of a Partnership Unit to a Limited\nPartner pursuant to Article IV hereof (which one-year period shall commence upon\nthe issuance of such Partnership Unit regardless of whether such Partnership\nUnit is designated upon issuance as a Class A Unit, a Class B Unit or otherwise\nand shall include the period of time from the date such Partnership Unit is\nissued to such Limited Partner as other than a Class A Unit until the date such\nPartnership Unit is converted automatically to a Class A Unit pursuant to\nSection 4.2.C hereof), or on or after such date prior to the expiration of such\none-year period as the General Partner, in its sole and absolute discretion,\ndesignates with respect to any or all Class A Units then outstanding, the holder\nof a Partnership Unit (if other than the General Partner or the General Partner\nEntity or any Subsidiary of either the General Partner or the General Partner\nEntity) shall have the right (the \"Redemption Right\") to require the Partnership\nto redeem such Partnership Unit, with such redemption \n\n\n - 47 -\n 54\n\n\nto occur on the Specified Redemption Date and at a redemption price equal to and\nin the form of the Cash Amount to be paid by the Partnership. Any such\nRedemption Right shall be exercised pursuant to a Notice of Redemption delivered\nto the Partnership (with a copy to the General Partner) by the Limited Partner\nwho is exercising the Redemption Right (the \"Redeeming Partner\"). A Limited\nPartner may exercise the Redemption Right from time to time, without limitation\nas to frequency, with respect to part or all of the Units that it owns, as\nselected by the Limited Partner, provided that a Limited Partner may not\nexercise the Redemption Right for less than one thousand (1,000) Partnership\nUnits unless such Redeeming Partner then holds less than one thousand (1,000)\nPartnership Units, in which event such Redeeming Partner must exercise the\nRedemption Right for all of the Partnership Units held by such Redeeming\nPartner.\n\n (ii) The Redeeming Partner shall have no right with\nrespect to any Partnership Units so redeemed to receive any distributions paid\nafter the Specified Redemption Date with respect to such Partnership Units.\n\n (iii) The Assignee of any Limited Partner may exercise the\nrights of such Limited Partner pursuant to this Section 8.6, and such Limited\nPartner shall be deemed to have assigned such rights to such Assignee and shall\nbe bound by the exercise of such rights by such Limited Partner's Assignee. In\nconnection with any exercise of such rights by such Assignee on behalf of such\nLimited Partner, the Cash Amount shall be paid by the Partnership directly to\nsuch Assignee and not to such Limited Partner.\n\n (iv) If the General Partner Entity provides notice to the\nLimited Partners, pursuant to Section 8.5.C hereof, the Redemption Right shall\nbe exercisable, without regard to whether the Partnership Units have been\noutstanding for any specified period, during the period commencing on the date\non which the General Partner Entity provides such notice and ending on the\nrecord date to determine shareholders eligible to receive such distribution or\nto vote upon the approval of such merger, sale or other extraordinary\ntransaction (or, if no such record date is applicable, at least twenty (20)\nbusiness days before the consummation of such merger, sale or other\nextraordinary transaction). If this subparagraph (iv) applies, the Specified\nRedemption Date is the date on which the Partnership and the General Partner\nreceive notice of exercise of the Redemption Right, rather than ten (10)\nBusiness Days after receipt of the notice of redemption.\n\n B. General Partner Assumption of Right. (i) If a Limited Partner\nhas delivered a Notice of Redemption, the General Partner may, in its sole and\nabsolute discretion (subject to the limitations on ownership and transfer of\nShares set forth in the Declaration of Trust), elect to assume directly and\nsatisfy a Redemption Right by paying to the Redeeming Partner either the Cash\nAmount or the Shares Amount, as the General Partner determines in its sole and\nabsolute discretion (provided that payment of the Redemption Amount in the form\nof Shares shall be in Shares registered for resale under Section 12 of the\nExchange Act and listed for trading on the exchange or national market on which\nthe Shares are Publicly Traded and, provided further that, if the Shares are not\nPublicly Traded at the time a Redeeming Partner exercises its Redemption Right,\nthe Redemption Amount shall be paid only in the form of the Cash Amount unless\nthe Redeeming Partner, in its sole and absolute discretion, consents to payment\nof the \n\n\n - 48 -\n 55\n\n\nRedemption Amount in the form of the Shares Amount), on the Specified Redemption\nDate, whereupon the General Partner shall acquire the Partnership Units offered\nfor redemption by the Redeeming Partner and shall be treated for all purposes of\nthis Agreement as the owner of such Partnership Units. Unless the General\nPartner, in its sole and absolute discretion, shall exercise its right to assume\ndirectly and satisfy the Redemption Right, the General Partner shall not have\nany obligation to the Redeeming Partner or to the Partnership with respect to\nthe Redeeming Partner's exercise of the Redemption Right. If the General Partner\nshall exercise its right to satisfy the Redemption Right in the manner described\nin the first sentence of this Section 8.6B and shall fully perform its\nobligations in connection therewith, the Partnership shall have no right or\nobligation to pay any amount to the Redeeming Partner with respect to such\nRedeeming Partner's exercise of the Redemption Right, and each of the Redeeming\nPartner, the Partnership and the General Partner shall, for federal income tax\npurposes, treat the transaction between the General Partner and the Redeeming\nPartner as a sale of the Redeeming Partner's Partnership Units to the General\nPartner. Nothing contained in this Section 8.6.B shall imply any right of the\nGeneral Partner to require any Limited Partner to exercise the Redemption Right\nafforded to such Limited Partner pursuant to Section 8.6.A.\n\n (ii) If the General Partner determines to pay the\nRedeeming Partner the Redemption Amount in the form of Shares, the total number\nof Shares to be paid to the Redeeming Partner in exchange for the Redeeming\nPartner's Partnership Units shall be the applicable Shares Amount. If this\namount is not a whole number of Shares, the Redeeming Partner shall be paid (i)\nthat number of Shares which equals the nearest whole number less than such\namount plus (ii) an amount of cash which the General Partner determines, in its\nreasonable discretion, to represent the fair value of the remaining fractional\nShare which would otherwise be payable to the Redeeming Partner.\n\n (iii) Each Redeeming Partner agrees to execute such\ndocuments as the General Partner may reasonably require in connection with the\nissuance of Shares upon exercise of the Redemption Right.\n\n C. Exceptions to Exercise of Redemption Right. Notwithstanding\nthe provisions of Sections 8.6.A and 8.6.B, a Partner shall not be entitled to\nexercise the Redemption Right pursuant to Section 8.6.A if (but only as long as)\nthe delivery of Shares to such Partner on the Specified Redemption Date (i)\nwould be prohibited under the Declaration of Trust or (ii) would be prohibited\nunder applicable federal or state securities laws or regulations (in each case\nregardless of whether the General Partner would in fact assume and satisfy the\nRedemption Right).\n\n D. No Liens on Partnership Units Delivered for Redemption. Each\nLimited Partner covenants and agrees with the General Partner that all\nPartnership Units delivered for redemption shall be delivered to the Partnership\nor the General Partner, as the case may be, free and clear of all liens; and,\nnotwithstanding anything contained herein to the contrary, neither the General\nPartner nor the Partnership shall be under any obligation to acquire Partnership\nUnits which are or may be subject to any liens. Each Limited Partner further\nagrees that, if any state or local property transfer tax is payable as a result\nof the transfer of its Partnership Units to the Partnership or the General\nPartner, such Limited Partner shall assume and pay such transfer tax.\n\n\n\n - 49 -\n 56\n\n\n\n E. Additional Partnership Interests. If the Partnership issues\nPartnership Interests to any Additional Limited Partner pursuant to Article IV,\nthe General Partner shall make such revisions to this Section 8.6 as it\ndetermines are necessary to reflect the issuance of such Partnership Interests\n(including setting forth any restrictions on the exercise of the Redemption\nRight with respect to such Partnership Interests).\n\n ARTICLE IX\n BOOKS, RECORDS, ACCOUNTING AND REPORTS\n\nSECTION 9.1 RECORDS AND ACCOUNTING\n\n The General Partner shall keep or cause to be kept at the\nprincipal office of the Partnership appropriate books and records with respect\nto the Partnership's business, including, without limitation, all books and\nrecords necessary to provide to the Limited Partners any information, lists and\ncopies of documents required to be provided pursuant to Section 9.3. Any records\nmaintained by or on behalf of the Partnership in the regular course of its\nbusiness may be kept on, or be in the form of, punch cards, magnetic tape,\nphotographs, micrographics or any other information storage device, provided\nthat the records so maintained are convertible into clearly legible written form\nwithin a reasonable period of time. The books of the Partnership shall be\nmaintained, for financial and tax reporting purposes, on an accrual basis in\naccordance with generally accepted accounting principles.\n\nSECTION 9.2 FISCAL YEAR\n\n The fiscal year of the Partnership shall be the calendar year.\n\nSECTION 9.3 REPORTS\n\n A. Annual Reports. As soon as practicable, but in no event later\nthan the date on which the General Partner Entity mails its annual report to its\nshareholders, the General Partner Entity shall cause to be mailed to each\nLimited Partner an annual report, as of the close of the most recently ended\nPartnership Year, containing financial statements of the Partnership, or of the\nGeneral Partner Entity if such statements are prepared solely on a consolidated\nbasis with the Partnership, for such Partnership Year, presented in accordance\nwith generally accepted accounting principles, such statements to be audited by\na nationally recognized firm of independent public accountants selected by the\nGeneral Partner Entity.\n\n B. Quarterly Reports. If and to the extent that the General\nPartner Entity mails quarterly reports to its shareholders, as soon as\npracticable, but in no event later than the date on such reports are mailed, the\nGeneral Partner Entity shall cause to be mailed to each Limited Partner a report\ncontaining unaudited financial statements, as of the last day of such calendar\nquarter, of the Partnership, or of the General Partner Entity if such statements\nare prepared solely on a consolidated basis with the Partnership,\n\n\n - 50 -\n 57\n\n\nand such other information as may be required by applicable law or regulation,\nor as the General Partner determines to be appropriate.\n\n ARTICLE X\n TAX MATTERS\n\nSECTION 10.1 PREPARATION OF TAX RETURNS\n\n The General Partner shall arrange for the preparation and timely\nfiling of all returns of Partnership income, gains, deductions, losses and\nother items required of the Partnership for federal and state income tax\npurposes and shall use all reasonable efforts to furnish, within ninety (90)\ndays of the close of each taxable year, the tax information reasonably required\nby Limited Partners for federal and state income tax reporting purposes.\n\nSECTION 10.2 TAX ELECTIONS\n\n Except as otherwise provided herein, the General Partner shall,\nin its sole and absolute discretion, determine whether to make any available\nelection pursuant to the Code; provided, however, that the General Partner\nshall make the election under Section 754 of the Code in accordance with\napplicable regulations thereunder. The General Partner shall have the right to\nseek to revoke any such election (including, without limitation, the election\nunder Section 754 of the Code) upon the General Partner's determination in its\nsole and absolute discretion that such revocation is in the best interests of\nthe Partners.\n\nSECTION 10.3 TAX MATTERS PARTNER\n\n A. General. The General Partner shall be the \"tax matters\npartner\" of the Partnership for federal income tax purposes. Pursuant to\nSection 6223(c)(3) of the Code, upon receipt of notice from the IRS of the\nbeginning of an administrative proceeding with respect to the Partnership, the\ntax matters partner shall furnish the IRS with the name, address, taxpayer\nidentification number and profit interest of each of the Limited Partners and\nany Assignees; provided, however, that such information is provided to the\nPartnership by the Limited Partners.\n\n B. Powers. The tax matters partner is authorized, but not\n required:\n\n (1) to enter into any settlement with the IRS with\n respect to any administrative or judicial\n proceedings for the adjustment of Partnership\n items required to be taken into account by a\n Partner for income tax purposes (such\n administrative proceedings being referred to as a\n \"tax audit\" and such judicial proceedings being\n referred to as \"judicial review\"), and in the\n settlement agreement the tax matters partner may\n expressly state that such agreement shall bind all\n Partners, except that such settlement agreement\n shall not bind any Partner (i) who \n\n\n - 51 -\n 58\n\n\n (within the time prescribed pursuant to the Code\n and Regulations) files a statement with the IRS\n providing that the tax matters partner shall not\n have the authority to enter into a settlement\n agreement on behalf of such Partner or (ii) who is\n a \"notice partner\" (as defined in Section\n 6231(a)(8) of the Code) or a member of a \"notice\n group\" (as defined in Section 6223(b)(2) of the\n Code);\n\n (2) if a notice of a final administrative adjustment\n at the Partnership level of any item required to\n be taken into account by a Partner for tax\n purposes (a \"final adjustment\") is mailed to the\n tax matters partner, to seek judicial review of\n such final adjustment, including the filing of a\n petition for readjustment with the Tax Court or\n the filing of a complaint for refund with the\n United States Claims Court or the District Court\n of the United States for the district in which the\n Partnership's principal place of business is\n located;\n\n (3) to intervene in any action brought by any other\n Partner for judicial review of a final adjustment;\n\n (4) to file a request for an administrative adjustment\n with the IRS at any time and, if any part of such\n request is not allowed by the IRS, to file an\n appropriate pleading (petition or complaint) for\n judicial review with respect to such request;\n\n (5) to enter into an agreement with the IRS to extend\n the period for assessing any tax which is\n attributable to any item required to be taken into\n account by a Partner for tax purposes, or an item\n affected by such item; and\n\n (6) to take any other action on behalf of the Partners\n of the Partnership in connection with any tax\n audit or judicial review proceeding to the extent\n permitted by applicable law or regulations.\n\n The taking of any action and the incurring of any expense by the\ntax matters partner in connection with any such proceeding, except to the\nextent required by law, is a matter in the sole and absolute discretion of the\ntax matters partner and the provisions relating to indemnification of the\nGeneral Partner set forth in Section 7.7 shall be fully applicable to the tax\nmatters partner in its capacity as such.\n\n C. Reimbursement. The tax matters partner shall receive no\ncompensation for its services. All third party costs and expenses incurred by\nthe tax matters partner in performing its duties as such (including legal and\naccounting fees and expenses) shall be borne by the Partnership. Nothing herein\nshall be construed to restrict the Partnership from engaging an accounting firm\nand\/or law firm to assist the tax matters \n\n\n - 52 -\n 59\n\n\npartner in discharging its duties hereunder, so long as the compensation paid by\nthe Partnership for such services is reasonable.\n\nSECTION 10.4 ORGANIZATIONAL EXPENSES\n\n The Partnership shall elect to deduct expenses, if any, incurred\nby it in organizing the Partnership ratably over a sixty (60) month period as\nprovided in Section 709 of the Code.\n\nSECTION 10.5 WITHHOLDING\n\n Each Limited Partner hereby authorizes the Partnership to\nwithhold from or pay on behalf of or with respect to such Limited Partner any\namount of federal, state, local, or foreign taxes that the General Partner\ndetermines that the Partnership is required to withhold or pay with respect to\nany amount distributable or allocable to such Limited Partner pursuant to this\nAgreement, including, without limitation, any taxes required to be withheld or\npaid by the Partnership pursuant to Section 1441, 1442, 1445, or 1446 of the\nCode. Any amount paid on behalf of or with respect to a Limited Partner shall\nconstitute a loan by the Partnership to such Limited Partner, which loan shall\nbe repaid by such Limited Partner within fifteen (15) days after notice from\nthe General Partner that such payment must be made unless (i) the Partnership\nwithholds such payment from a distribution which would otherwise be made to the\nLimited Partner or (ii) the General Partner determines, in its sole and\nabsolute discretion, that such payment may be satisfied out of the available\nfunds of the Partnership which would, but for such payment, be distributed to\nthe Limited Partner. Any amounts withheld pursuant to the foregoing clauses (i)\nor (ii) shall be treated as having been distributed to such Limited Partner.\nEach Limited Partner hereby unconditionally and irrevocably grants to the\nPartnership a security interest in such Limited Partner's Partnership Interest\nto secure such Limited Partner's obligation to pay to the Partnership any\namounts required to be paid pursuant to this Section 10.5. If a Limited Partner\nfails to pay any amounts owed to the Partnership pursuant to this Section 10.5\nwhen due, the General Partner may, in its sole and absolute discretion, elect\nto make the payment to the Partnership on behalf of such defaulting Limited\nPartner, and in such event shall be deemed to have loaned such amount to such\ndefaulting Limited Partner and shall succeed to all rights and remedies of the\nPartnership as against such defaulting Limited Partner (including, without\nlimitation, the right to receive distributions). Any amounts payable by a\nLimited Partner hereunder shall bear interest at the base rate on corporate\nloans at large United States money center commercial banks, as published from\ntime to time in the Wall Street Journal, plus four (4) percentage points (but\nnot higher than the maximum lawful rate under the laws of the State of\nIllinois) from the date such amount is due (i.e., fifteen (15) days after\ndemand) until such amount is paid in full. Each Limited Partner shall take such\nactions as the Partnership or the General Partner shall request to perfect or\nenforce the security interest created hereunder.\n\n\n - 53 -\n 60\n\n\n ARTICLE XI\n TRANSFERS AND WITHDRAWALS\n\nSECTION 11.1 TRANSFER\n\n A. Definition. The term \"transfer,\" when used in this Article XI\nwith respect to a Partnership Interest or a Partnership Unit, shall be deemed\nto refer to a transaction by which the General Partner purports to assign all\nor any part of its General Partnership Interest to another Person or by which a\nLimited Partner purports to assign all or any part of its Limited Partnership\nInterest to another Person, and includes a sale, assignment, gift, pledge,\nencumbrance, hypothecation, mortgage, exchange or any other disposition by law\nor otherwise. The term \"transfer\" when used in this Article XI does not include\nany redemption or repurchase of Partnership Units by the Partnership from a\nPartner or acquisition of Partnership Units from a Limited Partner by the\nGeneral Partner pursuant to Section 8.6 or otherwise. No part of the interest\nof a Limited Partner shall be subject to the claims of any creditor, any spouse\nfor alimony or support, or to legal process, and may not be voluntarily or\ninvoluntarily alienated or encumbered except as may be specifically provided\nfor in this Agreement.\n\n B. General. No Partnership Interest shall be transferred, in\nwhole or in part, except in accordance with the terms and conditions set forth\nin this Article XI. Any transfer or purported transfer of a Partnership\nInterest not made in accordance with this Article XI shall be null and void.\n\nSECTION 11.2 TRANSFERS OF PARTNERSHIP INTERESTS OF GENERAL PARTNER\n\n A. Except for transfers of Partnership Units to the Partnership\nas provided in Section 7.5 or Section 8.6, the General Partner may not transfer\nany of its Partnership Interest (including both its General Partnership\nInterest and its Limited Partnership Interest) except in connection with a\ntransaction described in Section 11.2.B or as otherwise expressly permitted\nunder this Agreement, nor shall the General Partner withdraw as the General\nPartner except in connection with a transaction described in Section 11.2.B.\n\n B. The General Partner shall not engage in any merger (including\na triangular merger), consolidation or other combination with or into another\nperson, sale of all or substantially all of its assets or any reclassification,\nrecapitalization or change of outstanding Shares (other than a change in par\nvalue, or from par value to no par value, or as a result of a subdivision or\ncombination as described in the definition of \"Conversion Factor\")\n(\"Termination Transaction\"), unless the Termination Transaction has been\napproved by the Consent of the Partners holding at least a majority of the then\noutstanding Partnership Units (including any Partnership Units held by the\nGeneral Partner) and in connection with which all Limited Partners either will\nreceive, or will have the right to elect to receive, for each Partnership Unit\nan amount of cash, securities, or other property equal to the product of the\nConversion Factor multiplied by the greatest amount of cash, securities or\nother property paid to a holder of Shares corresponding to such Partnership\nUnit in consideration of one such Share at any time during the period \n\n\n - 54 -\n 61\n\n\nfrom and after the date on which the Termination Transaction is consummated;\nprovided that if, in connection with the Termination Transaction, a purchase,\ntender or exchange offer shall have been made to and accepted by the holders of\nmore than fifty percent (50%) of the outstanding Shares, each holder of\nPartnership Units shall receive, or shall have the right to elect to receive\nwithout any right of Consent set forth above in this subsection B, the greatest\namount of cash, securities, or other property which such holder would have\nreceived had it exercised the Redemption Right and received Shares in exchange\nfor its Partnership Units immediately prior to the expiration of such purchase,\ntender or exchange offer and had thereupon accepted such purchase, tender or\nexchange offer.\n\nSECTION 11.3 LIMITED PARTNERS' RIGHTS TO TRANSFER\n\n A. General. Subject to the provisions of Sections 11.3.C,\n11.3.D, 11.3.E, 11.4 and 11.6, a Limited Partner (other than the General\nPartner) may transfer with or without the consent of the General Partner, all\nor any portion of its Partnership Interest, or any of such Limited Partner's\nrights as a Limited Partner, provided that prior written notice of such\nproposed transfer is delivered to the General Partner. Notwithstanding the\nforegoing, any Limited Partner may, at any time, without the consent of the\nGeneral Partner, (i) transfer all or any portion of its Partnership Interest to\nthe General Partner, (ii) transfer all or any portion of its Partnership\nInterest to an Affiliate, another original Limited Partner or to an Immediate\nFamily member, subject to the provisions of Section 11.6, (iii) transfer all or\nany portion of its Partnership Interest to a trust for the benefit of a\ncharitable beneficiary or to a charitable foundation, subject to the provisions\nof Section 11.6, and (iv) subject to the provisions of Section 11.6, pledge (a\n\"Pledge\") all or any portion of its Partnership Interest to a lending\ninstitution, which is not an Affiliate of such Limited Partner, as collateral\nor security for a bona fide loan or other extension of credit, and transfer\nsuch pledged Partnership Interest to such lending institution in connection\nwith the exercise of remedies under such loan or extension or credit. Each\nLimited Partner or Assignee (resulting from a transfer made pursuant to clauses\n(i) - (iv) of the proviso of the preceding sentence) shall have the right to\ntransfer all or any portion of its Partnership Interest, subject to the\nprovisions of Section 11.6 and the satisfaction of each of the following\nconditions (in addition to the right of each such Limited Partner or Assignee\nto continue to make any such transfer permitted by clauses (i) - (iv) of such\nproviso without satisfying either of the following conditions):\n\n (a) GENERAL PARTNER RIGHT OF FIRST REFUSAL. The\n transferring Partner shall give written notice of the\n proposed transfer to the General Partner, which notice\n shall state (i) the identity of the proposed transferee,\n and (ii) the amount and type of consideration proposed to\n be received for the transferred Partnership Units. The\n General Partner shall have ten (10) days upon which to\n give the transferring Partner notice of its election to\n acquire the Partnership Units on the proposed terms. If\n it so elects, it shall purchase the Partnership Units\n on such terms within ten (10) days after giving notice\n of such election. If it does not so elect, the\n transferring Partner may transfer such Partnership Units\n to a third party, on \n\n\n - 55 -\n 62\n\n\n economic terms no more favorable to the transferee than the\n proposed terms, subject to the other conditions of this\n Section 11.3.\n\n (b) QUALIFIED TRANSFEREE. Any transfer of a Partnership\n Interest shall be made only to Qualified Transferees.\n\n It is a condition to any transfer otherwise permitted hereunder\n(excluding Pledges of a Partnership Interest, but including any transfer of the\npledged Partnership Interest, whether to the secured party or otherwise,\npursuant to the secured party's exercise of its remedies under such Pledge or\nthe related loan or extension of credit) that the transferee assumes by\noperation of law or express agreement all of the obligations of the transferor\nLimited Partner under this Agreement with respect to such transferred\nPartnership Interest and no such transfer (other than pursuant to a statutory\nmerger or consolidation wherein all obligations and liabilities of the\ntransferor Partner are assumed by a successor corporation by operation of law)\nshall relieve the transferor Partner of its obligations under this Agreement\nwithout the approval of the General Partner, in its reasonable discretion.\nNotwithstanding the foregoing, any transferee of any transferred Partnership\nInterest shall be subject to any and all ownership limitations contained in the\nDeclaration of Trust. Any transferee, whether or not admitted as a Substituted\nLimited Partner, shall take subject to the obligations of the transferor\nhereunder. Unless admitted as a Substitute Limited Partner, no transferee,\nwhether by a voluntary transfer, by operation of law or otherwise, shall have\nrights hereunder, other than the rights of an Assignee as provided in Section\n11.5.\n\n B. Incapacitated Limited Partners. If a Limited Partner is\nsubject to Incapacity, the executor, administrator, trustee, committee,\nguardian, conservator or receiver of such Limited Partner's estate shall have\nall the rights of a Limited Partner, but not more rights than those enjoyed by\nother Limited Partners for the purpose of settling or managing the estate and\nsuch power as the Incapacitated Limited Partner possessed to transfer all or\nany part of its interest in the Partnership. The Incapacity of a Limited\nPartner, in and of itself, shall not dissolve or terminate the Partnership.\n\n C. No Transfers Violating Securities Laws. The General Partner\nmay prohibit any transfer of Partnership Units by a Limited Partner unless it\nreceives a written opinion of legal counsel (which opinion and counsel shall be\nreasonably satisfactory to the Partnership) to such Limited Partner that such\ntransfer would not require filing of a registration statement under the\nSecurities Act or would not otherwise violate any federal, or state securities\nlaws or regulations applicable to the Partnership or the Partnership Unit or,\nat the option of the Partnership, an opinion of legal counsel to the\nPartnership to the same effect.\n\n D. No Transfers Affecting Tax Status of Partnership. No transfer\nof Partnership Units by a Limited Partner (including a redemption or exchange\npursuant to Section 8.6) may be made to any Person if (i) in the opinion of\nlegal counsel for the Partnership, it would result in the Partnership being\ntreated as an association taxable as a corporation for federal income tax\npurposes or would result in a termination of the \n\n\n - 56 -\n 63\n\n\nPartnership for federal income tax purposes (except as a result of the\nredemption or exchange for Shares of all Partnership Units held by all Limited\nPartners other than the General Partner or the General Partner Entity or any\nSubsidiary of the General Partner or the General Partner Entity or pursuant to a\ntransaction expressly permitted under Section 7.11.B or Section 11.2), (ii) in\nthe opinion of legal counsel for the Partnership, it would adversely affect the\nability of the General Partner Entity to continue to qualify as a REIT or would\nsubject the General Partner Entity to any additional taxes under Section 857 or\nSection 4981 of the Code or (iii) such transfer is effectuated through an\n\"established securities market\" or a \"secondary market (or the substantial\nequivalent thereof)\" within the meaning of Section 7704 of the Code (provided\nthat this clause (iii) shall not be the basis for limiting or restricting in any\nmanner the exercise of the Redemption Right under Section 8.6 unless, and only\nto the extent that, outside tax counsel provides to the General Partner an\nopinion to the effect that, in the absence of such limitation or restriction,\nthere is a significant risk that the Partnership will be treated as a \"publicly\ntraded partnership\" and, by reason thereof, taxable as a corporation).\n\n E. No Transfers to Holders of Nonrecourse Liabilities. No Pledge\nor transfer of any Partnership Units may be made to a lender to the Partnership\nor any Person who is related (within the meaning of Section 1.752-4(b) of the\nRegulations) to any lender to the Partnership whose loan constitutes a\nNonrecourse Liability unless (i) the General Partner is provided notice thereof\nand (ii) the lender enters into an arrangement with the Partnership and the\nGeneral Partner to exchange or redeem for the Redemption Amount any Partnership\nUnits in which a security interest is held simultaneously with the time at\nwhich such lender would be deemed to be a partner in the Partnership for\npurposes of allocating liabilities to such lender under Section 752 of the\nCode.\n\nSECTION 11.4 SUBSTITUTED LIMITED PARTNERS\n\n A. Consent of General Partner. No Limited Partner shall have the\nright to substitute a transferee as a Limited Partner in its place. The General\nPartner shall, however, have the right to consent to the admission of a\ntransferee of the interest of a Limited Partner pursuant to this Section 11.4\nas a Substituted Limited Partner, which consent may be given or withheld by the\nGeneral Partner in its sole and absolute discretion. The General Partner's\nfailure or refusal to permit a transferee of any such interests to become a\nSubstituted Limited Partner shall not give rise to any cause of action against\nthe Partnership or any Partner. The General Partner hereby grants its consent\nto the admission as a Substituted Limited Partner to any bona fide financial\ninstitution that loans money or otherwise extends credit to a holder of Units\nand thereafter becomes the owner of such Units pursuant to the exercise by such\nfinancial institution of its rights under a Pledge of such Units granted in\nconnection with such loan or extension of credit.\n\n B. Rights of Substituted Limited Partner. A transferee who has\nbeen admitted as a Substituted Limited Partner in accordance with this Article\nXI shall have all the rights and powers and be subject to all the restrictions\nand liabilities of a Limited Partner under this Agreement. The admission of any\ntransferee as a Substituted Limited Partner shall be conditioned upon the\ntransferee executing and delivering to the Partnership an acceptance of all the\nterms and conditions of this Agreement (including,\n\n\n - 57 -\n 64\n\n\nwithout limitation, the provisions of Section 15.11) and such other documents or\ninstruments as may be required to effect the admission.\n\n C. Amendment of Exhibit A. Upon the admission of a Substituted\nLimited Partner, the General Partner shall amend Exhibit A to reflect the name,\naddress, Capital Account, number of Partnership Units, and Percentage Interest\nof such Substituted Limited Partner and to eliminate or adjust, if necessary,\nthe name, address, Capital Account and Percentage Interest and interest of the\npredecessor of such Substituted Limited Partner.\n\nSECTION 11.5 ASSIGNEES\n\n If the General Partner, in its sole and absolute discretion,\ndoes not consent to the admission of any permitted transferee under Section\n11.3 as a Substituted Limited Partner, as described in Section 11.4, such\ntransferee shall be considered an Assignee for purposes of this Agreement. An\nAssignee shall be entitled to all the rights of an assignee of a limited\npartnership interest under the Act, including the right to receive\ndistributions from the Partnership and the share of Net Income, Net Losses,\ngain, loss and Recapture Income attributable to the Partnership Units assigned\nto such transferee, and shall have the rights granted to the Limited Partners\nunder Section 8.6, but shall not be deemed to be a holder of Partnership Units\nfor any other purpose under this Agreement, and shall not be entitled to vote\nsuch Partnership Units in any matter presented to the Limited Partners for a\nvote (such Partnership Units being deemed to have been voted on such matter in\nthe same proportion as all other Partnership Units held by Limited Partners are\nvoted). If any such transferee desires to make a further assignment of any such\nPartnership Units, such transferee shall be subject to all the provisions of\nthis Article XI to the same extent and in the same manner as any Limited\nPartner desiring to make an assignment of Partnership Units.\n\nSECTION 11.6 GENERAL PROVISIONS\n\n A. Withdrawal of Limited Partner. No Limited Partner may\nwithdraw from the Partnership other than as a result of a permitted transfer of\nall of such Limited Partner's Partnership Units in accordance with this Article\nXI or pursuant to redemption of all of its Partnership Units under Section 8.6.\n\n B. Termination of Status as Limited Partner. Any Limited Partner\nwho shall transfer all of its Partnership Units in a transfer permitted\npursuant to this Article XI or pursuant to redemption of all of its Partnership\nUnits under Section 8.6 shall cease to be a Limited Partner.\n\n C. Timing of Transfers. Transfers pursuant to this Article XI\nmay only be made upon three business days prior notice, unless the General\nPartner otherwise agrees.\n\n D. Allocations. If any Partnership Interest is transferred\nduring any quarterly segment of the Partnership's fiscal year in compliance\nwith the provisions of this Article XI or redeemed or transferred pursuant to\nSection 8.6, Net Income, Net Losses,\n\n - 58 -\n 65\n\neach item thereof and all other items attributable to such interest for such\nfiscal year shall be divided and allocated between the transferor Partner and\nthe transferee Partner by taking into account their varying interests during\nthe fiscal year in accordance with Section 706(d) of the Code, using the\ninterim closing of the books method (unless the General Partner, in its sole\nand absolute discretion, elects to adopt a daily, weekly, or a monthly\nproration period, in which event Net Income, Net Losses, each item thereof and\nall other items attributable to such interest for such fiscal year shall be\nprorated based upon the applicable method selected by the General Partner).\nSolely for purposes of making such allocations, each of such items for the\ncalendar month in which the transfer or redemption occurs shall be allocated to\nthe Person who is a Partner as of midnight on the last day of said month. All\ndistributions of Available Cash attributable to any Partnership Unit with\nrespect to which the Partnership Record Date is before the date of such\ntransfer, assignment or redemption shall be made to the transferor Partner or\nthe Redeeming Partner, as the case may be, and, in the case of a transfer or\nassignment other than a redemption, all distributions of Available Cash\nthereafter attributable to such Partnership Unit shall be made to the\ntransferee Partner.\n\n E. Additional Restrictions. In addition to any other\nrestrictions on transfer herein contained, including without limitation the\nprovisions of this Article XI, in no event may any transfer or assignment of a\nPartnership Interest by any Partner (including pursuant to Section 8.6) be made\nwithout the express consent of the General Partner, in its sole and absolute\ndiscretion, (i) to any person or entity who lacks the legal right, power or\ncapacity to own a Partnership Interest; (ii) in violation of applicable law;\n(iii) of any component portion of a Partnership Interest, such as the Capital\nAccount, or rights to distributions, separate and apart from all other\ncomponents of a Partnership Interest; (iv) if in the opinion of legal counsel\nto the Partnership such transfer would cause a termination of the Partnership\nfor federal or state income tax purposes (except as a result of the redemption\nor exchange for Shares of all Partnership Units held by all Limited Partners or\npursuant to a transaction expressly permitted under Section 7.11.B or Section\n11.2); (v) if in the opinion of counsel to the Partnership, such transfer would\ncause the Partnership to cease to be classified as a partnership for federal\nincome tax purposes (except as a result of the redemption or exchange for\nShares of all Partnership Units held by all Limited Partners or pursuant to a\ntransaction expressly permitted under Section 7.11.B or Section 11.2); (vi) if\nsuch transfer would cause the Partnership Interests of \"benefit plan investors\"\nto become \"significant,\" as those terms are used in Section 7.9.E., or would\ncause the Partnership to become, with respect to any employee benefit plan\nsubject to Title I of ERISA, a \"party-in-interest\" (as defined in Section 3(14)\nof ERISA) or a \"disqualified person\" (as defined in Section 4975(c) of the\nCode); (vii) if such transfer would, in the opinion of counsel to the\nPartnership, cause any portion of the assets of the Partnership to constitute\nassets of any employee benefit plan pursuant to Department of Labor Regulations\nSection 2510.1-101; (viii) if such transfer requires the registration of such\nPartnership Interest pursuant to any applicable federal or state securities\nlaws; (ix) if such transfer is effectuated through an \"established securities\nmarket\" or a \"secondary market\" (or the substantial equivalent thereof) within\nthe meaning of Section 7704 of the Code or such transfer causes the Partnership\nto become a \"publicly traded partnership,\" as such term is defined in Section\n469(k)(2) or Section 7704(b) of the Code (provided that this clause (ix) shall\nnot be the basis for limiting or restricting in any manner the exercise of the\nRedemption Right under Section 8.6 unless, and only to the extent that, outside\ntax\n\n - 59 -\n\n 66\n\ncounsel provides to the General Partner an opinion to the effect that, in\nthe absence of such limitation or restriction, there is a significant risk that\nthe Partnership will be treated as a \"publicly traded partnership\" and, by\nreason thereof, taxable as a corporation); (x) if such transfer subjects the\nPartnership to regulation under the Investment Company Act of 1940, the\nInvestment Advisors Act of 1940 or ERISA, each as amended; (xi) such transfer\ncould adversely affect the ability of the General Partner Entity to remain\nqualified as a REIT; or (xii) if in the opinion of legal counsel for the\ntransferring Partner (which opinion and counsel shall be reasonably\nsatisfactory to the Partnership) or legal counsel for the Partnership, such\ntransfer would adversely affect the ability of the General Partner Entity to\nqualify as a REIT or subject the General Partner Entity to any taxes under\nSection 857 or Section 4981 of the Code.\n\n F. Avoidance of \"Publicly Traded Partnership\" Status. The\nGeneral Partner shall monitor the transfers of interests in the Partnership to\ndetermine (i) if such interests are being traded on an \"established securities\nmarket\" or a \"secondary market (or the substantial equivalent thereof)\" within\nthe meaning of Section 7704 of the Code and (ii) whether additional transfers\nof interests would result in the Partnership being unable to qualify for at\nleast one of the \"safe harbors\" set forth in Regulations Section 1.7704-1 (or\nsuch other guidance subsequently published by the IRS setting forth safe\nharbors under which interests will not be treated as \"readily tradable on a\nsecondary market (or the substantial equivalent thereof)\" within the meaning of\nSection 7704 of the Code) (the \"Safe Harbors\"). The General Partner shall take\nall steps reasonably necessary or appropriate to prevent any trading of\ninterests or any recognition by the Partnership of transfers made on such\nmarkets and, except as otherwise provided herein, to insure that at least one\nof the Safe Harbors is met; provided, however, that the foregoing shall not\nauthorize the General Partner to limit or restrict in any manner the right of\nany holder of a Partnership Unit to exercise the Redemption Right in accordance\nwith the terms of Section 8.6 unless, and only to the extent that, outside tax\ncounsel provides to the General Partner an opinion to the effect that, in the\nabsence of such limitation or restriction, there is a significant risk that the\nPartnership will be treated as a \"publicly traded partnership\" and, by reason\nthereof, taxable as a corporation.\n\n\n ARTICLE XII\n ADMISSION OF PARTNERS\n\nSECTION 12.1 ADMISSION OF A SUCCESSOR GENERAL PARTNER\n\n A successor to all of the General Partner's General Partnership\nInterest pursuant to Section 11.2 who is proposed to be admitted as a successor\nGeneral Partner shall be admitted to the Partnership as the General Partner,\neffective upon such transfer. Any such successor shall carry on the business of\nthe Partnership without dissolution. In such case, the admission shall be\nsubject to such successor General Partner executing and delivering to the\nPartnership an acceptance of all of the terms and conditions of this Agreement\nand such other documents or instruments as may be required to effect the\nadmission.\n\n\n - 60 -\n\n 67\n\n\nSECTION 12.2 ADMISSION OF ADDITIONAL LIMITED PARTNERS\n\n A. General. No Person shall be admitted as an Additional Limited\nPartner without the consent of the General Partner, which consent shall be\ngiven or withheld in the General Partner's sole and absolute discretion. A\nPerson who makes a Capital Contribution to the Partnership in accordance with\nthis Agreement, including without limitation, under Section 4.1.C, or who\nexercises an option to receive Partnership Units shall be admitted to the\nPartnership as an Additional Limited Partner only with the consent of the\nGeneral Partner and only upon furnishing to the General Partner (i) evidence of\nacceptance in form satisfactory to the General Partner of all of the terms and\nconditions of this Agreement, including, without limitation, the power of\nattorney granted in Section 15.11 and (ii) such other documents or instruments\nas may be required in the discretion of the General Partner to effect such\nPerson's admission as an Additional Limited Partner. The admission of any\nPerson as an Additional Limited Partner shall become effective on the date upon\nwhich the name of such Person is recorded on the books and records of the\nPartnership, following the consent of the General Partner to such admission.\n\n B. Allocations to Additional Limited Partners. If any Additional\nLimited Partner is admitted to the Partnership on any day other than the first\nday of a Partnership Year, then Net Income, Net Losses, each item thereof and\nall other items allocable among Partners and Assignees for such Partnership\nYear shall be allocated among such Additional Limited Partner and all other\nPartners and Assignees by taking into account their varying interests during\nthe Partnership Year in accordance with Section 706(d) of the Code, using the\ninterim closing of the books method (unless the General Partner, in its sole\nand absolute discretion, elects to adopt a daily, weekly or monthly proration\nmethod, in which event Net Income, Net Losses, and each item thereof would be\nprorated based upon the applicable period selected by the General Partner).\nSolely for purposes of making such allocations, each of such items for the\ncalendar month in which an admission of any Additional Limited Partner occurs\nshall be allocated among all the Partners and Assignees including such\nAdditional Limited Partner. All distributions of Available Cash with respect to\nwhich the Partnership Record Date is before the date of such admission shall be\nmade solely to Partners and Assignees other than the Additional Limited\nPartner, and all distributions of Available Cash thereafter shall be made to\nall the Partners and Assignees including such Additional Limited Partner.\n\nSECTION 12.3 AMENDMENT OF AGREEMENT AND CERTIFICATE OF LIMITED PARTNERSHIP\n\n For the admission to the Partnership of any Partner, the General\nPartner shall take all steps necessary and appropriate under the Act to amend\nthe records of the Partnership and, if necessary, to prepare as soon as\npractical an amendment of this Agreement (including an amendment of Exhibit A)\nand, if required by law, shall prepare and file an amendment to the Certificate\nand may for this purpose exercise the power of attorney granted pursuant to\nSection 15.11 hereof.\n\n\n\n - 61 -\n\n 68\n\n ARTICLE XIII\n DISSOLUTION AND LIQUIDATION\n\nSECTION 13.1 DISSOLUTION\n\n The Partnership shall not be dissolved by the admission of\nSubstituted Limited Partners or Additional Limited Partners or by the admission\nof a successor General Partner in accordance with the terms of this Agreement.\nUpon the withdrawal of the General Partner, any successor General Partner shall\ncontinue the business of the Partnership. The Partnership shall dissolve, and\nits affairs shall be wound up, upon the first to occur of any of the following\n(\"Liquidating Events\"):\n\n (i) the expiration of its term as provided in Section\n 2.4 hereof;\n\n (ii) an event of withdrawal of the General Partner, as\ndefined in the Act (other than an event of bankruptcy), unless within ninety\n(90) days after the withdrawal a \"majority in interest\" (as defined below) of\nthe remaining Partners Consent in writing to continue the business of the\nPartnership and to the appointment, effective as of the date of withdrawal, of\na substitute General Partner;\n\n (iii) through December 31, 2046, an election to dissolve\nthe Partnership made by the General Partner with the consent of Limited\nPartners who hold ninety percent (90%) of the outstanding Units held by Limited\nPartners (including Units held by the General Partner);\n\n (iv) an election to dissolve the Partnership made by the\nGeneral Partner, in its sole and absolute discretion after December 31, 2046;\n\n (v) entry of a decree of judicial dissolution of\nthe Partnership pursuant to the provisions of the Act;\n\n (vi) the sale of all or substantially all of\nthe assets and properties of the Partnership for cash or for marketable\nsecurities; or\n\n (vii) a final and non-appealable judgment is entered by a\ncourt of competent jurisdiction ruling that the General Partner is bankrupt or\ninsolvent, or a final and non-appealable order for relief is entered by a court\nwith appropriate jurisdiction against the General Partner, in each case under\nany federal or state bankruptcy or insolvency laws as now or hereafter in\neffect, unless prior to or at the time of the entry of such order or judgment a\n\"majority in interest\" (as defined below) of the remaining Partners Consent in\nwriting to continue the business of the Partnership and to the appointment,\neffective as of a date prior to the date of such order or judgment, of a\nsubstitute General Partner.\n\n As used in this Article XIII, a \"majority in interest\" shall\nrefer to Partners (excluding the General Partner) who hold more than fifty\npercent (50%) of the outstanding Percentage Interests not held by the General\nPartner.\n\n - 62 -\n\n 69\n\nSECTION 13.2 WINDING UP\n\n A. General. Upon the occurrence of a Liquidating Event, the\nPartnership shall continue solely for the purposes of winding up its affairs in\nan orderly manner, liquidating its assets, and satisfying the claims of its\ncreditors and Partners. No Partner shall take any action that is inconsistent\nwith, or not necessary to or appropriate for, the winding up of the\nPartnership's business and affairs. The General Partner (or, if there is no\nremaining General Partner, any Person elected by a majority in interest of the\nLimited Partners (the \"Liquidator\")) shall be responsible for overseeing the\nwinding up and dissolution of the Partnership and shall take full account of\nthe Partnership's liabilities and property and the Partnership property shall\nbe liquidated as promptly as is consistent with obtaining the fair value\nthereof, and the proceeds therefrom (which may, to the extent determined by the\nGeneral Partner, include equity or other securities of the General Partner or\nany other entity) shall be applied and distributed in the following order:\n\n (1) First, to the payment and discharge of all of the\n Partnership's debts and liabilities to creditors\n other than the Partners;\n\n (2) Second, to the payment and discharge of all of the\n Partnership's debts and liabilities to the General\n Partner;\n\n (3) Third, to the payment and discharge of all of the\n Partnership's debts and liabilities to the Limited\n Partners;\n\n (4) Fourth, to the holders of Partnership Interests\n that are entitled to any preference in\n distribution upon liquidation in accordance with\n the rights of any such class or series of\n Partnership Interests, including without\n limitation, Series A Preferred Units, Series B\n Preferred Units, and Series C Preferred Units\n (and, within each such class or series, to each\n holder thereof pro rata based on the proportion of\n the total number of outstanding units of such\n class or series represented by such holder's units\n of such series or class); and\n\n (5) The balance, if any, to the Partners in accordance\n with their Capital Accounts, after giving effect\n to all contributions, distributions, and\n allocations for all periods.\n\n The General Partner shall not receive any additional\ncompensation for any services performed pursuant to this Article XIII.\n\n B. Deferred Liquidation. Notwithstanding the provisions of\nSection 13.2.A which require liquidation of the assets of the Partnership, but\nsubject to the order of priorities set forth therein, if prior to or upon\ndissolution of the Partnership the Liquidator determines that an immediate sale\nof part or all of the Partnership's assets would be impractical or would cause\nundue loss to the Partners, the Liquidator may, in its sole and absolute\ndiscretion, defer for a reasonable time the liquidation of any assets except\nthose necessary to satisfy liabilities of the Partnership (including to those\nPartners as\n\n\n - 63 -\n\n 70\n\ncreditors) or distribute to the Partners, in lieu of cash, as tenants in common\nand in accordance with the provisions of Section 13.2.A, undivided interests in\nsuch Partnership assets as the Liquidator deems not suitable for liquidation.\nAny such distributions in kind shall be made only if, in the good faith\njudgment of the Liquidator, such distributions in kind are in the best interest\nof the Partners, and shall be subject to such conditions relating to the\ndisposition and management of such properties as the Liquidator deems\nreasonable and equitable and to any agreements governing the operation of such\nproperties at such time. The Liquidator shall determine the fair market value\nof any property distributed in kind using such reasonable method of valuation\nas it may adopt.\n\nSECTION 13.3 COMPLIANCE WITH TIMING REQUIREMENTS OF REGULATIONS;\n RESTORATION OF DEFICIT CAPITAL ACCOUNTS\n\n A. Timing of Distributions. If the Partnership is \"liquidated\"\nwithin the meaning of Regulations Section 1.704-1(b)(2)(ii)(g), distributions\nshall be made under this Article XIII to the General Partner and Limited\nPartners who have positive Capital Accounts in compliance with Regulations\nSection 1.704-1(b)(2)(ii)(b)(2). In the discretion of the General Partner, a\npro rata portion of the distributions that would otherwise be made to the\nGeneral Partner and Limited Partners pursuant to this Article XIII may be: (A)\ndistributed to a trust established for the benefit of the General Partner and\nLimited Partners for the purposes of liquidating Partnership assets, collecting\namounts owed to the Partnership and paying any contingent or unforeseen\nliabilities or obligations of the Partnership or of the General Partner arising\nout of or in connection with the Partnership (in which case the assets of any\nsuch trust shall be distributed to the General Partner and Limited Partners\nfrom time to time, in the reasonable discretion of the General Partner, in the\nsame proportions as the amount distributed to such trust by the Partnership\nwould otherwise have been distributed to the General Partner and Limited\nPartners pursuant to this Agreement); or (B) withheld to provide a reasonable\nreserve for Partnership liabilities (contingent or otherwise) and to reflect\nthe unrealized portion of any installment obligations owed to the Partnership;\nprovided that such withheld amounts shall be distributed to the General Partner\nand Limited Partners as soon as practicable.\n\n B. Restoration of Deficit Capital Accounts Upon Liquidation of\nthe Partnership. If any Partner has a deficit balance in its Capital Account\n(after giving effect to all contributions, distributions and allocations for\nall taxable years, including the year during which such liquidation occurs),\nsuch Partner shall have no obligation to make any contribution to the capital\nof the Partnership with respect to such deficit, and such deficit shall not be\nconsidered a debt owed to the Partnership or to any other Person for any\npurpose whatsoever, except as otherwise set forth in this Section 13.3.B, or as\notherwise expressly agreed in writing by the affected Partner and the\nPartnership after the date hereof. Notwithstanding the foregoing, (i) if the\nGeneral Partner has a deficit balance in its Capital Account (after giving\neffect to all contributions, distributions, and allocations for all Partnership\nYears or portions thereof, including the year during which such liquidation\n\n - 64 -\n\n 71\n\noccurs), the General Partner shall contribute to the capital of the Partnership\nthe amount necessary to restore such deficit balance to zero in compliance with\nRegulations Section 1.704-1(b)(2)(ii)(b)(3); (ii) if a Protected Partner has a\ndeficit balance in its Capital Account (after giving effect to all\ncontributions, distributions, and allocations for all Partnership Years or\nportions thereof, including the year during which such liquidation occurs),\nsuch Protected Partner shall be obligated to make a contribution to the\nPartnership with respect to any such deficit balance in such Protected\nPartner's Capital Account upon a liquidation of the Partnership in an amount\nequal to the lesser of such deficit balance or such Protected Partner's\nProtected Amount; and (iii) the first sentence of this Section 13.3.B shall not\napply with respect to any other Partner to the extent, but only to such extent,\nthat such Partner previously has agreed in writing, with the consent of the\nGeneral Partner, to undertake an express obligation to restore all or any\nportion of a deficit that may exist in its Capital Account upon a liquidation\nof the Partnership (including, without limitations, those Partners who have\nundertaken \"deficit restoration obligations\" as defined in Exhibit E). No\nLimited Partner shall have any right to become a Protected Partner, to increase\nits Protected Amount, or otherwise agree to restore any portion of any deficit\nthat may exist in its Capital Account, except, and only to the extent, provided\nin Exhibits E-1 through E-6 (or the agreements described therein), without the\nexpress written consent of the General Partners, in its sole and absolute\ndiscretion. Any contribution required of a Partner under this Section 13.3.B.\nshall be made on or before the later of (i) the end of the Partnership Year in\nwhich the interest is liquidated or (ii) the ninetieth (90th) day following the\ndate of such liquidation. The proceeds of any contribution to the Partnership\nmade by a Protected Partner with respect to a deficit in such Protected\nPartner's Capital Account balance shall be treated as a Capital Contribution by\nsuch Protected Partner and the proceeds thereof shall be treated as assets of\nthe Partnership to be applied as set forth in Section 13.2.A.\n\n C. Restoration of Deficit Capital Accounts Upon a Liquidation of\na Partner's Interest by Transfer. If a Protected Partner's interest in the\nPartnership is \"liquidated\" within the meaning of Regulations Section\n1.704-1(b)(2)(ii)(g) (other than in connection with a liquidation of the\nPartnership) which term shall include a redemption by the Partnership of such\nProtected Partner's interest upon exercise of the Redemption Right, and such\nProtected Partner is designated on Exhibit E as Part II Protected Partner, such\nProtected Partner shall be required to contribute cash to the Partnership equal\nto the lesser of (i) the amount required to increase its Capital Account\nbalance as of such date to zero, or (ii) such Protected Partner's Protected\nAmount. For this purpose, (i) the Protected Partner's deficit Capital Account\nbalance shall be determined by taking into account all contributions,\ndistributions, and allocations for the portion of the Partnership Year ending\non the date of the liquidation or redemption, and (ii) solely for purposes of\ndetermining such Protected Partner's Capital Account balance, the General\nPartner shall redetermine the Carrying Value of the Partnership's assets on\nsuch date based upon the principles set forth in Sections 1.D.(3) and (4) of\nExhibit B hereto, and shall take into account the Protected Partner's allocable\nshare of any Unrealized Gain or Unrealized Loss resulting from such\nredetermination in determining the balance of its Capital Account. The amount\nof any payment required hereunder shall be due and payable within the time\nperiod specified in the second to last sentence of Section 13.3.B.\n\n D. Effect of the Death of a Protected Partner. After the death\nof a Protected Partner who is an individual, the executor of the estate of such\nProtected Partner may elect to reduce (or eliminate) the Protected Amount of\nsuch Protected Partner. Such elections may be made by such executor by\ndelivering to the General Partner within two hundred and seventy (270) days of\nthe death of such Limited Partner, a written notice setting forth the maximum\ndeficit balance in its Capital Account that such executor agrees\n\n - 65 -\n\n 72\n\nto restore under this Section 13.3, if any. If such executor does not make a\ntimely election pursuant to this Section 13.3 (whether or not the balance in\nthe applicable Capital Account is negative at such time), then the Protected\nPartner's estate (and the beneficiaries thereof who receive distributions of\nPartnership Interests therefrom) shall be deemed a Protected Partner with a\nProtected Amount in the same amount as the deceased Protected Partner. Any\nProtected Partner which itself is a partnership may likewise elect, after the\ndate of its partner's death to reduce (or eliminate) its Protected Amount by\ndelivering a similar notice to the General Partner within the time period\nspecified above, and in the absence of any such notice the Protected Amount of\nsuch Protected Partner shall not be reduced to reflect the death of any of its\npartners.\n\nSECTION 13.4 RIGHTS OF LIMITED PARTNERS\n\n Except as otherwise provided in this Agreement, each Limited\nPartner shall look solely to the assets of the Partnership for the return of\nits Capital Contributions and shall have no right or power to demand or receive\nproperty other than cash from the Partnership. Except as otherwise expressly\nprovided in this Agreement, no Limited Partner shall have priority over any\nother Limited Partner as to the return of its Capital Contributions,\ndistributions, or allocations.\n\nSECTION 13.5 NOTICE OF DISSOLUTION\n\n If a Liquidating Event occurs or an event occurs that would, but\nfor provisions of an election or objection by one or more Partners pursuant to\nSection 13.1, result in a dissolution of the Partnership, the General Partner\nshall, within thirty (30) days thereafter, provide written notice thereof to\neach of the Partners and to all other parties with whom the Partnership\nregularly conducts business (as determined in the discretion of the General\nPartner).\n\nSECTION 13.6 CANCELLATION OF CERTIFICATE OF LIMITED PARTNERSHIP\n\n Upon the completion of the liquidation of the Partnership cash\nand property as provided in Section 13.2, the Partnership shall be terminated\nand the Certificate and all qualifications of the Partnership as a foreign\nlimited partnership in jurisdictions other than the State of Delaware shall be\ncanceled and such other actions as may be necessary to terminate the\nPartnership shall be taken.\n\nSECTION 13.7 REASONABLE TIME FOR WINDING UP\n\n A reasonable time shall be allowed for the orderly winding up of\nthe business and affairs of the Partnership and the liquidation of its assets\npursuant to Section 13.2, to minimize any losses otherwise attendant upon such\nwinding-up, and the provisions of this Agreement shall remain in effect among\nthe Partners during the period of liquidation.\n\n - 66 -\n\n 73\n\nSECTION 13.8 WAIVER OF PARTITION\n\n Each Partner hereby waives any right to partition of the\nPartnership property.\n\nSECTION 13.9 LIABILITY OF LIQUIDATOR\n\n The Liquidator shall be indemnified and held harmless by the\nPartnership in the same manner and to the same degree as an Indemnitee may be\nindemnified pursuant to Section 7.7.\n\n ARTICLE XIV\n AMENDMENT OF PARTNERSHIP AGREEMENT; MEETINGS\n\nSECTION 14.1 AMENDMENTS\n\n A. General. Amendments to this Agreement may be proposed by the\nGeneral Partner or by any Limited Partners holding twenty-five percent (25%) or\nmore of the Partnership Interests. Following such proposal (except an amendment\npursuant to Section 14.1.B), the General Partner shall submit any proposed\namendment to the Limited Partners. The General Partner shall seek the written\nvote of the Partners on the proposed amendment or shall call a meeting to vote\nthereon and to transact any other business that it may deem appropriate. For\npurposes of obtaining a written vote, the General Partner may require a\nresponse within a reasonable specified time, but not less than fifteen (15)\ndays, and failure to respond in such time period shall constitute a vote which\nis consistent with the General Partner's recommendation with respect to the\nproposal. Except as provided in Section 14.1.B, 14.1.C or 14.1.D, a proposed\namendment shall be adopted and be effective as an amendment hereto if it is\napproved by the General Partner and it receives the Consent of Partners holding\na majority of the Percentage Interests of the Limited Partners (including\nLimited Partnership Interests held by the General Partner).\n\n B. Amendments Not Requiring Limited Partner Approval.\nNotwithstanding Section 14.1.A or 14.1.C, the General Partner shall have the\npower, without the consent of the Limited Partners, to amend this Agreement as\nmay be required to facilitate or implement any of the following purposes:\n\n (1) to add to the obligations of the General Partner\n or surrender any right or power granted to the\n General Partner or any Affiliate of the General\n Partner for the benefit of the Limited Partners;\n\n (2) to reflect the admission, substitution,\n termination, or withdrawal of Partners in\n accordance with this Agreement (which may be\n effected through the replacement of Exhibit A with\n an amended Exhibit A);\n\n\n - 67 -\n\n 74\n (3) to set forth the designations, rights, powers,\n duties, and preferences of the holders of any\n additional Partnership Interests issued pursuant\n to Article IV;\n\n (4) to reflect a change that does not adversely affect\n the Limited Partners in any material respect, or\n to cure any ambiguity, correct or supplement any\n provision in this Agreement not inconsistent with\n law or with other provisions of this Agreement, or\n make other changes with respect to matters arising\n under this Agreement that will not be inconsistent\n with law or with the provisions of this Agreement;\n and\n\n (5) to satisfy any requirements, conditions, or\n guidelines contained in any order, directive,\n opinion, ruling or regulation of a federal, state\n or local agency or contained in federal, state or\n local law.\n\n The General Partner shall notify the Limited Partners when any\naction under this Section 14.1.B is taken in the next regular communication to\nthe Limited Partners; provided, however, that no notice need be given of any\namendment of this Agreement to reflect the admission, substitution,\ntermination, or withdrawal of Partners in accordance with this Agreement\n(whether or not effected through the replacement of Exhibit A with an amended\nExhibit A). For purposes of the immediately preceding sentence, notwithstanding\nany other means by which the General Partner may provide any such notice to the\nLimited Partners, such notice requirement shall be deemed to have been\nsatisfied upon the filing with the Securities and Exchange Commission by the\nPartnership of any amendment to this Agreement permitted under this Section\n14.1.B as an exhibit to (i) a registration statement filed by the Partnership\nunder the Securities Act or (ii) any report or other document filed by the\nPartnership under the Exchange Act.\n\n C. Amendments Requiring Limited Partner Approval (Excluding the\nGeneral Partner). Notwithstanding Section 14.1.A, without the Consent of the\nOutside Limited Partners, the General Partner shall not amend Section 4.2.A,\nSection 5.1.E, Section 7.1.A (second sentence only), Section 7.5, Section 7.6,\nSection 7.8, Section 7.11.B, Section 11.2, Section 13.1 (other than Section\n13.1(iii) which can be amended only with a Consent of 90% of the Partnership\nUnits (including Partnership Units held by the General Partner)), the last\nsentence of Section 11.4.A (provided that no such amendment shall in any event\nadversely affect the rights of any lender who made a loan or who extended\ncredit and received in connection therewith a Pledge of Units prior to the date\nsuch amendment is adopted unless, and only to the extent such lender consents\nthereto), this Section 14.1.C or Section 14.2.\n\n D. Other Amendments Requiring Certain Limited Partner Approval.\nNotwithstanding anything in this Section 14.1 to the contrary, this Agreement\nshall not be amended with respect to any Partner adversely affected without the\nConsent of such Partner, or any Assignee who is a bona fide financial\ninstitution that loans money or otherwise extends credit to a holder of Units,\nadversely affected if such amendment would (i) convert a Limited Partner's\ninterest in the Partnership into a general partner's interest,\n\n - 68 -\n\n 75\n\n(ii) modify the limited liability of a Limited Partner, (iii) amend Section\n7.11.A, (iv) amend Article V or Article VI (except as permitted pursuant to\nSections 4.2, 5.1.E, 5.4, 6.2 and 14.1(B)(3)), (v) amend Section 8.6 or any\ndefined terms set forth in Article I that relate to the Redemption Right\n(except as permitted in Section 8.6.E), or (vi) amend Sections 11.3 or 11.5, or\nany additional restrictions from Section 11.6.E or amend Sections 14.1.B(4) or\n14.1.D. This Section 14.1.D does not require unanimous consent of all Partners\nadversely affected unless the amendment is to be effective against all Partners\nadversely affected.\n\nSECTION 14.2 MEETINGS OF THE PARTNERS\n\n A. General. Meetings of the Partners may be called by the\nGeneral Partner and shall be called upon the receipt by the General Partner of\na written request by Limited Partners holding twenty-five percent (25%) or more\nof the Partnership Interests. The call shall state the nature of the business\nto be transacted. Notice of any such meeting shall be given to all Partners not\nless than seven (7) days nor more than thirty (30) days prior to the date of\nsuch meeting. Partners may vote in person or by proxy at such meeting. Whenever\nthe vote or Consent of Partners is permitted or required under this Agreement,\nsuch vote or Consent may be given at a meeting of Partners or may be given in\naccordance with the procedure prescribed in Section 14.1.A. Except as otherwise\nexpressly provided in this Agreement, the Consent of holders of a majority of\nthe Percentage Interests held by Limited Partners (including Limited\nPartnership Interests held by the General Partner) shall control.\n\n B. Actions Without a Meeting. Any action required or permitted\nto be taken at a meeting of the Partners may be taken without a meeting if a\nwritten consent setting forth the action so taken is signed by a majority of\nthe Percentage Interests of the Partners (or such other percentage as is\nexpressly required by this Agreement). Such consent may be in one instrument or\nin several instruments, and shall have the same force and effect as a vote of a\nmajority of the Percentage Interests of the Partners (or such other percentage\nas is expressly required by this Agreement). Such consent shall be filed with\nthe General Partner. An action so taken shall be deemed to have been taken at a\nmeeting held on the effective date so certified.\n\n C. Proxy. Each Limited Partner may authorize any Person or\nPersons to act for him by proxy on all matters in which a Limited Partner is\nentitled to participate, including waiving notice of any meeting, or voting or\nparticipating at a meeting. Every proxy must be signed by the Limited Partner\nor its attorney-in-fact. No proxy shall be valid after the expiration of eleven\n(11) months from the date thereof unless otherwise provided in the proxy. Every\nproxy shall be revocable at the pleasure of the Limited Partner executing it,\nsuch revocation to be effective upon the Partnership's receipt of written\nnotice thereof.\n\n D. Conduct of Meeting. Each meeting of Partners shall be\nconducted by the General Partner or such other Person as the General Partner\nmay appoint pursuant to such rules for the conduct of the meeting as the\nGeneral Partner or such other Person deem appropriate.\n\n - 69 -\n\n 76\n\n ARTICLE XV\n GENERAL PROVISIONS\n\nSECTION 15.1 ADDRESSES AND NOTICE\n\n Any notice, demand, request or report required or permitted to\nbe given or made to a Partner or Assignee under this Agreement shall be in\nwriting and shall be deemed given or made when delivered in person or when sent\nby first class United States mail or by other means of written communication to\nthe Partner or Assignee at the address set forth in Exhibit A or such other\naddress as the Partners shall notify the General Partner in writing.\n\nSECTION 15.2 TITLES AND CAPTIONS\n\n All article or section titles or captions in this Agreement are\nfor convenience only. They shall not be deemed part of this Agreement and in no\nway define, limit, extend or describe the scope or intent of any provisions\nhereof. Except as specifically provided otherwise, references to \"Articles\"\n\"Sections\" and \"Exhibits\" are to Articles, Sections and Exhibits of this\nAgreement.\n\nSECTION 15.3 PRONOUNS AND PLURALS\n\n Whenever the context may require, any pronoun used in this\nAgreement shall include the corresponding masculine, feminine or neuter forms,\nand the singular form of nouns, pronouns and verbs shall include the plural and\nvice versa.\n\nSECTION 15.4 FURTHER ACTION\n\n The parties shall execute and deliver all documents, provide all\ninformation and take or refrain from taking action as may be necessary or\nappropriate to achieve the purposes of this Agreement.\n\nSECTION 15.5 BINDING EFFECT\n\n This Agreement shall be binding upon and inure to the benefit of\nthe parties hereto and their heirs, executors, administrators, successors,\nlegal representatives and permitted assigns.\n\nSECTION 15.6 CREDITORS\n\n Other than as expressly set forth herein with regard to any\nIndemnitee, none of the provisions of this Agreement shall be for the benefit\nof, or shall be enforceable by, any creditor of the Partnership.\n\n\n\n\n - 70 -\n\n 77\n\nSECTION 15.7 WAIVER\n\n No failure by any party to insist upon the strict performance of\nany covenant, duty, agreement or condition of this Agreement or to exercise any\nright or remedy consequent upon a breach thereof shall constitute waiver of any\nsuch breach or any other covenant, duty, agreement or condition.\n\nSECTION 15.8 COUNTERPARTS\n\n This Agreement may be executed in counterparts, all of which\ntogether shall constitute one agreement binding on all the parties hereto,\nnotwithstanding that all such parties are not signatories to the original or\nthe same counterpart. Each party shall become bound by this Agreement\nimmediately upon affixing its signature hereto.\n\nSECTION 15.9 APPLICABLE LAW\n\n This Agreement shall be construed and enforced in accordance\nwith and governed by the laws of the State of Delaware, without regard to the\nprinciples of conflicts of law.\n\nSECTION 15.10 INVALIDITY OF PROVISIONS\n\n If any provision of this Agreement is or becomes invalid,\nillegal or unenforceable in any respect, the validity, legality and\nenforceability of the remaining provisions contained herein shall not be\naffected thereby.\n\nSECTION 15.11 POWER OF ATTORNEY\n\n A. General. Each Limited Partner and each Assignee who accepts\nPartnership Units (or any rights, benefits or privileges associated therewith)\nis deemed to irrevocably constitute and appoint the General Partner, any\nLiquidator and authorized officers and attorneys-in-fact of each, and each of\nthose acting singly, in each case with full power of substitution, as its true\nand lawful agent and attorney-in-fact, with full power and authority in its\nname, place and stead to:\n\n (1) execute, swear to, acknowledge, deliver, file and\n record in the appropriate public offices (a) all\n certificates, documents and other instruments\n (including, without limitation, this Agreement and\n the Certificate and all amendments or restatements\n thereof) that the General Partner or any\n Liquidator deems appropriate or necessary to form,\n qualify or continue the existence or qualification\n of the Partnership as a limited partnership (or a\n partnership in which the limited partners have\n limited liability) in the State of Delaware and in\n all other jurisdictions in which the Partnership\n may conduct business or own property, (b) all\n instruments that the General Partner or any\n Liquidator deem appropriate or necessary to\n\n - 71 -\n\n 78\n\n reflect any amendment, change, modification or\n restatement of this Agreement in accordance with\n its terms, (c) all conveyances and other\n instruments or documents that the General Partner\n or any Liquidator deems appropriate or necessary\n to reflect the dissolution and liquidation of the\n Partnership pursuant to the terms of this\n Agreement, including, without limitation, a\n certificate of cancellation, (d) all instruments\n relating to the admission, withdrawal, removal or\n substitution of any Partner pursuant to, or other\n events described in, Article XI, XII or XIII\n hereof or the Capital Contribution of any Partner\n and (e) all certificates, documents and other\n instruments relating to the determination of the\n rights, preferences and privileges of Partnership\n Interests; and\n\n (2) execute, swear to, acknowledge and file all\n ballots, consents, approvals, waivers,\n certificates and other instruments appropriate or\n necessary, in the sole and absolute discretion of\n the General Partner or any Liquidator, to make,\n evidence, give, confirm or ratify any vote,\n consent, approval, agreement or other action which\n is made or given by the Partners hereunder or is\n consistent with the terms of this Agreement or\n appropriate or necessary, in the sole discretion\n of the General Partner or any Liquidator, to\n effectuate the terms or intent of this Agreement.\n\n Nothing contained in this Section 15.11 shall be construed as\nauthorizing the General Partner or any Liquidator to amend this Agreement\nexcept in accordance with Article XIV hereof or as may be otherwise expressly\nprovided for in this Agreement.\n\n B. Irrevocable Nature. The foregoing power of attorney is hereby\ndeclared to be irrevocable and a power coupled with an interest, in recognition\nof the fact that each of the Partners will be relying upon the power of the\nGeneral Partner or any Liquidator to act as contemplated by this Agreement in\nany filing or other action by it on behalf of the Partnership, and it shall\nsurvive and not be affected by the subsequent Incapacity of any Limited Partner\nor Assignee and the transfer of all or any portion of such Limited Partner's or\nAssignee's Partnership Units and shall extend to such Limited Partner's or\nAssignee's heirs, successors, assigns and personal representatives. Each such\nLimited Partner or Assignee hereby agrees to be bound by any representation\nmade by the General Partner or any Liquidator, acting in good faith pursuant to\nsuch power of attorney; and each such Limited Partner or Assignee hereby waives\nany and all defenses which may be available to contest, negate or disaffirm the\naction of the General Partner or any Liquidator, taken in good faith under such\npower of attorney. Each Limited Partner or Assignee shall execute and deliver\nto the General Partner or the Liquidator, within fifteen (15) days after\nreceipt of the General Partner's or Liquidator's request therefor, such further\ndesignation, powers of attorney and other instruments as the General Partner or\nthe Liquidator, as the case may be, deems necessary to effectuate this\nAgreement and the purposes of the Partnership.\n\n\n\n - 72 -\n\n 79\n\nSECTION 15.12 ENTIRE AGREEMENT\n\n This Agreement contains the entire understanding and agreement\namong the Partners with respect to the subject matter hereof and supersedes any\nprior written oral understandings or agreements among them with respect\nthereto.\n\nSECTION 15.13 NO RIGHTS AS SHAREHOLDERS\n\n Nothing contained in this Agreement shall be construed as\nconferring upon the holders of the Partnership Units any rights whatsoever as\nshareholders of the General Partner, including, without limitation, any right\nto receive dividends or other distributions made to shareholders of the General\nPartner or to vote or to consent or receive notice as shareholders in respect\nto any meeting of shareholders for the election of trustees of the General\nPartner or any other matter.\n\nSECTION 15.14 LIMITATION TO PRESERVE REIT STATUS\n\n To the extent that any amount paid or credited to the General\nPartner or any of its officers, trustees, employees or agents pursuant to\nSection 7.4 or Section 7.7 would constitute gross income to the General Partner\nfor purposes of Section 856(c)(2) or 856(c)(3) of the Code (a \"General Partner\nPayment\") then, notwithstanding any other provision of this Agreement, the\namount of such General Partner Payment for any fiscal year shall not exceed the\nlesser of:\n\n (i) an amount equal to the excess, if any, of\n(a) 4.20% of the General Partner's total gross income (but not including the\namount of any General Partner Payments) for the fiscal year which is described\nin subsections (A) though (H) of Section 856(c)(2) of the Code over (b) the\namount of gross income (within the meaning of Section 856(c)(2) of the Code)\nderived by the General Partner from sources other than those described in\nsubsections (A) through (H) of Section 856(c)(2) of the Code (but not including\nthe amount of any General Partner Payments); or\n\n (ii) an amount equal to the excess, if any of (a) 25% of\nthe General Partner's total gross income (but not including the amount of any\nGeneral Partner Payments) for the fiscal year which is described in subsections\n(A) through (I) of Section 856(c)(3) of the Code over (b) the amount of gross\nincome (within the meaning of Section 856(c)(3) of the Code) derived by the\nGeneral Partner from sources other than those described in subsections (A)\nthrough (I) of Section 856(c)(3) of the Code (but not including the amount of\nany General Partner Payments); provided, however, that General Partner Payments\nin excess of the amounts set forth in subparagraphs (i) and (ii) above may be\nmade if the General Partner, as a condition precedent, obtains an opinion of\ntax counsel that the receipt of such excess amounts would not adversely affect\nthe General Partner's ability to qualify as a REIT. To the extent General\nPartner Payments may not be made in a year due to the foregoing limitations,\nsuch General Partner Payments shall carry over and be treated as arising in the\nfollowing year, provided, however, that such amounts shall not carry over for\nmore than five years, and if not paid within such five year period, shall\nexpire; provided further, that (i) as General Partner Payments are made, such\npayments\n\n\n - 73 -\n\n 80\n\nshall be applied first to carry over amounts outstanding, if any, and (ii) with\nrespect to carry over amounts for more than one Partnership Year, such payments\nshall be applied to the earliest Partnership Year first.\n\n\n\n\n - 74 -\n 81\n\n\n IN WITNESS WHEREOF, the parties hereto have executed this\nAgreement as of the date first written above.\n\n GENERAL PARTNER:\n\n EQUITY OFFICE PROPERTIES TRUST\n\n By: \/s\/ Stanley M. Stevens\n -----------------------------\n Name: Stanley M. Stevens\n Title: Executive Vice\n President, Chief\n Legal Counsel and\n Secretary\n\n LIMITED PARTNERS:\n\n By: Equity Office Properties\n Trust, as Attorney-in-Fact\n for the Limited Partners\n\n By: \/s\/ Stanley M. Stevens\n ---------------------------\n Name: Stanley M. Stevens\n Title: Executive Vice\n President,\n Chief Legal\n Counsel and\n Secretary\n\n For purposes of Section 8.6\n hereof:\n EQUITY OFFICE PROPERTIES TRUST\n\n By: \/s\/ Stanley M. Stevens\n ------------------------------\n Name: Stanley M. Stevens\n Title: Executive Vice President,\n Chief Legal Counsel and\n Secretary\n\n\n - 75 -\n\n 82\n\n\n\n\n\n\n EXHIBIT A\n\n PARTNERS AND PARTNERSHIP INTERESTS\n\n\n<\/pre>\n
\n\n CLASS A AND CLASS B UNITS
\n ————————-<\/p>\n INITIAL PERCENTAGE
\nNAME AND ADDRESS OF PARTNER PARTNERSHIP UNITS CAPITAL ACCOUNT INTEREST (4)
\n————————— —————– ————— ————<\/p>\n
\nGENERAL PARTNER:
\n—————-<\/p>\nEquity Office Properties Trust
\nTwo North Riverside Plaza
\nSuite 2200
\nChicago, Illinois 60606<\/p>\n
LIMITED PARTNERS:
\n—————–<\/p>\n
TOTAL CLASS A AND CLASS B UNITS 100.00000%
\n ==========
\n<\/c><\/c><\/c><\/s><\/caption>\n<\/table>\n
83<\/p>\n
\n\n SERIES A PREFERRED UNITS
\n ————————
\n INITIAL
\nNAME AND ADDRESS OF PARTNER PARTNERSHIP CAPITAL PERCENTAGE
\n————————— UNITS ACCOUNT INTEREST (4)
\n ———– ——- ————<\/p>\n
\nTOTAL SERIES A PREFERRED UNITS 100.00000%
\n ==========
\n<\/c><\/c><\/c><\/s><\/caption>\n<\/table>\n\n\n SERIES B PREFERRED UNITS
\n ————————
\n INITIAL
\nNAME AND ADDRESS OF PARTNER PARTNERSHIP CAPITAL PERCENTAGE
\n————————— UNITS ACCOUNT INTEREST (4)
\n ———– ——- ————<\/p>\n
\nTOTAL SERIES B PREFERRED UNITS 100.00000%
\n ==========
\n<\/c><\/c><\/c><\/s><\/caption>\n<\/table>\n\n\n SERIES C PREFERRED UNITS
\n ————————
\n INITIAL
\nNAME AND ADDRESS OF PARTNER PARTNERSHIP CAPITAL PERCENTAGE
\n————————— UNITS ACCOUNT INTEREST (4)
\n ———– ——- ————<\/p>\n
\nTOTAL SERIES C PREFERRED UNITS 100.00000%
\n ==========
\n<\/c><\/c><\/c><\/s><\/caption>\n<\/table>\nNOTES:<\/p>\n
(1) 194 Class A Units were cancelled to provide cash for fractional share
\n amounts in connection with the merger of Beacon Properties Corporation into
\n Equity Office Properties Trust on December 19, 1997.<\/p>\n
A-2<\/p>\n
84<\/p>\n
(2) Beacon Partner
\n(3) Class B Units.
\n(4) For purposes of this calculation, the Class A Units and Class B Units are
\n treated as one class. Of the aggregate Partnership Interests currently
\n outstanding, the percentage of each class and series are as follows:<\/p>\n
\n
\n Class A and B Units (collectively) %
\n Series A Preferred Units %
\n Series B Preferred Units %
\n Series C Preferred Units %<\/p>\n 100.00%
\n<\/c><\/s><\/table>\n
(5) Acquired in connection with acquisition of Palo Alto.<\/p>\n
A-3
\n 85<\/p>\n
EXHIBIT B<\/p>\n
CAPITAL ACCOUNT MAINTENANCE<\/p>\n
1. Capital Accounts of the Partners<\/p>\n
A. The Partnership shall maintain for each Partner a separate Capital
\nAccount in accordance with the rules of Regulations Section l.704-l(b)(2)(iv).
\nSuch Capital Account shall be increased by (i) the amount of all Capital
\nContributions and any other deemed contributions made by such Partner to the
\nPartnership pursuant to this Agreement and (ii) all items of Partnership income
\nand gain (including income and gain exempt from tax) computed in accordance with
\nSection 1.B hereof and allocated to such Partner pursuant to Section 6.1 of the
\nAgreement and Exhibit C thereof, and decreased by (x) the amount of cash or
\nAgreed Value of all actual and deemed distributions of cash or property made to
\nsuch Partner pursuant to this Agreement and (y) all items of Partnership
\ndeduction and loss computed in accordance with Section 1.B hereof and allocated
\nto such Partner pursuant to Section 6.1 of the Agreement and Exhibit C thereof.<\/p>\n
B. For purposes of computing the amount of any item of income, gain,
\ndeduction or loss to be reflected in the Partners’ Capital Accounts, unless
\notherwise specified in this Agreement, the determination, recognition and
\nclassification of any such item shall be the same as its determination,
\nrecognition and classification for federal income tax purposes determined in
\naccordance with Section 703(a) of the Code (for this purpose all items of
\nincome, gain, loss or deduction required to be stated separately pursuant to
\nSection 703(a) (1) of the Code shall be included in taxable income or loss),
\nwith the following adjustments:<\/p>\n
(1) Except as otherwise provided in Regulations Section
\n 1.704-1(b)(2)(iv)(m), the computation of all items of
\n income, gain, loss and deduction shall be made without
\n regard to any election under Section 754 of the Code which
\n may be made by the Partnership, provided that the amounts
\n of any adjustments to the adjusted bases of the assets of
\n the Partnership made pursuant to Section 734 of the Code
\n as a result of the distribution of property by the
\n Partnership to a Partner (to the extent that such
\n adjustments have not previously been reflected in the
\n Partners’ Capital Accounts) shall be reflected in the
\n Capital Accounts of the Partners in the manner and subject
\n to the limitations prescribed in Regulations Section
\n l.704-1(b)(2)(iv)(m)(4).<\/p>\n
(2) The computation of all items of income, gain, and
\n deduction shall be made without regard to the fact that
\n items described in Sections 705(a)(l)(B) or 705(a)(2)(B)
\n of the Code are not includible in gross income or are
\n neither currently deductible nor capitalized for federal
\n income tax purposes.<\/p>\n
(3) Any income, gain or loss attributable to the taxable
\n disposition of any Partnership property shall be
\n determined as if the adjusted basis of such property as of
\n such date of disposition were equal in amount to<\/p>\n
86<\/p>\n
the Partnership’s Carrying Value with respect to such
\n property as of such date.<\/p>\n
(4) In lieu of the depreciation, amortization, and other cost
\n recovery deductions taken into account in computing such
\n taxable income or loss, there shall be taken into account
\n Depreciation for such fiscal year.<\/p>\n
(5) In the event the Carrying Value of any Partnership Asset
\n is adjusted pursuant to Section 1.D hereof, the amount of
\n any such adjustment shall be taken into account as gain or
\n loss from the disposition of such asset.<\/p>\n
(6) Any items specially allocated under Section 2 of Exhibit C
\n to the Agreement hereof shall not be taken into account.<\/p>\n
C. A transferee (including any Assignee) of a Partnership Unit shall
\nsucceed to a pro rata portion of the Capital Account of the transferor.<\/p>\n
D. (1) Consistent with the provisions of Regulations
\n Section 1.704-1(b)(2)(iv)(f), and as provided in
\n Section 1.D(2), the Carrying Values of all Partnership
\n assets shall be adjusted upward or downward to reflect
\n any Unrealized Gain or Unrealized Loss attributable to
\n such Partnership property, as of the times of the
\n adjustments provided in Section 1.D(2) hereof, as if
\n such Unrealized Gain or Unrealized Loss had been
\n recognized on an actual sale of each such property
\n and allocated pursuant to Section 6.1 of the Agreement.<\/p>\n
(2) Such adjustments shall be made as of the following times:
\n (a) immediately prior to the acquisition of an additional
\n interest in the Partnership by any new or existing Partner
\n in exchange for more than a de minimis Capital
\n Contribution; (b) immediately prior to the distribution by
\n the Partnership to a Partner of more than a de minimis
\n amount of property as consideration for an interest in the
\n Partnership; and (c) immediately prior to the liquidation
\n of the Partnership within the meaning of Regulations
\n Section 1.704-l(b)(2)(ii)(g), provided, however, that
\n adjustments pursuant to clauses (a) and (b) above shall be
\n made only if the General Partner determines that such
\n adjustments are necessary or appropriate to reflect the
\n relative economic interests of the Partners in the
\n Partnership.<\/p>\n
(3) In accordance with Regulations Section 1.704-
\n l(b)(2)(iv)(e), the Carrying Value of Partnership assets
\n distributed in kind shall be adjusted upward or downward
\n to reflect any Unrealized Gain or Unrealized Loss
\n attributable to such Partnership property, as of the time
\n any such asset is distributed.<\/p>\n
B-2
\n 87<\/p>\n
(4) In determining Unrealized Gain or Unrealized Loss for
\n purposes of this Exhibit B, the aggregate cash amount and
\n fair market value of all Partnership assets (including
\n cash or cash equivalents) shall be determined by the
\n General Partner using such reasonable method of valuation
\n as it may adopt, or in the case of a liquidating
\n distribution pursuant to Article XIII of the Agreement,
\n shall be determined and allocated by the Liquidator using
\n such reasonable methods of valuation as it may adopt. The
\n General Partner, or the Liquidator, as the case may be,
\n shall allocate such aggregate fair market value among the
\n assets of the Partnership in such manner as it determines
\n in its sole and absolute discretion to arrive at a fair
\n market value for individual properties.<\/p>\n
E. The provisions of the Agreement (including this Exhibit B and the
\nother Exhibits to the Agreement) relating to the maintenance of Capital Accounts
\nare intended to comply with Regulations Section 1.704-1(b), and shall be
\ninterpreted and applied in a manner consistent with such Regulations. In the
\nevent the General Partner shall determine that it is prudent to modify the
\nmanner in which the Capital Accounts, or any debits or credits thereto
\n(including, without limitation, debits or credits relating to liabilities which
\nare secured by contributed or distributed property or which are assumed by the
\nPartnership, the General Partner, or the Limited Partners) are computed in order
\nto comply with such Regulations, the General Partner may make such modification
\nwithout regard to Article XIV of the Agreement, provided that it is not likely
\nto have a material effect on the amounts distributable to any Person pursuant to
\nArticle XIII of the Agreement upon the dissolution of the Partnership. The
\nGeneral Partner also shall (i) make any adjustments that are necessary or
\nappropriate to maintain equality between the Capital Accounts of the Partners
\nand the amount of Partnership capital reflected on the Partnership’s balance
\nsheet, as computed for book purposes, in accordance with Regulations Section
\nl.704-l(b)(2)(iv)(q), and (ii) make any appropriate modifications in the event
\nunanticipated events might otherwise cause this Agreement not to comply with
\nRegulations Section l.704-1(b).<\/p>\n
2. No Interest<\/p>\n
No interest shall be paid by the Partnership on Capital Contributions or
\non balances in Partners’ Capital Accounts.<\/p>\n
3. No Withdrawal<\/p>\n
No Partner shall be entitled to withdraw any part of its Capital
\nContribution or Capital Account or to receive any distribution from the
\nPartnership, except as provided in Articles IV, V, VII and XIII of the
\nAgreement.<\/p>\n
B-3
\n 88<\/p>\n
EXHIBIT C<\/p>\n
SPECIAL ALLOCATION RULES<\/p>\n
1. Special Allocation Rules.<\/p>\n
Notwithstanding any other provision of the Agreement or this
\nExhibit C, the following special allocations shall be made in the following
\norder:<\/p>\n
A. Minimum Gain Chargeback. Notwithstanding the provisions of
\nSection 6.1 of the Agreement or any other provisions of this Exhibit C, if there
\nis a net decrease in Partnership Minimum Gain during any Partnership Year, each
\nPartner shall be specially allocated items of Partnership income and gain for
\nsuch year (and, if necessary, subsequent years) in an amount equal to such
\nPartner’s share of the net decrease in Partnership Minimum Gain, as determined
\nunder Regulations Section 1.704-2(g). Allocations pursuant to the previous
\nsentence shall be made in proportion to the respective amounts required to be
\nallocated to each Partner pursuant thereto. The items to be so allocated shall
\nbe determined in accordance with Regulations Section 1.704-2(f)(6). This Section
\n1.A is intended to comply with the minimum gain chargeback requirements in
\nRegulations Section 1.704-2(f) and for purposes of this Section 1.A only, each
\nPartner’s Adjusted Capital Account Deficit shall be determined prior to any
\nother allocations pursuant to Section 6.1 of this Agreement with respect to such
\nPartnership Year and without regard to any decrease in Partner Minimum Gain
\nduring such Partnership Year.<\/p>\n
B. Partner Minimum Gain Chargeback. Notwithstanding any other
\nprovision of Section 6.1 of this Agreement or any other provisions of this
\nExhibit C (except Section 1.A hereof), if there is a net decrease in Partner
\nMinimum Gain attributable to a Partner Nonrecourse Debt during any Partnership
\nYear, each Partner who has a share of the Partner Minimum Gain attributable to
\nsuch Partner Nonrecourse Debt, determined in accordance with Regulations Section
\n1.704-2(i)(5), shall be specially allocated items of Partnership income and gain
\nfor such year (and, if necessary, subsequent years) in an amount equal to such
\nPartner’s share of the net decrease in Partner Minimum Gain attributable to such
\nPartner Nonrecourse Debt, determined in accordance with Regulations Section
\n1.704-2(i)(5). Allocations pursuant to the previous sentence shall be made in
\nproportion to the respective amounts required to be allocated to each General
\nPartner and Limited Partner pursuant thereto. The items to be so allocated shall
\nbe determined in accordance with Regulations Section 1.704-2(i)(4). This Section
\n1.B is intended to comply with the minimum gain chargeback requirement in such
\nSection of the Regulations and shall be interpreted consistently therewith.
\nSolely for purposes of this Section 1.B, each Partner’s Adjusted Capital Account
\nDeficit shall be determined prior to any other allocations pursuant to Section
\n6.1 of the Agreement or this Exhibit with respect to such Partnership Year,
\nother than allocations pursuant to Section 1.A hereof.<\/p>\n
C. Qualified Income Offset. In the event any Partner unexpectedly
\nreceives any adjustments, allocations or distributions described in Regulations
\nSections 1.704-l(b)(2)(ii)(d)(4), l.704-1(b)(2)(ii)(d)(5), or
\n1.704-l(b)(2)(ii)(d)(6), and after giving effect to the allocations required
\nunder Sections 1.A and 1.B hereof with respect to such Partnership Year, such
\nPartner has an Adjusted Capital Account Deficit, items of<\/p>\n
89<\/p>\n
Partnership income and gain (consisting of a pro rata portion of each item of
\nPartnership income, including gross income and gain for the Partnership Year)
\nshall be specifically allocated to such Partner in an amount and manner
\nsufficient to eliminate, to the extent required by the Regulations, its
\nAdjusted Capital Account Deficit created by such adjustments, allocations or
\ndistributions as quickly as possible. This Section 1.C is intended to
\nconstitute a “qualified income offset” under Regulations Section
\n1.704-1(b)(2)(ii)(d) and shall be interpreted consistently therewith.<\/p>\n
D. Gross Income Allocation. In the event that any Partner has an
\nAdjusted Capital Account Deficit at the end of any Partnership Year (after
\ntaking into account allocations to be made under the preceding paragraphs hereof
\nwith respect to such Partnership Year), each such Partner shall be specially
\nallocated items of Partnership income and gain (consisting of a pro rata portion
\nof each item of Partnership income, including gross income and gain for the
\nPartnership Year) in an amount and manner sufficient to eliminate, to the extent
\nrequired by the Regulations, its Adjusted Capital Account Deficit.<\/p>\n
E. Nonrecourse Deductions. Nonrecourse Deductions for any
\nPartnership Year shall be allocated to the Partners in accordance with their
\nrespective Percentage Interests. If the General Partner determines in its good
\nfaith discretion that the Partnership’s Nonrecourse Deductions must be allocated
\nin a different ratio to satisfy the safe harbor requirements of the Regulations
\npromulgated under Section 704(b) of the Code, the General Partner is authorized,
\nupon notice to the Limited Partners, to revise the prescribed ratio for such
\nPartnership Year to the numerically closest ratio which would satisfy such
\nrequirements.<\/p>\n
F. Partner Nonrecourse Deductions. Any Partner Nonrecourse
\nDeductions for any Partnership Year shall be specially allocated to the Partner
\nwho bears the economic risk of loss with respect to the Partner Nonrecourse Debt
\nto which such Partner Nonrecourse Deductions are attributable in accordance with
\nRegulations Sections 1.704-2(b)(4) and 1.704-2(i).<\/p>\n
G. Code Section 754 Adjustments. To the extent an adjustment to
\nthe adjusted tax basis of any Partnership asset pursuant to Section 734(b) or
\n743(b) of the Code is required, pursuant to Regulations Section
\n1.704-l(b)(2)(iv)(m), to be taken into account in determining Capital Accounts,
\nthe amount of such adjustment to the Capital Accounts shall be treated as an
\nitem of gain (if the adjustment increases the basis of the asset) or loss (if
\nthe adjustment decreases such basis), and such item of gain or loss shall be
\nspecially allocated to the Partners in a manner consistent Exhibit E-1 with the
\nmanner in which their Capital Accounts are required to be adjusted pursuant to
\nsuch Section of the Regulations.<\/p>\n
2. Allocations for Tax Purposes<\/p>\n
A. Except as otherwise provided in this Section 2, for federal
\nincome tax purposes, each item of income, gain, loss and deduction shall be
\nallocated among the Partners in the same manner as its correlative item of
\n“book” income, gain, loss or<\/p>\n
C-2
\n 90
\ndeduction is allocated pursuant to Section 6.1 of the Agreement and Section 1
\nof this Exhibit C.<\/p>\n
B. In an attempt to eliminate Book-Tax Disparities attributable
\nto a Contributed Property or Adjusted Property, items of income, gain, loss, and
\ndeduction shall be allocated for federal income tax purposes among the Partners
\nas follows:<\/p>\n
(1) (a) In the case of a Contributed Property, such
\n items attributable thereto shall be allocated among
\n the Partners consistent with the principles of
\n Section 704(c) of the Code to take into account the
\n variation between the 704(c) Value of such property
\n and its adjusted basis at the time of contribution
\n (taking into account Section 2.C of this Exhibit
\n C); and<\/p>\n
(b) any item of Residual Gain or Residual Loss
\n attributable to a Contributed Property shall be
\n allocated among the Partners in the same manner as
\n its correlative item of “book” gain or loss is
\n allocated pursuant to Section 6.1 of the Agreement
\n and Section 1 of this Exhibit C.<\/p>\n
(2) (a) In the case of an Adjusted Property, such items
\n shall (i) first, be allocated among the Partners
\n in a manner consistent with the principles of
\n Section 704(c) of the Code to take into account the
\n Unrealized Gain or Unrealized Loss attributable to
\n such property and the allocations thereof pursuant
\n to Exhibit B;<\/p>\n
(ii) second, in the event such property was
\n originally a Contributed Property, be allocated
\n among the Partners in a manner consistent with
\n Section 2.B(1) of this Exhibit C; and<\/p>\n
(b) any item of Residual Gain or Residual Loss
\n attributable to an Adjusted Property shall be
\n allocated among the Partners in the same manner its
\n correlative item of “book” gain or loss is
\n allocated pursuant to Section 6.1 of the Agreement
\n and Section 1 of this Exhibit C.<\/p>\n
(3) all other items of income, gain, loss and deduction
\n shall be allocated among the Partners the same manner as
\n their correlative item of “book” gain or loss is allocated
\n pursuant to Section 6.1 of the Agreement and Section 1 of
\n this Exhibit C.<\/p>\n
C. To the extent Regulations promulgated pursuant to Section
\n704(c) of the Code permit a Partnership to utilize alternative methods to
\neliminate the disparities between the Carrying Value of property and its
\nadjusted basis, the General Partner shall, subject to the following, have the
\nauthority to elect the method to be used by the Partnership and such election
\nshall be binding on all Partners; provided that, to the extent that the General
\nPartner has agreed to use a particular method with respect to a<\/p>\n
C-3<\/p>\n
91<\/p>\n
Contributed Property, the General Partner shall be bound by such agreement
\n(including, without limitation, the agreements set forth in Exhibit E hereto)
\npursuant to the terms thereof. With respect to the Contributed Property
\ntransferred to the Partnership in connection with the Consolidation and the
\nBRE\/Worldwide L.L.C. purchase, the Partnership shall elect to use the
\n“traditional method” set forth in Treasury Regulation sec. 1.704-3(b).<\/p>\n
C-4<\/p>\n
92<\/p>\n
EXHIBIT D<\/p>\n
NOTICE OF REDEMPTION<\/p>\n
The undersigned hereby irrevocably (i) redeems _________
\nPartnership Units in EOP Operating Limited Partnership in accordance with the
\nterms of the Agreement of Limited Partnership of EOP Operating Limited
\nPartnership, as amended, and the Redemption Right referred to therein, (ii)
\nsurrenders such Partnership Units and all right, title and interest therein and
\n(iii) directs that the Cash Amount or Shares Amount (as determined by the
\nGeneral Partner) deliverable upon exercise of the Redemption Right be delivered
\nto the address specified below, and if Shares are to be delivered, such Shares
\nbe registered or placed in the name(s) and at the address(es) specified below.
\nThe undersigned hereby represents, warrants, and certifies that the undersigned
\n(a) has marketable and unencumbered title to such Partnership Units, free and
\nclear of the rights of or interests of any other person or entity, (b) has the
\nfull right, power and authority to redeem and surrender such Partnership Units
\nas provided herein and (c) has obtained the consent or approval of all persons
\nor entities, if any, having the right to consult or approve such redemption and
\nsurrender.<\/p>\n
Dated: Name of Limited Partner:
\n ———— —————–<\/p>\n
————————————–
\n (Signature of Limited Partner)<\/p>\n
————————————–
\n (Street Address)<\/p>\n
————————————–
\n (City) (State) (Zip Code)<\/p>\n
Signature Guaranteed by:<\/p>\n
————————————–<\/p>\n
IF SHARES ARE TO BE ISSUED, ISSUE TO:<\/p>\n
Name:
\n ————————————————-<\/p>\n
Social Security or tax identifying number:
\n ———————<\/p>\n
93<\/p>\n
EXHIBIT E<\/p>\n
PROTECTED PARTNERS AND PROTECTED AMOUNTS<\/p>\n
\n
\nPART I PROTECTED PARTNERS PROTECTED AMOUNT
\n————————- —————-<\/p>\nPART II PROTECTED PARTNERS
\n————————–<\/p>\n
<\/c><\/s><\/table>\n
(1) Protected Amount is the Deficit Obligation or Indemnity Obligation, as
\n applicable, as provided in the First Prior Amendment to the Original
\n Partnership Agreement, as set forth in Exhibit E-1.<\/p>\n
(2) Protected Amount is the Deficit Obligation or Indemnity Obligation, as
\n applicable, as provided in the Second Prior Amendment to the Original
\n Partnership Agreement, as set forth in Exhibit E-2.<\/p>\n
(3) Protected Amount is the DRO Amount or any applicable Partner Contribution
\n Amount, as defined in the Third Prior Amendment to the Original Partnership
\n Agreement, as set forth in Exhibit E-3.<\/p>\n
(4) Protected Amount is the Deficit Obligation as defined in the Prior Addendum,
\n dated April 21, 1998, to the Original Partnership Agreement, as set forth in
\n Exhibit E-4.<\/p>\n
(5) Protected Amount is as defined in the Tenth Prior Amendment to the Original
\n Partnership Agreement, as set forth in Exhibit E-5.<\/p>\n
(6) Protected Amount is as provided for in Exhibit E-6.<\/p>\n
94<\/p>\n
EXHIBIT E-1<\/p>\n
(CAP AGREEMENT)<\/p>\n
BACKGROUND<\/p>\n
On September 2, 1997, pursuant to a closing under that certain
\nAgreement for Contribution of Real Estate and Related Property dated as of
\nAugust 1, 1997, by and among the Partnership, the General Partner, Columbus
\nAmerica Properties, L.L.C. (“CAP”), and certain members of CAP (the
\n“Contribution Agreement”), CAP received 1,690,000 Class A Units, subject to
\nadjustment as provided in the Contribution Agreement, (referred to as the “CAP
\nUnits”), in exchange for the office properties known as Texaco Center, LL&E
\nTower and 601 Tchoupitoulas Garage (collectively, the “CAP Properties”). In
\nconnection with the issuance of the CAP Units, the First Prior Amendment to the
\nOriginal Partnership Agreement was executed, which set forth specific agreements
\nregarding certain additional rights and obligations of CAP and which was later
\namended by the Sixth Prior Amendment to the Original Partnership Agreement. Such
\nspecific agreements are described below.<\/p>\n
All capitalized terms used in this Exhibit E-1 and not otherwise
\ndefined have the meanings assigned in the Agreement.<\/p>\n
SPECIFIC AGREEMENTS<\/p>\n
1. Notwithstanding any other provision in the Agreement to the
\ncontrary and in addition to (and not in lieu thereof) any and all other rights
\nof CAP under the Agreement:<\/p>\n
(i) The holders of the CAP Units shall have the
\nright at any time and from time to time, to exchange all or any number of such
\nCAP Units at the request of such holder for Shares in the form required in
\nSection 8.6.B(i) of the Agreement, but subject in all respects to the terms of
\na certain Registration Rights Agreement dated as of September 2, 1997, by and
\namong the General Partner, CAP and the other signatories thereto; and<\/p>\n
(ii) CAP shall have the right, exercisable upon written
\nnotice to Partnership at any time and from time to time before the earlier to
\noccur of (a) September 3, 2000, or (b) the date that CAP shall have either
\ntransferred or converted all of its CAP Units into Shares, to require the
\nPartnership or the General Partner to acquire all, or any portion or portions,
\nof the CAP Units at $29.00 per CAP Unit. The price for such CAP Units shall be
\npaid by the Partnership or the General Partner in immediately available funds
\nnot less than five (5) days after receipt of such notice from CAP. The CAP
\nUnits shall be conveyed to the Partnership or the General Partner, as
\napplicable, free and clear of all liens and encumbrances, other than those
\nliens and encumbrances, if any, in favor of General Partner or Partnership. At
\nthe closing of the acquisition of the CAP Units by the Partnership or the
\nGeneral Partner, the parties shall execute instruments of assignment and
\nconveyance in the form attached to the First Prior Amendment at “Exhibit B” and
\nan amendment to the Agreement evidencing the assignment of the CAP Units to the<\/p>\n
95<\/p>\n
Partnership, or the General Partner, as applicable, and the withdrawal of CAP
\nas a Limited Partner of the Partnership.<\/p>\n
2. Notwithstanding any other provision of the First Prior
\nAmendment (as amended by the Sixth Prior Amendment) or the Agreement to the
\ncontrary, upon liquidation of the Partnership, CAP shall be required to
\ncontribute to the Partnership the deficit balance in its Capital Account
\ncomputed in accordance with Section 1.752-2(b)(1) and (2) of the Regulations,
\nprovided, however, that such contribution obligation shall not exceed
\n$84,350,000 (the “Deficit Obligation”). CAP specifically waives any right of
\ncontribution or subrogation with respect to such Deficit Obligation and neither
\nthe General Partner nor any other Partner or other Person shall be required to
\nreimburse CAP for such contribution. Irrespective of the balance in the Capital
\nAccount of CAP, CAP agrees to indemnify the Partnership and the General Partner
\nto the extent that the recourse obligations of the Partnership exceed the assets
\nof the Partnership available to satisfy such recourse obligations. This
\nindemnity obligation is intended to protect and hold the Partnership and the
\nGeneral Partner harmless for such recourse obligations without regard to
\nobligations imposed on the General Partner under applicable state law or other
\ncontract provisions. This indemnity obligation shall be limited to $84,350,000
\n(the “Indemnity Obligation”). CAP hereby specifically waives any right of
\ncontribution from or subrogation against the General Partner or any other
\nPartner and neither the Partnership nor any other Partner shall be required to
\ncontribute to or otherwise reimburse CAP with respect to such indemnity. Upon
\npayment of such indemnity, CAP’s Capital Account shall be credited with such
\npayment only to the extent of any deficit in such Capital Account. Amounts paid
\nto the Partnership pursuant to the Deficit Obligation or the Indemnity
\nObligation shall be used to satisfy the recourse obligations of the Partnership.<\/p>\n
CAP’s Deficit Obligation and Indemnity Obligation shall not in
\nthe aggregate exceed $84,350,000 (subject to reduction as provided herein). In
\naddition, the Deficit Obligation and the Indemnity Obligation shall be forever
\nreduced to $6,350,000 immediately upon the first placing, after acquisition of
\nthe CAP Properties by the Partnership, of a non-recourse third party mortgage on
\nthe CAP Properties securing a third party non-recourse loan to the Partnership
\nin an amount not less than $78,000,000.<\/p>\n
Upon the sale, redemption, conversion or other disposition of the
\nCAP Units, the Deficit Obligation and the Indemnity Obligation of CAP under this
\nprovision shall terminate proportionately with the number of CAP Units sold,
\nredeemed, converted or otherwise disposed of; provided, however, that a
\ntransferee of CAP may, in its sole discretion, assume the Deficit Obligation
\nand\/or the Indemnity Obligation of CAP and, in such event, the Deficit
\nObligation and the Indemnity Obligation shall be the obligations solely of such
\ntransferee (but CAP’s obligation shall in all events be proportionately
\nterminated as of the date of any such disposition of its interest in the
\nPartnership). Nothing in this paragraph 2 shall in any way affect the sale,
\nexchange, or conversion rights of CAP under the Agreement or under the First and
\nSixth Prior Amendments.<\/p>\n
E-1 – 2
\n 96<\/p>\n
EXHIBIT E-2<\/p>\n
(1120 AGREEMENT)<\/p>\n
BACKGROUND<\/p>\n
On October 16, 1997, pursuant to a closing under that certain
\nContribution Agreement dated September 4, 1997, as amended, by and between the
\nPartnership and 1120 20th Street Associates (“1120”) (the “Contribution
\nAgreement”), 1120 received 1,645,885 Class A Units, subject to adjustment as
\nprovided in the Contribution Agreement, (referred to as the “1120 Units”) in
\nexchange for the office property known as One Lafayette Centre, 1120 20th
\nStreet, N.W., Washington, D.C. (the “1120 Property”). In connection with the
\nissuance of the 1120 Units, the Second Prior Amendment to the Original
\nPartnership Agreement, which set forth specific agreements regarding certain
\nadditional rights and obligations of 1120, was executed. Such specific
\nagreements are described below.<\/p>\n
All capitalized terms used in this Exhibit E-2 and not otherwise
\ndefined herein have the meanings assigned in the Agreement.<\/p>\n
SPECIFIC AGREEMENTS<\/p>\n
Notwithstanding any other provision of the Agreement to the
\ncontrary, upon liquidation of the Partnership, 1120 shall be required to
\ncontribute to the Partnership the deficit balance in its Capital Account
\ncomputed in accordance with Sections 1.752-2(b)(1) and (2) of the Regulations;
\nprovided, however, that such contribution obligation shall not exceed
\n$14,000,000 (the “Deficit Obligation”). 1120 specifically waives any right of
\ncontribution or subrogation with respect to such Deficit Obligation and neither
\nthe General Partner nor any other Partner or other Person shall be required to
\nreimburse 1120 for such contribution. Irrespective of the balance in the Capital
\nAccount of 1120, 1120 agrees to indemnify the Partnership and the General
\nPartner to the extent that the recourse obligations of the Partnership exceed
\nthe assets of the Partnership available to satisfy such recourse obligations.
\nThis indemnity obligation is intended to protect and hold the Partnership and
\nthe General Partner harmless for such recourse obligations without regard to
\nobligations imposed on the General Partner under applicable state law or other
\ncontract provisions. This indemnity obligation shall be limited to $14,000,000
\n(the “Indemnity Obligation”). 1120 specifically waives any right of contribution
\nfrom or subrogation against the General Partner or any other Partner and neither
\nthe Partnership nor any other Partner shall be required to contribute to or
\notherwise reimburse 1120 with respect to such indemnity. Upon payment of such
\nindemnity, 1120’s Capital Amount shall be credited with such payment only to the
\nextent of any deficit in such Capital Account. Amounts paid to the Partnership
\npursuant to the Deficit Obligation or the Indemnity Obligation shall be used to
\nsatisfy the recourse obligations of the Partnership.<\/p>\n
Upon the sale, redemption, conversion or other disposition of the
\n1120 Units, the Deficit Obligation and the Indemnity Obligation of 1120 under
\nthis provision shall terminate; provided, however, a transferee of 1120 may, in
\nits sole discretion, assume the Deficit Obligation and\/or the Indemnity
\nObligation of 1120 and, in such event, the Deficit<\/p>\n
97<\/p>\n
Obligation and the Indemnity Obligation shall be the obligation solely of such
\ntransferee (but 1120’s obligation shall in all events be terminated as of the
\ndate of any disposition of its interest in the Partnership). Nothing herein
\nshall in any way effect the sale, exchange or conversion rights of 1120 under
\nthe Agreement or under the Second Prior Amendment.<\/p>\n
E-2 – 2<\/p>\n
98
\n EXHIBIT E-3<\/p>\n
(WRIGHT RUNSTAD AGREEMENT)<\/p>\n
BACKGROUND<\/p>\n
On December 16, 1997, (i) pursuant to a closing under that
\ncertain Contribution Agreement dated December 16, 1997, by and between the
\nPartnership, WRAM (as defined below), WRH (as defined below) and certain other
\nparties (the “Contribution Agreement”) (a) Wright Runstad Asset Management
\nL.P., a Washington limited partnership (“WRAM”), received 446,890 Class B Units
\nin exchange for certain partnership interests (“Titleholder Interests”) in
\nWright Runstad Properties L.P., a Delaware limited partnership (the
\n“Titleholder”) and (b) Wright Runstad Holdings L.P., a Washington limited
\npartnership (“WRH”), received 2,168,810 Class B Units in exchange for certain
\nTitleholder Interests; and (ii) pursuant to a closing under that certain
\nInvestment Agreement dated December 16, 1997, by and among the Partnership,
\nWright Runstad Associates Limited Partnership, a Washington limited
\npartnership, (“WRALP”), H. Jon Runstad (“Runstad”), Douglas E. Norberg
\n(“Norberg”), John F. Nordby (“Nordby”), and certain other parties (the
\n“Investment Agreement”), Runstad, Norberg, and Nordby received, in the
\naggregate, 137,427 Class B Units in exchange for certain limited partnership
\ninterests in WRALP (“WRALP Interests”). WRAM and WRH are collectively referred
\nto herein as the “Contributors.” Runstad, Norberg, Nordby are collectively
\nreferred to herein as the “Principals.” The Class B Units issued as described
\nabove are referred to herein as the WRP Units. Certain property owned by the
\nTitleholder as described in the Contribution Agreement is referred to herein as
\nthe “WRP Property.” In connection with the issuance of the WRP Units, the Third
\nPrior Amendment to the Original Partnership Agreement, which set forth specific
\nagreements regarding certain additional rights and obligations of the
\nContributors and the Principals, was executed. Such specific agreements are
\ndescribed below.<\/p>\n
All capitalized terms used in this Exhibit E-3 and not otherwise
\ndefined shall have the meanings assigned to them in the Agreement.<\/p>\n
SPECIFIC AGREEMENTS<\/p>\n
1. Right to Assign. Notwithstanding any other provision of this
\nAgreement or of the Third Prior Amendment, each Contributor shall have the
\nright to assign all or any portion of its WRP Units, together with any and all
\nother rights of such Contributor pursuant to the Third Prior Amendment and the
\nAgreement, to one or more of the constituent partners or shareholders, members,
\npartners, or beneficiaries of constituent partners of such Contributor on
\nDecember 16, 1997, without the need for the consent of the General Partner or
\nany Limited Partner and without being subject to the right of first refusal set
\nforth in Section 11.3.A(a) of the Agreement, but in each case subject to the
\nrestrictions and conditions set forth in Sections 11.3.C, 11.3.D, 11.3.E,
\n11.6.E and 11.6.F of the Agreement. Upon the delivery of written notice of such
\nan assignment to the General Partner, each assignee of WRP Units pursuant to
\nthe immediately preceding sentence shall be admitted to the Partnership as a
\nSubstituted Limited Partner owning the
\n 99<\/p>\n
WRP Units so assigned and having all of the rights of a Limited Partner under
\nthe Agreement and the Third Prior Amendment, subject only to such assignee
\nexecuting and delivering to the Partnership an acceptance of all of the terms
\nand conditions of the Agreement and such other documents or instruments as the
\nGeneral Partner may reasonably require to effect such admission, in accordance
\nwith Section 11.4.B of the Agreement. Each permitted assignee of any of the WRP
\nUnits issued to a Contributor pursuant to the Contribution Agreement that is
\nadmitted as a Substituted Limited Partner in accordance with this Section 1 or
\nArticle XI of the Agreement, for so long as such Person owns any such WRP Units,
\nis referred to herein as a “Contributor Limited Partner.” Upon satisfaction of
\nthe condition described in the second sentence of this Section 1, the General
\nPartner shall amend Exhibit A to the Agreement in the manner described in
\nSection 11.4.C of the Agreement. For purposes of Section 8.6 of the Agreement,
\neach Contributor Limited Partner which is a permitted assignee of a Contributor
\nshall be entitled to exercise its right to require the Partnership to redeem all
\nor any portion of the WRP Units assigned to it by such Contributor at any time.<\/p>\n
2. Adjustments to Carrying Values.<\/p>\n
(a) Upon the admission of the Contributors and the
\n Principals to the Partnership and upon the distribution by the
\n Partnership of the Cash Amount to either Contributor or to any
\n Principal or any Contributor Limited Partner pursuant to the exercise
\n of the Redemption Right with respect to the WRP Units held by such
\n Contributor, Principal or Contributor Limited Partner, the Carrying
\n Values of the Assets of the Partnership shall be adjusted in accordance
\n with the procedures described in Section 1.D of Exhibit B to the
\n Agreement; provided, however, that in order to minimize the
\n administrative burden associated with the adjustments required by this
\n Section 2(a) in connection with the distribution of the Cash Amount to
\n a Contributor, a Principal or a Contributor Limited Partner, the
\n Partnership shall make the adjustments to the Carrying Values of the
\n Partnership’s Assets (and the resulting adjustments to the Capital
\n Accounts of the Partners) only upon the happening of the most material
\n event during the calendar year that is described in Section 1.D(2) of
\n Exhibit B to the Agreement (the “Annual Adjustment”); and provided,
\n further, that upon the distribution of the Cash Amount to a
\n Contributor, a Principal or a Contributor Limited Partner or, at the
\n option of the General Partner, upon the occurrence of any other event
\n described in Section 1.D(2) of Exhibit B to the Agreement, that occurs
\n during any year other than as of the date of the Annual Adjustment, the
\n Partnership shall, at the time of such distribution, make adjustments
\n to the Carrying Values of the Partnership’s Assets in accordance with
\n the procedures described in Section 1.D of Exhibit B to the Agreement
\n for purposes of adjusting the Capital Account of such Contributor, such
\n Principal or such Contributor Limited Partner who has exercised his
\n Redemption Right or such other affected Partner, but no such
\n adjustments shall be necessary at such time with respect to the Capital
\n Account balances of Partners who remain Partners through the date of
\n the Annual Adjustment or are otherwise not directly affected by any
\n such other event.<\/p>\n
(b) Any determination of the fair market value of
\n Partnership assets pursuant to Section 1.D of Exhibit B to the
\n Agreement (for purposes of <\/p>\n
E-3-2
\n 100<\/p>\n
calculating Unrealized Gain or Unrealized Loss), with respect
\n to adjusting the Carrying Values of Partnership assets in connection
\n with the exercise of Redemption Rights by a Contributor, any Principal
\n or any Contributor Limited Partner shall be made by assuming that the
\n aggregate fair market value of all Partnership assets is equal to the
\n aggregate Cash Amount that would be distributed by the Partnership if
\n all Partnership Units held by all Partners (including the General
\n Partner) were redeemed in exchange for the Cash Amount with respect to
\n each such Partnership Unit at such time, provided, however, such
\n valuation methodology shall not be utilized for purposes of determining
\n the fair market value of the Partnership’s assets with respect to any
\n such exercise of Redemption Rights in contemplation of an assignment by
\n or reorganization of the Partnership for the benefit of creditors and
\n any liquidation of the Partnership related thereto or following the
\n filing by (or in contemplation of a filing) by the Partnership of a case
\n under Title 11 of the U.S. Code.<\/p>\n
3. Allocations. Notwithstanding the provisions of Section 2.C of
\nExhibit C to the Agreement, for purposes of allocating items of income, gain,
\nloss and deduction with respect to the WRP Property in the manner required by
\nSection 704(c) of the Code, the Partnership shall employ, and shall cause any
\nentity controlled by the Partnership which holds title to any of the WRP
\nProperty to employ, the “traditional method” as set forth in Regulation Section
\n1.704-3(b).<\/p>\n
4. Obligation to Restore Deficit Capital Account.<\/p>\n
(a) For purposes of this Section 4, the following terms
\n shall have the meanings set forth below:<\/p>\n
(i) “DRO Amount” means (A) with
\n respect to WRAM, $10,873,678, (B) with respect to WRH,
\n $63,014,285 and (C) with respect to each Scheduled Assignee, the
\n amount set forth opposite such Scheduled Assignee’s name on
\n Schedule 1 hereto.<\/p>\n
(ii) “Partner Contribution Agreement”
\n means one or more agreements in favor of that certain
\n partnership or those certain partnerships that are partners in
\n WRH, which were executed concurrently with the Third Prior
\n Amendment and have been assigned by such partnerships to WRH,
\n pursuant to which a Second-Tier Partner has agreed to make
\n certain capital contributions to WRH on the terms and subject to
\n the conditions set forth in such Partner Contribution Agreement.<\/p>\n
(iii) “Partner Contribution Amount”
\n means, with respect to each Second-Tier Partner, the amount set
\n forth opposite such Second-Tier Partner’s name on Schedule 1
\n hereto, which amount is the amount of capital contributions
\n agreed to be made by such Second-Tier Partner pursuant to the
\n Partner Contribution Agreement to which he is a party.<\/p>\n
E-3-3
\n 101<\/p>\n
(iv) “Scheduled Assignee” means
\n each permitted assignee of any of the WRP Units of either WRAM
\n or WRH listed on Schedule 1 hereto and the successors and
\n assigns of such Scheduled Assignee.<\/p>\n
(v) “Second-Tier Partners” means those
\n persons listed on Schedule 1 to the Third Prior Amendment who
\n are partners in certain general partnerships that are partners
\n in WRH and who have executed and delivered one or more Partner
\n Contribution Agreements.<\/p>\n
(b) Notwithstanding any other provisions of
\n the Agreement, upon liquidation of the Partnership or upon the
\n liquidation of the Partnership Interest of a Contributor or a Scheduled
\n Assignee, each Contributor or Scheduled Assignee whose interest is
\n being liquidated shall contribute to the Partnership, in accordance
\n with Section 1.704-1(b)(2)(ii)(b)(2) of the Regulations, the deficit
\n balance, if any, in its Capital Account, calculated after the
\n allocation for such year of all items of Net Income, Net Losses, Gross
\n Income and Unrealized Gain or Unrealized Loss allocated in accordance
\n with Section 1.D of Exhibit B to the Agreement; provided, however, that
\n in no event shall such contribution obligation for any Contributor or
\n Scheduled Assignee exceed such Contributor’s or Scheduled Assignee’s
\n DRO Amount. In addition, WRH assigned and conveyed to the Partnership,
\n effective upon distribution of the WRP Units by WRH, all of WRH’s
\n rights under each Partner Contribution Agreement provided by a
\n Second-Tier Partner; provided that in no event shall the contribution
\n obligation pursuant to such Partner Contribution Agreement exceed such
\n Second-Tier Partner’s Partner Contribution Amount. The obligation
\n pursuant to this Section 4(b) shall be for the benefit of the
\n Partnership, the General Partner, the creditors of the Partnership or
\n any other person to whom any debts, liabilities or obligations are owed
\n by (or who otherwise has any claim against) the Partnership or the
\n General Partner in its capacity as the general partner of the
\n Partnership and shall be enforceable by such parties. Each Contributor
\n and Scheduled Assignee unconditionally and irrevocably waives any
\n subrogation, reimbursement or similar rights to which it might
\n otherwise be entitled as the result of its performance with respect to
\n the obligation created pursuant to Section 4(b), whether such rights
\n arise with respect to the Partnership, another Partner, or a third
\n party; provided, however, that the General Partner shall in all events
\n be entitled to enforce the contribution obligation of a Contributor or
\n Scheduled Assignee undertaken pursuant to Section 4(b).<\/p>\n
(c) Notwithstanding the foregoing, in the
\n event that the General Partner, pursuant to Section 8.6.B of the
\n Agreement, elects to assume directly and satisfy a Redemption Right
\n exercised by a Contributor or a Scheduled Assignee (a “Tendering
\n Limited Partner”), the General Partner shall assume the obligation of
\n the Tendering Limited Partner pursuant to Section 4(b) above with
\n respect to the WRP Units transferred to the General Partner by such
\n Tendering Limited Partner; provided, however, that if the adjustment to
\n the Carrying Values of Partnership Assets and the related adjustments
\n to the Capital Accounts of the Partners pursuant to Section 2 hereof
\n and Section 1.D of Exhibit B to the Agreement that would have been
\n undertaken pursuant to Section 2 hereof had the <\/p>\n
E-3-4
\n 102<\/p>\n
Partnership satisfied the Redemption Right exercised by such Tendering
\n Limited Partner would have resulted in the Capital Account of the
\n Tendering Limited Partner having a zero or positive balance, then, with
\n respect to such WRP Units acquired from the Tendering Limited Partner,
\n the General Partner shall have no obligation pursuant to Section 4(b)
\n hereof with respect to a liquidation of the Partnership or a liquidation
\n of the Partnership Interest reflected by such WRP Units that occurs more
\n than twelve months following the acquisition of such WRP Units by the
\n General Partner.<\/p>\n
(d) In the event that the liquidation of
\n the Partnership Interest of a Tendering Limited Partner, other than in
\n connection with the liquidation of the Partnership, would trigger an
\n obligation pursuant to Section 4(b) hereof to contribute an amount to
\n the Partnership, then the Net Income of the Partnership for the portion
\n of such year ending on the Specified Redemption Date with respect to
\n such Tendering Limited Partner shall be specially allocated to such
\n Tendering Limited Partner in the amount necessary to eliminate the
\n deficit balance in its Capital Account remaining after all other
\n adjustments for such year (including any adjustments made pursuant to
\n Section 1.D of Exhibit B to the Agreement).<\/p>\n
5. Maintenance of Recourse Debt. The Partnership shall maintain
\nunsecured liabilities as to which the creditor has recourse to the General
\nPartner, including any such unsecured recourse liabilities (as to which the
\ncreditor has recourse to the General Partner in its capacity as General
\nPartner) of any other entity that is allocable to the Partnership, in an
\naggregate amount not less than the amount necessary such that: (a) prior to the
\ndistribution by WRAM and WRH of WRP Units issued to them pursuant to the
\nContribution Agreement, the amount of Partnership recourse liabilities
\nallocated to each of WRAM and WRH shall be not less than its DRO Amount; and
\n(b) following the distribution by WRAM and WRH of WRP Units issued to them
\npursuant to the Contribution Agreement, the amount of Partnership recourse
\nliabilities allocated directly or indirectly to all Scheduled Assignees and
\nSecond-Tier Partners shall be not less than the sum of their respective DRO
\nAmounts and Partner Contribution Amounts. In making such determination, the
\nPartnership shall take into account any and all allocations of Partnership
\nrecourse liabilities to other Partners by reason of any guarantees,
\nindemnities, restoration obligations or other, similar arrangements with
\nrespect to any such Partners, and the liability by reason of any such Partner’s
\nstatus as a general partner of the Partnership.<\/p>\n
6. Amendments. Notwithstanding any provision in the Agreement to
\nthe contrary, the provisions hereof and of the Third Prior Amendment may be
\nwaived or amended or otherwise modified with the prior written consent of
\nholders of more than fifty percent (50%) of the WRP Units at the time
\noutstanding and without the consent of any other Limited Partner.<\/p>\n
E-3-5
\n 103<\/p>\n
SCHEDULE 1<\/p>\n
SCHEDULED ASSIGNEES AND SECOND-TIER PARTNERS<\/p>\n
\n\n DRO Amount\/
\n Scheduled Assignees\/ Partner Contribution
\n Second-Tier Partners Amount
\n ——————– ——
\n <\/p>\n<\/c><\/s><\/caption>\n<\/table>\n
E-3-6
\n 104
\n EXHIBIT E-4<\/p>\n
(GALBREATH AGREEMENT)<\/p>\n
BACKGROUND<\/p>\n
On April 21, 1998, Galbreath-Denver Limited Partnership, an Ohio
\nlimited partnership (“Galbreath”) and 1560 Broadway Partnership, a Colorado
\ngeneral partnership (“Broadway”) (collectively the “Additional Limited
\nPartners”) each was issued 1,684 Class B Units (referred to as the “Galbreath
\nand Broadway Units”). In connection with the issuance of the Galbreath and
\nBroadway Units, a Prior Addendum dated as of April 21, 1998, to the Original
\nPartnership Agreement, which set forth specific agreements regarding certain
\nadditional rights and obligations of the Additional Limited Partners, was
\nexecuted. Such specific agreements are described below.<\/p>\n
All capitalized terms used in this Exhibit E-4 and not otherwise
\ndefined shall have the meanings assigned in the Agreement.<\/p>\n
SPECIFIC AGREEMENTS<\/p>\n
Notwithstanding any other provision of the Agreement to the
\ncontrary, upon liquidation of the Partnership, each of the Additional Partners
\nshall be required to contribute to the Partnership the deficit balance in such
\nparty’s Capital Account computed in accordance with Sections 1.752-2(b)(1) and
\n(2) of the Regulations; provided, however, that such contribution obligation
\nshall not exceed the amount by which the recourse obligations of the
\nPartnership exceed the assets of the Partnership available to satisfy such
\nrecourse obligations and shall not exceed $4,154,000 with respect to Galbreath
\nand the lesser of the deficit balance in Broadway’s Capital Account in “owner”
\nat the date of “closing” reduced by any income allocated to Broadway after the
\ndate of Closing or $10,500,000 with respect to Broadway (collectively, the
\n“Deficit Obligation”). Each of the Additional Limited Partners specifically
\nwaives any right of contribution or subrogation with respect to such Deficit
\nObligation and neither the General Partner nor any other Partner or other
\nPerson shall be required to reimburse the Additional Limited Partners for such
\ncontributions. Upon payment of such Deficit Obligation, each Additional Limited
\nPartner’s Capital Account shall be credited with such payment. Amounts paid to
\nthe Partnership pursuant to the Deficit Obligation shall be used to satisfy the
\nrecourse obligations of the Partnership.<\/p>\n
Upon the sale, redemption, conversion or other disposition of
\nthe Galbreath and Broadway Units received by any Additional Limited Partner,
\nthe Deficit Obligation of such Additional Limited Partner shall be reduced in
\nan amount equal to the percentage of the Galbreath and Broadway Units owned by
\nsuch Additional Limited Partner which were sold, redeemed, converted or
\notherwise disposed of by such Additional Limited Partner, and upon the sale,
\nredemption, conversion or other disposition of all the Galbreath and Broadway
\nUnits received by any Additional Limited Partner, the Deficit Obligation shall
\nbe terminated with respect to such Additional Limited Partner. Nothing in this
\nExhibit E-4 <\/p>\n
105<\/p>\n
shall in any way effect the sale, exchange or conversion rights of
\nthe Additional Limited Partners under the Agreement or this Exhibit E-4.<\/p>\n
In the case of Galbreath only, certain partners of Galbreath
\nshall execute and deliver to the Partnership, and the Partnership shall accept,
\na Guarantee in the form agreed to by such Galbreath partners and the
\nPartnership.<\/p>\n
E-4-2
\n 106<\/p>\n
EXHIBIT E-5<\/p>\n
(PALO ALTO SQUARE AGREEMENT)<\/p>\n
BACKGROUND<\/p>\n
Pursuant to a closing under that certain Contribution Agreement
\ndated September 28, 1999, by and between Palo Alto Square Limited Partnership,
\nan Illinois limited partnership, (“Contributor”) and the General Partner (the
\n“Contribution Agreement”), Contributor was issued 1,012,623 Class B Units
\n(referred to as the “Contributor Units”) in exchange for certain real property
\ninterests described in the Contribution Agreement (the “Property”). Contributor
\nhas assigned the Contributor Units to the Equity Holders (as defined below). In
\nconnection with the issuance of Contributor Units, the Tenth Prior Amendment to
\nthe Original Partnership Agreement, which set forth specific agreements
\nregarding certain additional rights and obligations of the Contributor and its
\nconstituent partners as set forth on Schedule 1 to such Tenth Prior Amendment
\n(the “Equity Holders”), was executed. Such specific agreements are described
\nbelow.<\/p>\n
All capitalized terms used in this Exhibit E-5 and not otherwise
\ndefined shall have the meanings assigned in the Agreement.<\/p>\n
SPECIFIC AGREEMENTS<\/p>\n
1. Right to Assign. Notwithstanding any other provision of this
\nExhibit E-5 or of the Agreement, the Equity Holders shall have the right to
\nassign all or any portion of their Contributor Units, together with any and all
\nother rights of the Equity Holders pursuant to this Exhibit E-5 or the
\nAgreement, to one or more of the constituent partners or shareholders, members,
\npartners or beneficiaries of constituent partners of the Equity Holders as of
\nOctober 1, 1999, whether direct or indirect, without the need for the consent
\nof the General Partner or Limited Partners and without being subject to the
\nright of first refusal set forth in Section 11.3.A(a) of the Agreement, but in
\neach case subject to the restrictions and conditions set forth in Sections
\n11.3.C, 11.3.D, 11.3.E, 11.6.E and 11.6.F of the Agreement. Upon the delivery
\nof written notice of such an assignment to the General Partner, each assignee
\nof Contributor Units pursuant to the immediately preceding sentence shall be
\nadmitted to the Partnership as a Substituted Limited Partner owning the
\nContributor Units so assigned and having all of the rights of a Limited Partner
\nunder the Agreement and this Exhibit E-5, subject only to such assignee
\nexecuting and delivering to the Partnership an acceptance of all of the terms
\nand conditions of the Agreement and such other documents or instruments as the
\nGeneral Partner may reasonably require to effect such admission, in accordance
\nwith Section 11.4.B of the Agreement. Each permitted assignee of any of the
\nContributor Units, issued to the Contributor pursuant to the Contribution
\nAgreement and subsequently transferred to the Equity Holders, that is admitted
\nas a Substituted Limited Partner in accordance with this Section 1 or Article
\nXI of the Agreement, for so long as such Person owns any such Contributor
\nUnits, is referred to in this Exhibit E-5 as an “Indirect Equity Holder.” Upon
\nsatisfaction of the condition described in the second sentence of this Section
\n1, the General Partner shall amend Exhibit A to the Agreement in the manner
\ndescribed in Section 11.4.C of the Agreement. For purposes of Section 8.6 of
\nthe Agreement, each Equity Holder and <\/p>\n
107<\/p>\n
Indirect Equity Holder shall be entitled to exercise its right to require the
\nPartnership to redeem all or any portion of the Contributor Units assigned to it
\nby an Equity Holder at any time on or after October 1, 1999.<\/p>\n
2. Adjustments to Carrying Values. (a) The Carrying Values of
\nthe Assets of the Partnership shall be adjusted in accordance with the
\nprocedures described in Section 1.D of Exhibit B to the Agreement; provided,
\nhowever, that in order to minimize the administrative burden associated with
\nthe adjustments required by this Section 2(a) in connection with the
\ndistribution of the Cash Amount to an Equity Holder or an Indirect Equity
\nHolder, the Partnership shall make the adjustments to the Carrying Values of
\nthe Partnership’s assets (and the resulting adjustments to the Capital Accounts
\nof the Partners) only upon the happening of the most material event during the
\ncalendar year that is described in Section 1.D(2) of Exhibit B to the Agreement
\n(the “Annual Adjustment”) and; provided further that upon the distribution of
\nthe Cash Amount to an Equity Holder or an Indirect Equity Holder or, at the
\noption of the General Partner, upon the occurrence of any other event described
\nin Section 1.D(2) of Exhibit B to the Agreement, that occurs during any year
\nother than as of the date of the Annual Adjustment, the Partnership shall, at
\nthe time of such distribution, make adjustments to the Carrying Values of the
\nPartnership’s assets in accordance with the procedures described in Section 1.D
\nof Exhibit B to the Agreement for purposes of adjusting the Capital Account of
\nan Equity Holder, or such Indirect Equity Holder who has exercised his
\nRedemption Right or such other affected Partner, but no such adjustments shall
\nbe necessary at such time with respect to the Capital Account balances of
\nPartners who remain Partners through the date of the Annual Adjustment or are
\notherwise not directly affected by any such other event.<\/p>\n
(b) Any determination of the fair market value
\nof Partnership assets pursuant to Section 1.D of Exhibit B to the Agreement
\n(for purposes of calculating Unrealized Gain or, Unrealized Loss), with respect
\nto adjusting the Carrying Values of Partnership assets in connection with the
\nexercise of Redemption Rights by an Equity Holder or any Indirect Equity Holder
\nshall be made by assuming that the aggregate fair market value of all
\nPartnership assets is equal to the aggregate Cash Amount that would be
\ndistributed by the Partnership if all Partnership Units held by all Partners
\n(including the General Partner) were redeemed in exchange for the Cash Amount
\nwith respect to each such Partnership Unit at such time, provided, however,
\nsuch valuation methodology shall not be utilized for purposes of determining
\nthe fair market value of the Partnership’s assets with respect to any such
\nexercise of Redemption Rights in contemplation of an assignment by or
\nreorganization of the Partnership for the benefit of creditors and any
\nliquidation of the Partnership related thereto or following the filing by (or
\nin contemplation of a filing) by the Partnership of a case under Title 11 of
\nthe U.S. Code.<\/p>\n
3. Allocations. Notwithstanding the provisions of Section 2.C of
\nExhibit C to the Agreement, for purposes of allocating, items of income, gain,
\nloss and deduction with respect to the Property in the manner required by
\nSection 704(c) of the Code, the Partnership shall employ, and shall cause any
\nentity controlled by the Partnership which holds title to any of the Property
\nto employ the “traditional method” as set forth in Regulation Section
\n1.704-3(b).<\/p>\n
E-5-2
\n 108<\/p>\n
4. Obligation to Restore Deficit Capital Accounts. (a)
\nFor purposes of this Section 4, the following terms shall have the meanings set
\nforth below:<\/p>\n
(i) “Protected Amount” means, with respect
\n to any Protected Partner, an amount equal to (i) the
\n taxable gain, if any, that would be realized by such
\n Protected Partner if such Partner were to dispose of its
\n Partnership Interests for no consideration other than the
\n release or deemed release of liabilities of the
\n Partnership assumed by or otherwise allocable to such
\n Partner under Code Section 752, as such hypothetical gain
\n is determined from time to time, less (ii) such Partner’s
\n share of “qualified nonrecourse financing” as defined in
\n Code Section 465(b)(6) and the Regulations thereunder, as
\n such share is determined from time to time in accordance
\n with Regulations Section 1.752-3(a). The Protected Amount
\n allocable to any Protected Partner may be modified from
\n time to time by an amendment to the Agreement or by
\n execution of a written instrument by and between such
\n Protected Partner and the General Partner, acting on
\n behalf of the Partnership and without the prior written
\n consent of any other Partner (whether or not Protected
\n Partners).<\/p>\n
(ii) “Protected Partner(s)” means that or
\n those Limited Partner(s) designated as Protected
\n Partner(s) on Exhibit A attached to the Tenth Prior
\n Amendment, as such designation may be modified from time
\n to time by the General Partner, whether by express
\n amendment to the Agreement or by execution of a written
\n instrument by and between any Protected Partner(s) and
\n the General Partner, acting on behalf of the Partnership
\n and without the prior consent of other Limited Partners
\n (whether or not Protected Partners). For purposes hereof,
\n any successor, assignee, or transferee of Partnership
\n Interests from a Protected Partner, which successor,
\n assignee or transferee determines its basis in such Units
\n by reference to the basis of the predecessor, assignor or
\n transferor Protected Partner, shall be considered a
\n Protected Partner.<\/p>\n
(b) Notwithstanding any provision of the Partnership Agreement
\nto the contrary (including, without limitation, the second sentence of Section
\n13.3 of the Partnership Agreement), upon liquidation of the Partnership or upon
\nthe liquidation of the Partnership Interest of a Protected Partner, such
\nProtected Partner whose interest is being liquidated shall contribute to the
\nPartnership in accordance with Treasury Regulation Section
\n1.704-1(b)(2)(ii)(b)(2), the deficit balance, if any, in its Capital Account,
\ncalculated after the allocation for such year of all items of Net Income, Net
\nLosses, Gross Income and Unrealized Gain or Unrealized Loss allocated in
\naccordance with Section 6.1 of the Agreement, Section 1.D of Exhibit B to the
\nAgreement, provided, however, that in no event shall such contribution
\nobligation for any Protected Partner exceed such Protected Partner’s Protected
\nAmount. The obligation created pursuant to this Section 4(b) shall be for the
\nbenefit of the Partnership, the General Partner, the creditors of the
\nPartnership or any other person to whom any debts, liabilities or obligations
\nare owed by (or who otherwise has any claim against) the Partnership or the
\nGeneral Partner in its capacity as <\/p>\n
E-5-3
\n 109<\/p>\n
general partner of the Partnership and shall be enforceable by such parties.
\nEach Protected Partner unconditionally and irrevocably waives any subrogation,
\nreimbursement or similar rights to which it might otherwise be entitled as the
\nresult of its performance with respect to the obligation pursuant to this
\nSection 4(b), whether such rights arise with respect to the Partnership, another
\nPartner of the Partnership or a third party; provided, however, that the General
\nPartner shall in all events be entitled to enforce the contribution obligation
\nof a Protected Partner undertaken pursuant to Section 4(b). Notwithstanding
\nanything herein to the contrary, the obligation of a Protected Partner to
\ncontribute amounts pursuant to this paragraph shall continue in full force and
\neffect in accordance with the terms hereof until one year following the transfer
\nor other disposition by such Protected Partner of its Partnership Interests
\nunless the Partnership and such Protected Partner agree otherwise. Unless
\nexpressly agreed by the Partnership and the affected holders of Contributor
\nUnits to the contrary in this or any other agreement, no holder of Contributor
\nUnits who is not a Protected Partner shall have any obligation to contribute
\namounts to the Partnership.<\/p>\n
5. Amendments. Notwithstanding any provision in the Agreement to
\nthe contrary, the provisions of the Tenth Prior Amendment may be waived or
\namended or otherwise modified with the prior written consent of holders (being
\neither the Equity Holders and\/or the Indirect Equity Holders) of more than
\nseventy-five percent (75%) of the Contributor Units at the time outstanding and
\nwithout the consent of any other Limited Partner.<\/p>\n
E-5-4
\n 110<\/p>\n
EXHIBIT E-6<\/p>\n
(CORNERSTONE AGREEMENT)<\/p>\n
BACKGROUND<\/p>\n
In connection with the closing of the merger of Cornerstone
\nProperties Limited Partnership (“Cornerstone Partnership”) with and into the
\nPartnership on June 19, 2000, (the “Cornerstone Merger”) pursuant to the
\nAgreement and Plan of Merger, dated as of February 11, 2000, as amended, among
\nthe General Partner, the Partnership, Cornerstone Properties Inc. and
\nCornerstone Partnership (the “Merger Agreement”), certain former limited
\npartners of Cornerstone Partnership who became Limited Partners as a result of
\nthe Cornerstone Merger (referred to as “Former Cornerstone Limited Partners”)
\nhave elected to become Protected Partners and, as a group, the Former
\nCornerstone Limited Partners have been given the right to increase their
\nProtected Amount after the closing of the Cornerstone Merger, subject to a
\nspecified aggregate dollar limitation. In addition, the Partnership and
\nCornerstone Partnership entered into certain other agreements with respect to
\ntax matters that affect the Former Cornerstone Limited Partners. The specific
\nagreements between the Partnership and Cornerstone Partnership with respect to
\nthese various matters are described below.<\/p>\n
All capitalized terms used and not otherwise defined in this
\nExhibit E-6 shall have the meanings assigned in the Agreement.<\/p>\n
SPECIFIC AGREEMENTS<\/p>\n
1. Election by Certain Former Cornerstone Limited Partners to
\nUndertake Deficit Restoration Obligation. Each Former Cornerstone Limited
\nPartner who, prior to the closing of the Cornerstone Merger, had entered into
\nan agreement with Cornerstone Partnership to bear the economic risk of loss as
\nto a portion of Cornerstone Partnership’s recourse indebtedness by undertaking
\nthe obligation to restore a portion of its negative capital account balance
\nupon liquidation of such Former Cornerstone Limited Partner’s interest in
\nCornerstone Partnership was given the opportunity to become a Protected Partner
\nwith a Protected Amount in an amount equal to the maximum amount such Former
\nCornerstone Limited Partner was obligated to restore to Cornerstone Partnership
\nimmediately prior to the closing of the Cornerstone Merger; provided, however,
\nthat except as set forth in Paragraphs 2 and 3, below, no Former Cornerstone
\nLimited Partner has the right to increase its Protected Amount following the
\nCornerstone Merger. The Former Cornerstone Limited Partners who have elected to
\nbecome Protected Partners under such provision of the Merger Agreement, along
\nwith their specified Protected Amounts as of the closing of the Cornerstone
\nMerger, are set forth on Schedule 1 to this Exhibit E-6. Each such election by
\na Former Cornerstone Limited Partner shall become effective upon the later of
\nreceipt thereof by the General Partner or the “effective time” of the merger of
\nCornerstone Partnership into the Partnership. Upon becoming effective, each
\nsuch election by a Former Cornerstone Limited Partner pursuant to this Section
\n1 or any other provision of this Exhibit E-6 shall be irrevocable, cannot be
\nreduced, and shall be binding upon successive transferees of the Former
\nCornerstone Limited Partners, except as provided in Section 13.3.D of the
\nAgreement.<\/p>\n
111<\/p>\n
2. Election by Former Cornerstone Limited Partners to Increase
\nProtected Amount. Notwithstanding the proviso in Paragraph 1, above, Former
\nCornerstone Limited Partners may, at any time following the Cornerstone Merger,
\nelect to become Protected Partners and\/or increase their Protected Amounts (as
\ndetermined immediately prior to the Cornerstone Merger), as a group, by an
\naggregate amount of up to $50 million, reduced by the amount of any increases
\nto the amounts that such former limited partners of Cornerstone Partnership
\nwere obligated to restore to Cornerstone Partnership that occurred during the
\nperiod commencing on February 11, 2000, and ending at the closing of the
\nCornerstone Merger.<\/p>\n
3. Effect of Other Agreements With Former Cornerstone Limited
\nPartners. Pursuant to the Merger Agreement, the General Partner, the
\nPartnership, Cornerstone Properies Inc. and Cornerstone Partnership entered
\ninto an Assignment and Assumption Agreement, dated as of June 19, 2000,
\npursuant to which the Partnership assumed certain obligations of Cornerstone
\nPartnership made pursuant to certain tax protection agreements (the
\n“Cornerstone Tax Protection Agreements”) described on Schedule A to such
\nAssignment and Assumption Agreement, a copy of which is attached as Schedule 2
\nto this Exhibit E-6. To the extent that the Cornerstone Tax Protection
\nAgreements included a right to enter into deficit restoration obligations with
\nrespect to Cornerstone Partnership, such Former Cornerstone Limited Partners
\nwho are beneficiaries of such Cornerstone Tax Protection Agreements are
\nProtected Partners and have Protected Amounts as provided in the Cornerstone
\nTax Protection Agreements. Notwithstanding the limitations in Paragraphs 1 and
\n2 above, the Protected Partners who are beneficiaries of the Cornerstone Tax
\nProtection Agreements shall have the right to increase their Protected Amounts
\nif and to the extent provided in the applicable Cornerstone Tax Protection
\nAgreement and the amount of any such increase shall not be taken into account
\nin applying the limitation in Paragraph 2. The Cornerstone Tax Protection
\nAgreements pursuant to which certain Former Cornerstone Limited Partners have
\nthe right to become Protected Partners or to increase their specified Protected
\nAmounts (subject to the limitations noted therein) are listed on Schedule 3 to
\nthis Exhibit E-6.<\/p>\n
4. Request to Increase Amount of Deficit Restoration Obligation.
\nThe Partnership shall consider in good faith a request from a Former
\nCornerstone Limited Partner to become a Protected Partner and\/or to increase
\nits Protected Amount, as applicable, from time to time after the Cornerstone
\nMerger if such Former Cornerstone Limited Partner shall provide information
\nfrom its professional tax advisor satisfactory to the Partnership showing that,
\nin the absence of such increased Protected Amount, such Limited Partner likely
\nwould not be allocated from the Partnership sufficient indebtedness under
\nSection 752 of the Code and the at-risk provisions under Section 465 of the
\nCode to avoid the recognition of gain (other than gain required to be
\nrecognized by reason of actual cash distributions from the Partnership). The
\nPartnership and its professional tax advisors shall cooperate in good faith
\nwith such Former Cornerstone Limited Partner and its professional tax advisor
\nto provide such information regarding the allocation of the Partnership
\nliabilities and the nature of such liabilities as is reasonably necessary in
\norder to determine the Former Cornerstone Limited Partner’s adjusted tax basis
\nin its Partnership Interest and at-risk amount. In deciding whether or not to
\ngrant such a request, the Partnership shall be entitled to take into account
\nall factors related to the Partnership, including, without limitation, the
\nexisting and anticipated debt structure of <\/p>\n
E-6-2
\n 112<\/p>\n
the Partnership, the tax situations of all other Partners, including the General
\nPartner (individually and as a group), and the effect that granting such a
\nrequest might have on their tax situation, and the anticipated long-term
\nbusiness needs of the Partnership. The Partnership’s only obligation with
\nrespect to any such request from a Former Cornerstone Limited Partner pursuant
\nto this Paragraph 4 shall be to act in good faith. In the event the Partnership
\nfails to act in good faith with respect to any such request, the exclusive
\nremedy of the Former Cornerstone Limited Partner who made such request shall be
\nan action for specific performance, with no entitlement to monetary damages.<\/p>\n
5. Manner of Electing to Become a Protected Partner or To
\nIncrease Protected Amount. A Former Cornerstone Limited Partner who pursuant to
\nthe rights set forth under the other Paragraphs of this Exhibit E-6, wishes to
\nbecome a Protected Partner or, if already a Protected Partner, to increase its
\nProtected Amount, shall provide a written notice to the General Partner
\nspecifying the desired Protected Amount. If such election is made pursuant to
\nParagraph 2, such election shall become effective upon the receipt thereof by
\nthe General Partner unless (i) the General Partner determines that the
\nlimitation set forth in Paragraph 2 would be exceeded by reason of such
\nelection, or (ii) the General Partner reasonably determines, based on the
\nadvice of its tax advisors and after consulting with the Former Cornerstone
\nLimited Partner and its tax advisors, that the amount specified in such Former
\nCornerstone Limited Partner’s election substantially exceeds the amount
\nnecessary to cause such Former Cornerstone Limited Partner to be allocated
\nsufficient Partnership liabilities under Section 752 of the Code (taking into
\naccount the effect of anticipated reductions in Partnership debt on such Former
\nCornerstone Limited Partner’s allocable share of Partnership liabilities) to
\ncover such Former Cornerstone Limited Partner’s “negative tax capital account”
\nand reasonably projected changes therein. If such election is pursuant to a
\nCornerstone Tax Protection Agreement, such election shall become effective upon
\nthe receipt thereof by the General Partner unless the General Partner
\nreasonably determines, based on the advice of its tax advisors and after
\nconsulting with the Former Cornerstone Limited Partner and its tax advisor,
\nthat such Former Cornerstone Limited Partner does not have the right to
\nundertake such election without the consent of the General Partner. If such
\nelection is not pursuant to Paragraph 2 or a Cornerstone Tax Protection
\nAgreement (or such is election does not become effective pursuant to the
\nprovisions of one of the two preceding sentences), such election shall be
\ndeemed to be a request pursuant to Paragraph 4 of this Exhibit E-6 and shall
\nbecome effective only upon approval by the General Partner in accordance with
\nthe provisions of Paragraph 4. Upon becoming effective, such election shall be
\nirrevocable, cannot be reduced, and shall be binding upon successive
\ntransferees of the Former Cornerstone Limited Partner except as provided in
\nSection 13.3.D of the Agreement.<\/p>\n
6. No Obligation of the Partnership to Maintain Recourse Debt.
\nNotwithstanding any obligations of the Partnership referred to in this Exhibit
\nE-6, the Partnership shall not be obligated to maintain any level of
\nindebtedness that qualifies as a Recourse Liability or Partner Nonrecourse Debt
\nin excess of the amounts otherwise specifically required to be maintained under
\nthe Cornerstone Tax Protection Agreements assumed by the Partnership pursuant
\nto the Merger Agreement.<\/p>\n
7. Amendments of Exhibit E; Designation as Part II Protected
\nPartners. All Protected Partners and their respective Protected Amounts as
\nprovided in this Exhibit<\/p>\n
E-6-3
\n 113<\/p>\n
E-6 shall be reflected on Exhibit E, which shall be amended from time to time as
\nnecessary to reflect any additional Protected Partners and\/or increases in
\nProtected Amounts made pursuant to paragraphs 2, 3, or 4, above. Former
\nCornerstone Partnership Limited Partners who are or become Protected Partners
\npursuant to the provisions of this Exhibit E-6 shall be designated on Exhibit E
\nas Part II Protected Partners; provided, however, that any Former Cornerstone
\nLimited Partner who is only obligated to restore a deficit in its capital
\naccount upon liquidation of the Partnership pursuant to a Cornerstone Tax
\nProtection Agreement shall be designated on Exhibit E as a Part I Protected
\nPartner.<\/p>\n
8. Section 704(c) Method. Notwithstanding Paragraph 2.C. of
\nExhibit C, the Partnership shall use the “traditional method” under Regulations
\nSection 1.704-3(b) for purposes of making allocations under Section 704(c) of
\nthe Code with respect to each property in which Cornerstone Partnership owns a
\ndirect or indirect interest at the time of the Cornerstone Merger (the
\n“Cornerstone Properties”) to take into account the Book-Tax Disparities as of
\nthe effective time of the Cornerstone Merger with respect to the Cornerstone
\nProperties, with no “curative allocations” to offset the effect of the “ceiling
\nrule,” except to the extent that the Partnership expressly would be required to
\nuse a different method under a Cornerstone Tax Protection Agreement assumed by
\nthe Partnership pursuant to the Merger Agreement. The 704(c) Values of the
\nCornerstone Properties shall be as determined by agreement between Cornerstone
\nPartnership and the Partnership prior to the effective time of the Cornerstone
\nMerger, or in the absence of such agreement, as determined by the General
\nPartner using such reasonable method of valuation as it shall adopt.<\/p>\n
9. Allocations of “Tier 3” Nonrecourse Liabilities Pursuant to
\nRegulations Section 1.752-3(a)(3). Unless, and only to the extent, expressly
\nprovided otherwise in the Cornerstone Tax Protection Agreements assumed by the
\nPartnership pursuant to the Merger Agreement, and notwithstanding Section
\n6.1.C. of the Agreement, the Partnership shall determine in its reasonable
\ndiscretion the method to be used for allocating “excess nonrecourse
\nliabilities” of the Partnership pursuant to Regulations Section 1.752-3(a)(3)
\nfollowing the Cornerstone Merger, provided that (i) the Partnership shall not
\nuse with respect to the Former Cornerstone Limited Partners a method that is
\nless favorable than the method used by the Partnership with respect to the
\nother Limited Partners of the Partnership who are not parties to an express
\nagreement specifying a particular method to be used for such purposes, and (ii)
\nin the case of a Former Cornerstone Limited Partner who, prior to the
\nCornerstone Merger, had been specially allocated a portion of a Cornerstone
\nPartnership nonrecourse liability secured by a property with respect to which
\nsuch Cornerstone Partner has a built-in gain under Section 704(c) of the Code
\nto take into account such Former Cornerstone Limited Partner’s share of such
\nbuilt-in gain that was not taken into account in making the allocation of such
\nliability by Cornerstone Partnership under Regulations Section 1.752-3(a)(2),
\nthe Partnership shall continue such method of allocating such liability
\nfollowing the Cornerstone Merger.<\/p>\n
E-6-4
\n 114<\/p>\n
SCHEDULE 1 TO
\n EXHIBIT E-6<\/p>\n
FORMER CORNERSTONE LIMITED PARTNERS
\n WHO HAVE ELECTED TO BECOME PROTECTED PARTNERS
\n PURSUANT TO SECTION 1 OF EXHIBIT E-6<\/p>\n
\n\n—————————————————————————————————-
\n NAME OF FORMER CORNERSTONE LIMITED 2\/11\/00 6\/19\/00
\n PARTNER: RECOURSE DEBT AMOUNT: PROTECTED AMOUNT:
\n—————————————————————————————————-
\n <\/p>\n—————————————————————————————————-<\/p>\n
—————————————————————————————————-<\/p>\n
—————————————————————————————————-<\/p>\n
—————————————————————————————————-<\/p>\n
—————————————————————————————————-<\/p>\n
—————————————————————————————————-<\/p>\n
—————————————————————————————————-<\/p>\n
—————————————————————————————————-<\/p>\n
—————————————————————————————————-<\/p>\n
—————————————————————————————————-<\/p>\n
—————————————————————————————————-<\/p>\n
—————————————————————————————————-<\/p>\n
—————————————————————————————————-<\/p>\n
—————————————————————————————————-<\/p>\n
—————————————————————————————————-
\nAGGREGATE RECOURSE DEBT AMOUNT<\/p>\n
—————————————————————————————————-
\n<\/c><\/c><\/s><\/caption>\n<\/table>\n
E-6-5
\n 115<\/p>\n
SCHEDULE 2 TO
\n EXHIBIT E-6<\/p>\n
ASSIGNMENT AND ASSUMPTION AGREEMENT<\/p>\n
(Tax Protection Agreements)<\/p>\n
This ASSIGNMENT AND ASSUMPTION AGREEMENT (this “Agreement”) is
\nmade and entered into on June 19, 2000, between Cornerstone Properties Inc., a
\nNevada corporation (“Cornerstone”), Cornerstone Properties Limited Partnership,
\na Delaware limited partnership (“Cornerstone Partnership”), Equity Office
\nProperties Trust, a Maryland real estate investment trust (“EOP”), and EOP
\nOperating Limited Partnership, a Delaware limited partnership (“EOP
\nPartnership”).<\/p>\n
RECITALS<\/p>\n
WHEREAS, Cornerstone, Cornerstone Partnership, EOP and EOP
\nPartnership are parties to the Agreement and Plan of Merger dated as of
\nFebruary 11, 2000, as amended (the “Merger Agreement”), pursuant to which (i)
\nCornerstone will merge with and into EOP and (ii) Cornerstone Partnership will
\nmerge with and into EOP Partnership;<\/p>\n
WHEREAS, Cornerstone Partnership and\/or Cornerstone is a party
\nto each of the agreements described on Schedule A attached hereto
\n(collectively, the “Cornerstone Tax Protection Agreements”);<\/p>\n
WHEREAS, in connection with the transactions contemplated by the
\nMerger Agreement and as required by Section 5.14 of the Merger Agreement,
\nCornerstone Partnership and Cornerstone desire to assign to EOP Partnership and
\nEOP any and all of Cornerstone Partnership’s and Cornerstone’s rights and
\ninterests under the Cornerstone Tax Protection Agreements (such rights and
\ninterests hereinafter referred to as the “Cornerstone Rights”) in exchange for
\nEOP Partnership’s and EOP’s assumption of any and all of Cornerstone
\nPartnership’s and Cornerstone’s remaining obligations under the Cornerstone Tax
\nProtection Agreements (such obligations hereinafter referred to as the
\n“Cornerstone Obligations”); and<\/p>\n
WHEREAS, EOP Partnership and EOP desire to accept the
\nCornerstone Rights and to assume the Cornerstone Obligations;<\/p>\n
NOW, THEREFORE, in consideration of the mutual agreements
\ncontained herein, and for other good and valuable consideration, the receipt
\nand sufficiency of which are hereby acknowledged, the parties hereto agree as
\nfollows:<\/p>\n
AGREEMENT<\/p>\n
1. Assignment of Cornerstone Rights and Assumption of
\nCornerstone Obligations. Cornerstone Partnership and Cornerstone hereby assign
\nto EOP Partnership <\/p>\n
E-6-6
\n 116<\/p>\n
and EOP the Cornerstone Rights, and EOP Partnership and EOP hereby accept the
\nforegoing assignment and assume and agree to perform any and all of the
\nCornerstone Obligations.<\/p>\n
2. Counterparts. This Agreement may be executed in any
\nnumber of counterparts, each of which shall be deemed an original, but all
\nof which together shall constitute only one instrument.<\/p>\n
[Remainder of Page Intentionally Left Blank]<\/p>\n
E-6-7
\n 117<\/p>\n
IN WITNESS WHEREOF, the parties hereto have executed this
\nAgreement as of the date first above written.<\/p>\n
CORNERSTONE PROPERTIES INC.<\/p>\n
By: \/s\/ Kevin P. Mahoney
\n ——————————————-
\n Name: Kevin P. Mahoney
\n Title: Senior Vice President and
\n Chief Financial Officer<\/p>\n
CORNERSTONE PROPERTIES
\n LIMITED PARTNERSHIP<\/p>\n
By: Cornerstone Properties Inc.,
\n its general partner<\/p>\n
By: \/s\/ Kevin P. Mahoney
\n ——————————————-
\n Name: Kevin P. Mahoney
\n Title: Senior Vice President and
\n Chief Financial Officer<\/p>\n
E-6-8
\n 118<\/p>\n
EQUITY OFFICE PROPERTIES TRUST<\/p>\n
By: \/s\/ Stanley M. Stevens
\n ——————————————-
\n Name: Stanley M. Stevens
\n Title: Executive Vice President,
\n Chief Legal Counsel and Secretary<\/p>\n
EOP OPERATING LIMITED PARTNERSHIP<\/p>\n
By: Equity Office Properties Trust,
\n its general partner<\/p>\n
By: \/s\/ Stanley M. Stevens
\n ————————————-
\n Name: Stanley M. Stevens
\n Title: Executive Vice President,
\n Chief Legal Counsel and Secretary<\/p>\n
E-6-9
\n 119<\/p>\n
Schedule A<\/p>\n
CORNERSTONE TAX PROTECTION AGREEMENTS<\/p>\n
1. First Amendment to Agreement of Limited Partnership of
\nCornerstone Properties Limited Partnership, dated as of January 29, 1997
\n(related to Corporate 500, Phase I, and Corporate 500, Phase II).<\/p>\n
2. Second Amendment to Agreement of Limited Partnership
\nof Cornerstone Properties Limited Partnership, dated as of April 28, 1998.<\/p>\n
3. Third Amendment to Agreement of Limited Partnership of
\nCornerstone Properties Limited Partnership, dated as of June 3, 1998 (related
\nto 1299 Ocean Avenue, Santa Monica, California and 201 California Street, San
\nFrancisco, California), and related Tax Reimbursement Agreement, dated as of
\nJune 3, 1998, by and among Cornerstone Properties Limited Partnership, the New
\nPartners named therein and William L. Tooley.<\/p>\n
4. Fifth Amendment to Agreement of Limited Partnership of
\nCornerstone Properties Limited Partnership, dated as of January 21, 2000
\n(related to 400 Capital Mall, Sacramento, California).<\/p>\n
5. Contribution Agreement and Agreement and Plan of Merger,
\ndated as of June 22, 1998, as amended, by and among Cornerstone Properties
\nInc., Cornerstone Properties Limited Partnership, William Wilson & Associates
\nand the entities listed on Schedule I thereto.<\/p>\n
6. Letter, dated September 21, 1998, from Cornerstone
\nProperties Inc. and Cornerstone Properties Limited Partnership to
\nO’Brien-Kreitzberg & Associates.<\/p>\n
7. Letter, dated September 11, 1998, from Cornerstone
\nProperties Inc. and Cornerstone Properties Limited Partnership to Bixby Ranch
\nCompany.<\/p>\n
8. Agreement to Contribute, dated as of April 28, 1998, by
\nand between One Memorial Drive Limited Partnership, The Prudential Insurance
\nCompany of America, Cornerstone Properties Limited Partnership and One Memorial
\nCornerstone LLC.<\/p>\n
E-6-10
\n 120<\/p>\n
SCHEDULE 3 TO
\n EXHIBIT E-6<\/p>\n
CORNERSTONE TAX PROTECTION AGREEMENTS PURSUANT TO WHICH
\n CERTAIN FORMER CORNERSTONE LIMITED PARTNERS
\n HAVE THE RIGHT TO BECOME PROTECTED PARTNERS
\n SECTION 3 OF EXHIBIT E-6<\/p>\n
1. Third Amendment to Agreement of Limited Partnership of Cornerstone
\n Properties Limited Partnership, dated as of June 3, 1998 (related to
\n 1299 Ocean Avenue, Santa Monica, California and 201 California Street,
\n San Francisco, California), and related Tax Reimbursement Agreement,
\n dated as of June 3, 1998, by and among Cornerstone Properties Limited
\n Partnership, the New Partners named therein and William L. Tooley.<\/p>\n
2. Contribution Agreement and Agreement and Plan of Merger, dated as of
\n June 22, 1998, as amended, by and among Cornerstone Properties Inc.,
\n Cornerstone Properties Limited Partnership, William Wilson & Associates
\n and the entities listed on Schedule I thereto.<\/p>\n
E-6-11
\n 121<\/p>\n
ATTACHMENT A<\/p>\n
(SERIES A PREFERRED UNITS)<\/p>\n
In accordance with Sections 4.2.A and 4.2.D of the Partnership
\nAgreement, set forth below are the terms and conditions of the Series A
\nPreferred Units established and issued by the Partnership to the General Partner
\non December 19, 1997, in connection with the merger of Beacon Properties L.P.
\n(“Beacon Partnership”) with and into the Partnership (the “Beacon Partnership
\nMerger”), in exchange for the then outstanding Series A Preferred Units of
\nBeacon Partnership (all of which had been acquired by the General Partner as a
\nresult of the merger of Beacon Properties Corporation with and into the General
\nPartner). All capitalized terms used in this Attachment and not otherwise
\ndefined shall have the meanings assigned in the Partnership Agreement.<\/p>\n
A. Designation and Number. A series of Partnership Units,
\ndesignated as Series A Preferred Units, was established on December 19, 1997,
\non which date 8,000,0000 Series A Preferred Units were issued to the General
\nPartner in the Beacon Partnership Merger.<\/p>\n
B. Rank. The Series A Preferred Units shall, with respect to
\ndistribution rights and rights upon liquidation, dissolution or winding up of
\nthe Partnership, rank (a) senior to the Class A Units, Class B Units and all
\nPartnership Interests ranking junior to the Series A Preferred Units; (b) on a
\nparity with the Series B Preferred Units, the Series C Preferred Units, the
\nSeries D Preferred Units and all Partnership Interests issued by the
\nPartnership the terms of which specifically provide that such Partnership
\nInterests rank on a parity with the Series A Preferred Units; and (c) junior to
\nall Partnership Interests issued by the Partnership the terms of which
\nspecifically provide that such Partnership Interests rank senior to the Series
\nA Preferred Units.<\/p>\n
C. Distributions.<\/p>\n
(i) Pursuant to Section 5.1 of the Partnership Agreement,
\nholders of Series A Preferred Units shall be entitled to receive, out of
\nAvailable Cash, cumulative preferential distributions of Available Cash at the
\nrate of 8.98% of the $25.00 liquidation preference per annum (equivalent to a
\nfixed annual amount of $2.245 per unit). Such distributions shall be cumulative
\nfrom the last date on which any distributions were paid with respect to the
\nSeries A Preferred Units of Beacon Partnership for which the <\/p>\n
122<\/p>\n
Series A Preferred Units were exchanged in connection with the Beacon
\nPartnership Merger and shall be payable quarterly in arrears on or before March
\n15, June 15, September 15 and December 15 of each year or, if not a business
\nday, the next succeeding business day (each a “Series A Preferred Unit
\nDistribution Payment Date”). Any distribution payable on the Series A Preferred
\nUnits for any partial distribution period shall be computed on the basis of a
\n360-day year consisting of twelve 30-day months.<\/p>\n
(ii) No distributions on Series A Preferred Units shall be
\nauthorized or paid or set apart for payment at such time as the terms and
\nprovisions of any agreement of the Partnership, including any agreement relating
\nto its indebtedness, prohibits such authorization, payment or setting apart for
\npayment or provides that such authorization, payment or setting apart for
\npayment would constitute a breach thereof, or a default thereunder, or if such
\nauthorization or payment shall be restricted or prohibited by law.<\/p>\n
(iii) Notwithstanding the foregoing, distributions with respect to
\nthe Series A Preferred Units will accrue whether or not the terms and provisions
\nset forth in Section C.(ii) of this Attachment A at any time prohibit the
\ncurrent payment of distributions, whether or not there is sufficient Available
\nCash for such distributions and whether or not such distributions are
\nauthorized. Accrued but unpaid distributions on the Series A Preferred Units
\nwill accumulate as of the Series A Preferred Unit Distribution Payment Date on
\nwhich they first become payable.<\/p>\n
(iv) When distributions are not paid in full (or a sum sufficient
\nfor such full payment is not so set apart) upon the Series A Preferred Units and
\nany other Partnership Interests ranking on a parity as to distributions with the
\nSeries A Preferred Units, all distributions authorized upon the Series A
\nPreferred Units and any other Partnership Interests ranking on a parity as to
\ndistributions with the Series A Preferred Units shall be authorized pro rata so
\nthat the amount of distributions authorized per Partnership Unit of Series A
\nPreferred Units and such other Partnership Interests shall in all cases bear to
\neach other the same ratio that accrued distributions per Partnership Unit on the
\nSeries A Preferred Units and such other Partnership Interests (which shall not
\ninclude any accrual in respect of unpaid distributions for prior distribution
\nperiods if such other Partnership Interests do not have a cumulative
\ndistribution) bear to each other. No interest, or sum of money in lieu of
\ninterest, shall be payable in respect of any distribution payment or payments on
\nSeries A Preferred Units which may be in arrears.<\/p>\n
Attachment A-2
\n 123<\/p>\n
(v) Except as provided in Section C.(iv) of this Attachment A,
\nunless full cumulative distributions on the Series A Preferred Units have been
\nor contemporaneously are authorized and paid or authorized and a sum sufficient
\nfor the payment thereof is set apart for payment for all past distribution
\nperiods and the then current distribution period, no distributions (other than
\nin Partnership Interests ranking junior to the Series A Preferred Units as to
\ndistributions and upon liquidation) shall be authorized or paid or set aside for
\npayment nor shall any other distribution be authorized or made upon the Class A
\nUnits, the Class B Units, or any other Partnership Interests ranking junior to
\nor on a parity with the Series A Preferred Units as to distributions or upon
\nliquidation, nor shall any Class A Units, Class B Units, or any other
\nPartnership Interests ranking junior to or on a parity with the Series A
\nPreferred Units as to distributions or upon liquidation be redeemed, purchased
\nor otherwise acquired for any consideration (or any moneys be paid to or made
\navailable for a sinking fund for the redemption of any such units or other
\nPartnership Interests) by the Partnership (except by conversion into or exchange
\nfor Partnership Interests ranking junior to the Series A Preferred Units as to
\ndistributions and upon liquidation).<\/p>\n
(vi) Holders of the Series A Preferred Units shall not be entitled
\nto any distribution, whether payable in cash, property or Partnership Units in
\nexcess of full cumulative distributions on the Series A Preferred Units as
\ndescribed above. Any distribution payment made on the Series A Preferred Units
\nshall first be credited against the earliest accrued but unpaid distribution due
\nwith respect to such Series A Preferred Units which remains payable.<\/p>\n
D. Allocations.<\/p>\n
Allocations of the Partnership’s items of income, gain, loss and
\ndeduction shall be allocated among holders of Series A Preferred Units in
\naccordance with Article VI of the Agreement.<\/p>\n
E. Liquidation Preference.<\/p>\n
(i) Upon any voluntary or involuntary liquidation, dissolution or
\nwinding up of the affairs of the Partnership, the holders of Series A Preferred
\nUnits then outstanding are entitled to be paid out of the assets of the
\nPartnership available for distribution to the Partners pursuant to Section
\n13.2.A of the Agreement a liquidation preference of $25.00 per Series A
\nPreferred Unit, plus an amount equal to any accrued and unpaid distributions to
\nthe date of payment, before any distribution of assets is made <\/p>\n
Attachment A-3
\n 124<\/p>\n
to holders of Class A Units, Class B Units or any other Partnership Interests
\nthat rank junior to the Series A Preferred Units as to liquidation rights.<\/p>\n
(ii) In the event that, upon any such voluntary or involuntary
\nliquidation, dissolution or winding up, the available assets of the Partnership
\nare insufficient to pay the amount of the liquidating distributions on all
\noutstanding Series A Preferred Units and the corresponding amounts payable on
\nall other Partnership Interests ranking on a parity with the Series A Preferred
\nUnits in the distribution of assets, then such assets shall be allocated among
\nthe Series A Preferred Units, as a class, and each class or series of such other
\nsuch Partnership Interests, as a class, in proportion to the full liquidating
\ndistributions to which they would otherwise be respectively entitled.<\/p>\n
(iii) After payment of the full amount of the liquidating
\ndistributions to which they are entitled, the holders of Series A Preferred
\nUnits will have no right or claim to any of the remaining assets of the
\nPartnership.<\/p>\n
(iv) The consolidation or merger of the Partnership with or into
\nany other partnership, corporation, trust or entity or of any other partnership,
\ncorporation, trust or other entity with or into the Partnership or the sale,
\nlease or conveyance of all or substantially all of, the property or business of
\nthe Partnership, shall not be deemed to constitute a liquidation, dissolution or
\nwinding up of the Partnership for purposes of this Section E.<\/p>\n
F. Redemption.<\/p>\n
In connection with a redemption by the General Partner of any or
\nall of the Series A Preferred Shares of the General Partner, the Partnership
\nshall provide cash to the General Partner for such purpose which shall be equal
\nto redemption price of the Series A Preferred Shares to be redeemed and one
\nSeries A Preferred Unit shall be canceled with respect to each Series A
\nPreferred Share so redeemed. From and after the date in which the Series A
\nPreferred Shares are redeemed, any Series A Preferred Units so canceled shall no
\nlonger be outstanding and all rights hereunder, to distributions or otherwise,
\nwith respect to such Series A Preferred Units shall cease.<\/p>\n
Attachment A-4
\n 125<\/p>\n
ATTACHMENT B<\/p>\n
(SERIES B PREFERRED UNITS)<\/p>\n
In accordance with Sections 4.2.A and 4.2.D of the Agreement, set
\nforth below are the terms and conditions of the Series B Preferred Units
\nestablished and issued by the Partnership on February 19, 1998, in connection
\nwith the issuance of Series B Preferred Shares by the General Partner.
\nCapitalized terms used herein and not otherwise defined shall have the meanings
\ngiven to them in the Agreement.<\/p>\n
A. Designation and Number. A series of Partnership Units,
\ndesignated as Series B Preferred Units was established on February 19, 1998, on
\nwhich date 6,000,000 Series B Preferred Units were issued to the General
\nPartner.<\/p>\n
B. Rank. The Series B Preferred Units shall, with respect to
\ndistribution rights and rights upon voluntary or involuntary liquidation,
\ndissolution or winding up of the affairs of the Partnership, rank (a) senior to
\nthe Class A Units, Class B Units and all Partnership Interests ranking junior to
\nthe Series B Preferred Units; (b) on a parity with the Series A Preferred Units,
\nthe Series C Preferred Units, the Series D Preferred Units, and all other
\nPartnership Interests issued by the Partnership the terms of which specifically
\nprovide that such Partnership Interests rank on a parity with the Series B
\nPreferred Units; and (c) junior to all Partnership Interests issued by the
\nPartnership the terms of which specifically provide that such Partnership
\nInterests rank senior to the Series B Preferred Units.<\/p>\n
C. Distributions.<\/p>\n
(i) Pursuant to Section 5.1 of the Agreement, holders of Series B
\nPreferred Units shall be entitled to receive, out of Available Cash, cumulative
\npreferential cash distributions at the rate of 5.25% of the $50.00 liquidation
\npreference per annum (equivalent to a fixed annual amount of $2.625 per unit).
\nDistributions (which term as used herein shall include liquidated damages, if
\nany, payable pursuant to Section C.(vi) of this Attachment B) on the Series B
\nPreferred Units shall be payable quarterly and be cumulative from the fifteenth
\nday of each February, May, August and November or, if not a business day, the
\nnext succeeding business day (each, a “Series B Preferred Unit Distribution
\nPayment Date”). Any distribution (including the initial distribution) payable on
\nthe Series B Preferred Units for <\/p>\n
126<\/p>\n
any partial distribution period shall be prorated and computed on the basis of a
\n360-day year consisting of twelve 30-day months.<\/p>\n
(ii) No distribution on the Series B Preferred Units shall be
\nauthorized by the General Partner or paid or set apart for payment by the
\nPartnership at such time as the terms and provisions of any agreement of the
\nPartnership, including any agreement relating to its indebtedness, prohibits
\nsuch authorization, payment or setting apart for payment or provides that such
\nauthorization, payment or setting apart for payment would constitute a breach
\nthereof, or a default thereunder, or if such authorization or payment shall be
\nrestricted or prohibited by law. No interest, or sum of money in lieu of
\ninterest, shall be payable in respect of any distribution payment or payments on
\nthe Series B Preferred Units which may be in arrears.<\/p>\n
Notwithstanding the foregoing, distributions with respect to the
\nSeries B Preferred Units shall accumulate whether or not any of the foregoing
\nrestrictions exist, whether or not there is sufficient Available Cash for the
\npayment thereof and whether or not such distributions are authorized.
\nAccumulated but unpaid distributions on the Series B Preferred Units shall not
\nbear interest and holders of the Series B Preferred Units shall not be entitled
\nto any distributions in excess of full cumulative distributions. Any
\ndistribution payment made on the Series B Preferred Units shall first be
\ncredited against the earliest accumulated but unpaid distribution due with
\nrespect to such units which remains payable.<\/p>\n
(iii) Except as provided in Section C.(iv) of this Attachment B,
\nif any Series B Preferred Units are outstanding, no distributions (other than in
\nPartnership Interests ranking junior to the Series B Preferred Units as to
\ndistributions and upon liquidation, dissolution or winding up of the affairs of
\nthe Partnership) shall be declared or paid or set apart for payment nor shall
\nany other distribution be declared or made upon the Class A Units, the Class B
\nUnits, or any other Partnership Interests ranking junior to or on a parity with
\nthe Series B Preferred Units as to distributions or upon liquidation,
\ndissolution or winding up of the affairs of the Partnership for any period
\nunless full cumulative distributions have been or contemporaneously are declared
\nand paid or declared and a sum sufficient for the payment thereof set apart for
\nsuch payment on the Series B Preferred Units for all past distribution periods
\nand the then current distribution period, nor shall any Class A Units, Class B
\nUnits, or any other Partnership Interests ranking junior to or on a parity with
\nthe Series B Preferred Units as to distributions or upon liquidation,
\ndissolution or winding up of the affairs of the Partnership, be redeemed,
\npurchased or otherwise acquired for any consideration (or any moneys be paid to
\nor made available for a sinking fund for the redemption of any such Partnership
\nInterests) by the Partnership <\/p>\n
Attachment B-2
\n 127<\/p>\n
(except by conversion into or exchange for Partnership Interests ranking junior
\nto the Series B Preferred Units as to distributions and upon liquidation,
\ndissolution or winding up of the affairs of the Partnership).<\/p>\n
(iv) When distributions are not paid in full (or a sum sufficient
\nfor such full payment is not so set apart) upon the Series B Preferred Units and
\nany other Partnership Interests ranking on a parity as to distributions with the
\nSeries B Preferred Units, all distributions declared upon the Series B Preferred
\nUnits and any other Partnership Interests ranking on a parity as to
\ndistributions with the Series B Preferred Units shall be declared pro rata so
\nthat the amount of distributions declared per unit of Series B Preferred Units
\nand such other Partnership Interests shall in all cases bear to each other the
\nsame ratio that accumulated distributions per unit on the Series B Preferred
\nUnits and such other Partnership Interests (which shall not include any
\naccumulation in respect of unpaid distributions for prior distribution periods
\nif such other Partnership Interests do not have a cumulative distribution) bear
\nto each other.<\/p>\n
(v) Holders of Series B Preferred Units shall not be entitled to
\nany distribution, whether payable in cash, property or Partnership Interests, in
\nexcess of full cumulative distributions on the Series B Preferred Units as
\ndescribed above. Accumulated but unpaid distributions on the Series B Preferred
\nUnits will accumulate as of the Series B Preferred Unit Distribution Payment
\nDate on which they first become payable.<\/p>\n
(vi) If the General Partner fails to maintain the effectiveness of
\nthe registration statement as required by the Registration Rights Agreement
\ndated February 19, 1998 between the General Partner and Lehman Brothers Inc.
\n(the “Registration Rights Agreement”), liquidated damages shall accumulate on
\nthe $50.00 liquidation preference of the Series B Preferred Units at a rate of
\n0.25% per annum (equivalent to a fixed annual amount of $0.125 per unit) with
\nrespect to the first quarter immediately following such failure and at a rate of
\n0.50% per annum (equivalent to a fixed annual amount of $0.25 per unit) with
\nrespect to the second quarter and all subsequent quarters following such failure
\n(“Liquidated Damages”).<\/p>\n
D. Allocations.<\/p>\n
Allocations of the Partnership’s items of income, gain, loss and
\ndeduction shall be allocated among holders of Series B Preferred Units in
\naccordance with Article VI of the Agreement.<\/p>\n
E. Liquidation Preference.<\/p>\n
Attachment B-3
\n 128<\/p>\n
(i) In the event of any voluntary or involuntary liquidation,
\ndissolution or winding up of the affairs of the Partnership, the holders of the
\nSeries B Preferred Units shall be entitled to receive out of the assets of the
\nPartnership available for distribution to the Partners pursuant to Section
\n13.2.A of the Agreement a liquidation preference of $50.00 per Series B
\nPreferred Unit, plus an amount equal to any accumulated and unpaid distributions
\nto the date of payment, before any distribution of assets is made to holders of
\nClass A Units, Class B Units or any other Partnership Interests that rank junior
\nto the Series B Preferred Units as to liquidation rights.<\/p>\n
(ii) If upon any such voluntary or involuntary liquidation,
\ndissolution or winding up of the affairs of the Partnership, the assets of the
\nPartnership are insufficient to make such full payment to holders of the Series
\nB Preferred Units and the corresponding amounts payable on all other Partnership
\nInterests ranking on a parity with the Series B Preferred Units in the
\ndistribution of assets, then the holders of such Partnership Interests shall
\nshare ratably in any such distribution of assets in proportion to the full
\nliquidating distributions to which they would otherwise be respectively
\nentitled.<\/p>\n
(iii) After payment of the full amount of the liquidating
\ndistributions to which they are entitled, the holders of Series B Preferred
\nUnits shall have no right or claim to any of the remaining assets of the
\nPartnership.<\/p>\n
(iv) None of a consolidation or merger of the Partnership with or
\ninto another entity, merger of another entity with or into the Partnership, a
\nstatutory unit exchange by the Partnership or a sale, lease or conveyance of all
\nor substantially all of the Partnership’s property or business shall be
\nconsidered a liquidation, dissolution or winding up of the affairs of the
\nPartnership.<\/p>\n
F. Redemption.<\/p>\n
In connection with redemption by the General Partner of any of
\nits Series B Preferred Shares in accordance with the provisions of the Articles
\nSupplementary to the Declaration of Trust filed with the State Department of
\nAssessments and Taxation of Maryland on February 19, 1998, establishing the
\nSeries B Preferred Shares (the “Articles Supplementary”), the Partnership shall
\nprovide cash to the General Partner for such purpose which shall be equal to the
\nredemption price (as set forth in the Articles Supplementary) and one Series B
\nPreferred Unit shall be canceled with respect to each Series B Preferred Share
\nso redeemed by the General Partner. From and after the Series B Preferred Share
\nRedemption Date (as defined in <\/p>\n
Attachment B-4
\n 129<\/p>\n
the Articles Supplementary), any Series B Preferred Units so canceled shall no
\nlonger be outstanding and all rights hereunder, to distributions or otherwise,
\nwith respect to such Series B Preferred Units shall cease.<\/p>\n
G. Conversion.<\/p>\n
In connection with conversion into Shares of any Series B
\nPreferred Shares in accordance with the provisions of the Articles
\nSupplementary, the Partnership shall (i) issue to the General Partner a number
\nof Class A Units equal to the number of Shares issued by the General Partner
\nupon such conversion; and (ii) provide cash to the General Partner, if
\nnecessary, in an amount equal to the amount of cash paid by the General Partner
\nupon conversion of any Series B Preferred Shares which would otherwise result in
\nthe issuance of fractional Shares. One Series B Preferred Unit, or any fraction
\nthereof, shall be canceled with respect to each Series B Preferred Share, or any
\nfraction thereof, so converted, and from and after such conversion, any Series B
\nPreferred Units so canceled shall no longer be outstanding and all rights
\nhereunder, to distributions or otherwise, with respect to such Series B
\nPreferred Units shall cease.<\/p>\n
Attachment B-5
\n 130<\/p>\n
ATTACHMENT C<\/p>\n
(SERIES C PREFERRED UNITS)<\/p>\n
In accordance with Sections 4.2.A and 4.2.D of the Agreement, set
\nforth below are the terms and conditions of the Series C Preferred Units
\nestablished and issued by the Partnership on December 14, 1998, in connection
\nwith issuance of Series C Preferred Shares by the General Partner. Capitalized
\nterms used herein and not otherwise defined shall have the meanings given to
\nthem in the Agreement.<\/p>\n
A. Designation and Number. A series of Partnership Units,
\ndesignated as Series C Preferred Units was established on December 14, 1998, on
\nwhich date 4,600,000 Series C Preferred Units were issued to the General
\nPartner.<\/p>\n
B. Rank. The Series C Preferred Units shall, with respect to
\ndistribution rights and rights upon liquidation, dissolution or winding up of
\nthe Partnership, rank (a) senior to the Class A, Units, Class B Units and all
\nPartnership Interests ranking junior to the Series C Preferred Units; (b) on a
\nparity with the Series A Preferred Units, the Series B Preferred Units, the
\nSeries D Preferred Units, and all other Partnership Interests issued by the
\nPartnership the terms of which specifically provide that such Partnership
\nInterests rank on a parity with the Series C Preferred Units; and (c) junior to
\nall Partnership Interests issued by the Partnership the terms of which
\nspecifically provide that such Partnership Interests rank senior to the Series C
\nPreferred Units.<\/p>\n
C. Distributions.<\/p>\n
(i) Pursuant to Section 5.1 of the Agreement, holders of Series C
\nPreferred Units shall be entitled to receive, out of Available Cash, cumulative
\npreferential distributions of Available Cash at the rate of 8 5\/8% of the $25.00
\nliquidation preference per annum (equivalent to a fixed annual amount of
\n$2.15625 per unit). Such distributions shall accumulate on a daily basis and be
\ncumulative from the date of original issuance (December 8, 1998) and shall be
\npayable quarterly in arrears on March 15, June 15, September 15 and December 15
\nof each year or, if not a business day, the next succeeding business day (each a
\n“Series C Preferred Unit Distribution Payment Date”), commencing March 15, 1999.
\nAny distribution payable on the Series C Preferred Units for any partial
\ndistribution period shall be computed on the basis of a 360-day year consisting
\nof twelve 30-day months.<\/p>\n
131<\/p>\n
(ii) No distributions on Series C Preferred Units shall be
\nauthorized or paid or set apart for payment at such time as the terms and
\nprovisions of any agreement of the Partnership, including any agreement relating
\nto its indebtedness, prohibits such authorization, payment or setting apart for
\npayment or provides that such authorization, payment or setting apart for
\npayment would constitute a breach thereof, or a default thereunder, or if such
\nauthorization or payment shall be restricted or prohibited by law.<\/p>\n
(iii) Notwithstanding the foregoing, distributions with respect
\nto the Series C Preferred Units will accumulate whether or not the terms and
\nprovisions set forth in Section C.(ii) of this Attachment C at any time prohibit
\nthe current payment of distributions, whether or not there is sufficient
\nAvailable Cash for such distributions and whether or not such distributions are
\nauthorized. Accumulated but unpaid distributions on the Series C Preferred Units
\nwill accumulate as of the Series C Preferred Unit Distribution Payment Date on
\nwhich they first become payable.<\/p>\n
(iv) When distributions are not paid in full (or a sum sufficient
\nfor such full payment is not so set apart) upon the Series C Preferred Units and
\nany other Partnership Interests ranking on a parity as to distributions with the
\nSeries C Preferred Units, all distributions authorized upon the Series C
\nPreferred Units and any other Partnership Interests ranking on a parity as to
\ndistributions with the Series C Preferred Units shall be authorized pro rata so
\nthat the amount of distributions authorized per Partnership Unit of Series C
\nPreferred Units and such other Partnership Interests shall in all cases bear to
\neach other the same ratio that accumulated distributions per Partnership Unit on
\nthe Series C Preferred Units and such other Partnership Interests (which shall
\nnot include any accumulation in respect of unpaid distributions for prior
\ndistribution periods if such other Partnership Interests do not have a
\ncumulative distribution) bear to each other. No interest, or sum of money in
\nlieu of interest, shall be payable in respect of any distribution payment or
\npayments on Series C Preferred Units which may be in arrears.<\/p>\n
(v) Except as provided in Section C.(iv) of this Attachment C,
\nunless full cumulative distributions on the Series C Preferred Units have been
\nor contemporaneously are authorized and paid or authorized and a sum sufficient
\nfor the payment thereof is set apart for payment for all past distribution
\nperiods and the then current distribution period, no distributions (other than
\nin Partnership Interests ranking junior to the Series C Preferred Units as to
\ndistributions and upon liquidation) shall be authorized or paid or set aside for
\npayment nor shall any other distribution be authorized or made upon the Class A
\nUnits, the Class B Units, or any other Partnership Interests <\/p>\n
Attachment C-2
\n 132<\/p>\n
ranking junior to or on a parity with the Series C Preferred Units as to
\ndistributions or upon liquidation, nor shall any Class A Units, Class B Units,
\nor any other Partnership Interests ranking junior to or on a parity with the
\nSeries C Preferred Shares as to distributions or upon liquidation be redeemed,
\npurchased or otherwise acquired for any consideration (or any moneys be paid to
\nor made available for a sinking fund for the redemption of any such units or
\nother Partnership Interests) by the Partnership (except by conversion into or
\nexchange for Partnership Interests ranking junior to the Series C Preferred
\nUnits as to distributions and upon liquidation).<\/p>\n
(vi) Holders of the Series C Preferred Units shall not be
\nentitled to any distribution, whether payable in cash, property or Partnership
\nUnits in excess of full cumulative distributions on the Series C Preferred Units
\nas described above. Any distribution payment made on the Series C Preferred
\nUnits shall first be credited against the earliest accumulated but unpaid
\ndistribution due with respect to such Series C Preferred Units which remains
\npayable.<\/p>\n
D. Allocations.<\/p>\n
Allocations of the Partnership’s items of income, gain, loss and
\ndeduction shall be allocated among holders of Series C Preferred Units in
\naccordance with Article VI of the Agreement.<\/p>\n
E. Liquidation Preference.<\/p>\n
(i) Upon any voluntary or involuntary liquidation, dissolution or
\nwinding up of the affairs of the Partnership, the holders of Series C Preferred
\nUnits then outstanding are entitled to be paid out of the assets of the
\nPartnership available for distribution to the Partners pursuant to Section
\n13.2.A of the Agreement a liquidation preference of $25.00 per Series C
\nPreferred Unit, plus an amount equal to any accumulated and unpaid distributions
\nto the date of payment, before any distribution of assets is made to holders of
\nClass A Units, Class B Units or any other Partnership Interests that rank junior
\nto the Series C Preferred Units as to liquidation rights.<\/p>\n
(ii) In the event that, upon any such voluntary or involuntary
\nliquidation, dissolution or winding up, the available assets of the Partnership
\nare insufficient to pay the amount of the liquidating distributions on all
\noutstanding Series C Preferred Units and the corresponding amounts payable on
\nall other Partnership Interests ranking on a parity with the Series C Preferred
\nUnits in the distribution of assets, then such assets shall <\/p>\n
Attachment C-3
\n 133<\/p>\n
be allocated among the Series C Preferred Units, as a class, and each class or
\nseries of such other such Partnership Interests, as a class, in proportion to
\nthe full liquidating distributions to which they would otherwise be respectively
\nentitled.<\/p>\n
(iii) After payment of the full amount of the liquidating
\ndistributions to which they are entitled, the holders of Series C Preferred
\nUnits will have no right or claim to any of the remaining assets of the
\nPartnership.<\/p>\n
(iv) The consolidation or merger of the Partnership with or into
\nany other partnership, corporation, trust or entity or of any other partnership,
\ncorporation, trust or other entity with or into the Partnership or the sale,
\nlease or conveyance of all or substantially all of, the property or business of
\nthe Partnership, shall not be deemed to constitute a liquidation, dissolution or
\nwinding up of the Partnership for purposes of this Section E.<\/p>\n
F. Redemption.<\/p>\n
In connection with a redemption by the General Partner of any or
\nall of the Series C Preferred Shares, the Partnership shall provide cash to the
\nGeneral Partner for such purpose which shall be equal to redemption price of the
\nSeries C Preferred Shares to be redeemed and one Series C Preferred Unit shall
\nbe canceled with respect to each Series C Preferred Share so redeemed. From and
\nafter the date in which the Series C Preferred Shares are redeemed, the Series C
\nPreferred Units so canceled shall no longer be outstanding and all rights
\nhereunder, to distributions or otherwise, with respect to such Series C
\nPreferred Units shall cease.<\/p>\n
Attachment C-4
\n 134<\/p>\n
ATTACHMENT D<\/p>\n
(SERIES D PREFERRED UNITS)<\/p>\n
In accordance with Sections 4.2.A and 4.2.D of the
\nAgreement, set forth below are the terms and conditions of the Series D
\nPreferred Units hereby established that will be issued by the Partnership to
\nCornerstone Properties Inc. on June 19, 2000, in connection with the merger of
\nCornerstone Properties Limited Partnership (“Cornerstone Partnership”) with and
\ninto the Partnership (the “Cornerstone Partnership Merger”), in exchange for the
\nthen outstanding Series A Cumulative Convertible Preferred Units of Cornerstone
\nPartnership (all of which will be acquired by the General Partner in the merger
\nof Cornerstone Properties Inc. with and into General Partner (the “REIT Merger”)
\nimmediately following the Cornerstone Partnership Merger). All capitalized terms
\nused in this Attachment and not otherwise defined shall have the meanings
\nassigned in the Partnership Agreement.<\/p>\n
A. Designation and Number. A series of Partnership Units,
\ndesignated as Series D 7.0% cumulative Convertible Preferred Units (the “Series
\nD Preferred Units”) is hereby established. The number of Series D Partnership
\nUnits shall be 3,030,303.<\/p>\n
B. Rank. The Series D Preferred Units shall, with respect to
\ndistribution rights and rights upon liquidation, dissolution or winding up of
\nthe Partnership, rank (a) senior to the Class A Units, Class B Units and all
\nPartnership Interests ranking junior to the Series D Preferred Units; (b) on a
\nparity with the Series A Preferred Units, the Series B Preferred Units, the
\nSeries C Preferred Units, and all Partnership Interests issued by the
\nPartnership the terms of which specifically provide that such Partnership
\nInterests rank on a parity with the Series D Preferred Units (each referred to
\nas “Parity Preferred Units”); and (c) junior to all Partnership Interests
\nissued by the Partnership the terms of which specifically provide that such
\nPartnership Interests rank senior to the Series D Preferred Units.<\/p>\n
C. Distributions.<\/p>\n
Pursuant to Section 5.1 of the Partnership Agreement,
\nholders of Series D Preferred Units will be entitled to receive, out of
\nAvailable Cash, cash distributions at the rate of 7% per annum on the $16.50
\nliquidation preference. Such distributions shall be cumulative from June 19,
\n2000, and will be payable annually on August 4 of each year (the “Series D<\/p>\n
135<\/p>\n
Preferred Unit Distribution Payment Date”). Distributions will be payable, in
\narrears, to holders of record of Series D Preferred Units as they appear on the
\nbooks of the Partnership on such record dates, not more than 60 days nor less
\nthan 10 days preceding the payment dates thereof, as shall be fixed by the
\nGeneral Partner. The amount of distributions payable for the initial
\ndistribution period or any period shorter or longer than a full distribution
\nperiod shall be calculated on the basis of a 360-day year of twelve 30-day
\nmonths. No distributions may be declared or paid or set apart for payment on
\nany Parity Partnership Preferred Units with regard to the payment of
\ndistributions unless there shall also be or have been declared and paid or set
\napart for payment on the Series D Preferred Units like distributions for all
\ndistribution payment periods of the Series D Preferred Units ending on or
\nbefore the distribution payment date of such Parity Partnership Preferred
\nUnits, ratably in proportion to the respective amounts of distributions (x)
\naccumulated and unpaid or payable on such Series D Preferred Units on the one
\nhand, and (y) accumulated and unpaid through the distribution payment period or
\nperiods of the Series D Preferred Units next preceding such distribution
\npayment date, on the other hand.<\/p>\n
Except as set forth in the preceding sentence, unless
\nfull cumulative distributions on the Series D Preferred Units have been paid,
\nno distributions may be paid or declared and set aside for payment or other
\ndistribution made upon the Class A Units, Class B Units or on any other
\nPartnership Units ranking junior to or on a parity with the Series D Preferred
\nUnits as to distributions, nor any Class A Units, Class B Units, or any other
\nPartnership Units ranking junior to or on a parity with the Series D Preferred
\nUnits as to distributions, may be redeemed, purchased or otherwise acquired for
\nany consideration (or any payment be made to or available for a sinking fund
\nfor the redemption of any Units or other Partnership Interests); provided,
\nhowever, that any moneys therefore deposited in any sinking fund with respect
\nto any Partnership Unit in compliance with the provisions of such sinking fund
\nmay thereafter be applied to the purchase or redemption of such Partnership
\nUnit in accordance with the terms of such sinking fund, regardless of whether,
\nat the time of such application full cumulative distributions upon Series D
\nPreferred Units outstanding to the last distribution payment date shall have
\nbeen paid or declared and set apart for payment) by the Partnership; provided
\nthat any such junior Partnership Units may be converted into or exchanged for
\nPartnership Units ranking junior to the Series D Preferred Units as to
\ndistributions, and, provided, further, that any such Partnership Units or
\nParity Partnership Preferred Units or Partnership Units may be issued by the
\nPartnership to the General Partner in connection with a purchase of any<\/p>\n
Attachment D-2<\/p>\n
136<\/p>\n
corresponding share of beneficial interest issued by the General Partner to
\npreserve the General Partner Entity’s status as a real estate trust.<\/p>\n
D. Allocations.<\/p>\n
Allocations of the Partnership’s items of income, gain,
\nloss and deduction shall be allocated among the holders of Series D Preferred
\nUnits in accordance with Article VI of the Partnership Agreement.<\/p>\n
E. Liquidation Preference.<\/p>\n
The Series D Preferred Units shall rank, as to
\nliquidation, dissolution or winding up of the Partnership, prior to Class A
\nUnits and Class B Units and any other class of Partnership Units of the
\nPartnership ranking junior to Series D Preferred Units as to rights upon
\nliquidation, dissolution or winding up of the Partnership, so that in the event
\nof any liquidation, dissolution or winding up of the Partnership, whether
\nvoluntary or involuntary, the holders of the Series D Preferred Units shall be
\nentitled to receive out of the assets of the Partnership available for
\ndistribution to holders of Partnership Units, whether from capital, surplus or
\nearnings, before any distribution is made to holders of Class A Units, Class B
\nUnits or any other such junior Partnership Units, an amount equal to $16.50 per
\nunit (the “Liquidation Preference” of a Series D Preferred Units) plus an
\namount equal to all distributions (whether or not earned or declared) accrued
\nand accumulated and unpaid on the Series D Preferred Units to the date of final
\ndistribution. The holders of the Series D Preferred Units will not be entitled
\nto receive the Liquidation Preference until the liquidation preference of any
\nother class of Partnership Units of the Partnership ranking senior to the
\nSeries D Preferred Units as to rights upon liquidation, dissolution or winding
\nup shall have been paid (or a sum set aside therefor sufficient to provide for
\npayment) in full. After payment of the full amount of the Liquidation
\nPreference and such distributions, the holders of Series D Preferred Units will
\nnot be entitled to any further participation in any distribution of assets by
\nthe Partnership. If, upon any liquidation, dissolution or winding up of the
\nPartnership, the assets of the Partnership, or proceeds thereof, distributable
\namong the holders of Parity Partnership Preferred Units shall be insufficient
\nto pay in full the preferential amount aforesaid, then such assets, or the
\nProceeds thereof, shall be distributable among such holders ratably in
\naccordance with the respective amounts which would be payable on such units if
\nall amounts payable thereon were paid in full. For the purposes hereof, neither
\na consolidation or merger of the Partnership with or into any other
\npartnership, limited liability company, corporation or any other entity, nor a
\nmerger of any other partnership, limited liability company, corporation or any
\nother entity with or into the Partnership, nor a sale or transfer of all <\/p>\n
Attachment D-3
\n 137<\/p>\n
or any part of the Partnership assets for cash or securities shall be considered
\na liquidation, dissolution or winding up of the Partnership.<\/p>\n
F. Conversion.<\/p>\n
Each Series D Preferred Unit shall convertible at any
\ntime, at the election of the holders, thereof, into a Class A Unit. In the
\nevent that the REIT Merger is consummated and the Series A Cumulative
\nConvertible Preferred Stock of Cornerstone Properties, Inc. is redeemed to
\nextinguished in connection therewith, the Series D Preferred Units shall
\nautomatically be converted into a number of Class A Units equal to the product
\nof (i) the number of Series D Preferred Units outstanding at such time,
\nmultiplied by (ii) 0.7009.<\/p>\n
G. Value.<\/p>\n
For purposes of the definition of Deemed Value of
\nPartnership Interest, the Value on any date of the Series D Preferred Units
\nshall be the greater of (i) the Value of a Common Share of the General Partner
\non such date or (ii) the Liquidation Preference of such Series D Preferred
\nUnit.
\n H. Voting Rights.<\/p>\n
The holders of Series D Preferred Units shall have no
\nvoting rights whatsoever, except for (i) any voting rights to which they may be
\nentitled under the laws of the State of Delaware and (ii) as follows:<\/p>\n
So long as any Series D Partnership Preferred Units
\n remain outstanding, the consent of the holders of at least
\n two-thirds of the Series D Preferred Units outstanding at the
\n time and all other classes or series of Partnership Preferred
\n Units upon which like voting rights have been conferred and are
\n exercisable (voting together as a class) given in person or by
\n proxy, either in writing or at any meeting called for the
\n purpose, shall be necessary to permit, effect or validate any one
\n or more of the following:<\/p>\n
(i) the issuance or increase of any class or series of
\n Partnership Units ranking senior to the Series D
\n Preferred Units; or<\/p>\n
(ii) the amendment, alteration or repeal, whether by
\n merger, consolidation or otherwise, of any of the
\n provisions of this Agreement, (including this<\/p>\n
Attachment D-4
\n 138<\/p>\n
Attachment or any provision hereof) that would
\n materially and adversely affect any power,
\n preference, or special right of the Series D
\n Preferred Units or of the holders thereof;<\/p>\n
provided, however, that any increase in the
\n number of any class or series of Partnership Units or the
\n creation and issuance of other classes or series of
\n Partnership Units, in each case ranking on a parity with
\n or junior to the Series D Preferred Units with respect to
\n the payment of dividends and the distribution of assets
\n upon liquidation, dissolution or winding up, shall not be
\n deemed to materially and adversely affect such powers,
\n preferences or special rights.<\/p>\n
Attachment D-5<\/p>\n","protected":false},"template":"","meta":{"_acf_changed":false,"_stopmodifiedupdate":true,"_modified_date":"","_cloudinary_featured_overwrite":false},"corporate_contracts_companies":[7468],"corporate_contracts_industries":[9489],"corporate_contracts_types":[9573,9577],"class_list":["post-41381","corporate_contracts","type-corporate_contracts","status-publish","hentry","corporate_contracts_companies-equity-office-properties-trust","corporate_contracts_industries-real__reits","corporate_contracts_types-formation","corporate_contracts_types-formation__partner"],"acf":[],"_links":{"self":[{"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts\/41381","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts"}],"about":[{"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/types\/corporate_contracts"}],"wp:attachment":[{"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/media?parent=41381"}],"wp:term":[{"taxonomy":"corporate_contracts_companies","embeddable":true,"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts_companies?post=41381"},{"taxonomy":"corporate_contracts_industries","embeddable":true,"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts_industries?post=41381"},{"taxonomy":"corporate_contracts_types","embeddable":true,"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts_types?post=41381"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}