Contract

EXHIBIT 10.2================================================================================ FORM OF AGREEMENT OF LIMITED PARTNERSHIP OF NNN HEALTHCARE/OFFICE REIT HOLDINGS, L.P.================================================================================ _______________ __, 2006 TABLE OF CONTENTS

PAGE —- ARTICLE 1 DEFINED TERMS………………………………………….. 1ARTICLE 2 ORGANIZATIONAL MATTERS………………………………….. 13 2.1 Formation………………………………………………… 13 2.2 Name…………………………………………………….. 13 2.3 Registered Office and Agent………………………………… 14 2.4 Principal Place of Business………………………………… 14 2.5 Term and Termination………………………………………. 14 2.6 Power of Attorney…………………………………………. 14 2.7 Effectiveness of this Agreement…………………………….. 16ARTICLE 3 PURPOSE AND POWERS……………………………………… 16 3.1 Purpose and Business………………………………………. 16 3.2 Powers…………………………………………………… 17ARTICLE 4 CAPITAL CONTRIBUTIONS; PARTNERSHIP UNITS; ADDITIONAL FUNDS….. 17 4.1 Capital Contributions of the Partners……………………….. 17 4.2 Issuance of Additional Partnership Interests…………………. 18 4.3 Issuance of Securities by the General Partner………………… 18 4.4 Additional Funds………………………………………….. 20 4.5 No Third-Party Beneficiary…………………………………. 20 4.6 No Interest………………………………………………. 20 4.7 No Preemptive Rights………………………………………. 20ARTICLE 5 DISTRIBUTIONS………………………………………….. 21 5.1 Distributions…………………………………………….. 21 5.2 Qualification as a REIT……………………………………. 23 5.3 Withholding………………………………………………. 23 5.4 Additional Partnership Interests……………………………. 23ARTICLE 6 ALLOCATIONS……………………………………………. 23 6.1 Allocation of Profits and Net Losses………………………… 23 6.2 Special Allocations……………………………………….. 24 6.4 Revisions to Allocations to Reflect Issuance of Partnership Interests………………………………………………… 25ARTICLE 7 MANAGEMENT AND OPERATIONS OF BUSINESS…………………….. 26 7.1 Management……………………………………………….. 26 7.2 Certificate of Limited Partnership………………………….. 29 7.3 Reimbursement of the General Partner………………………… 29 7.4 Acquisition of Limited Partner Interests by the General Partner… 30 7.5 Transactions with Affiliates……………………………….. 30 7.6 Indemnification…………………………………………… 31 7.7 Liability of the General Partner……………………………. 34 7.8 Other Matters Concerning the General Partner…………………. 34 7.9 Title to Partnership Assets………………………………… 35 7.10 Reliance by Third Parties…………………………………. 35ARTICLE 8 RIGHTS AND OBLIGATIONS OF LIMITED PARTNERS………………… 36 8.1 Limitation of Liability……………………………………. 36 8.2 No Right to Participate in the Management of Business…………. 36 8.3 Outside Activities of Limited Partners………………………. 36
8.4 Return of Capital…………………………………………. 37 8.5 Rights of Limited Partners Relating to the Partnership………… 37 8.6 Redemption Right………………………………………….. 38ARTICLE 9 BOOKS, RECORDS, ACCOUNTING AND REPORTS……………………. 40 9.1 Records and Accounting…………………………………….. 40 9.2 Reports………………………………………………….. 41ARTICLE 10 TAX MATTERS…………………………………………… 41 10.1 Preparation of Tax Returns………………………………… 41 10.2 Tax Elections……………………………………………. 41 10.3 Tax Matters Partner………………………………………. 42 10.4 Organizational Expenses…………………………………… 43 10.5 Withholding……………………………………………… 43ARTICLE 11 TRANSFERS AND WITHDRAWALS………………………………. 44 11.1 Transfer………………………………………………… 44 11.2 Transfer of the General Partner’s General Partner Interest……. 44 11.3 Limited Partners’ Rights to Transfer……………………….. 45 11.4 Substituted Limited Partners………………………………. 46 11.5 Assignees……………………………………………….. 46 11.6 General Provisions……………………………………….. 47ARTICLE 12 ADMISSION OF PARTNERS………………………………….. 48 12.1 Admission of Successor General Partner……………………… 48 12.2 Admission of Additional Limited Partners……………………. 48 12.3 Amendment of Agreement and Certificate of Limited Partnership…. 49ARTICLE 13 DISSOLUTION, LIQUIDATION AND TERMINATION…………………. 49 13.1 Dissolution……………………………………………… 49 13.2 Winding Up; Liquidation…………………………………… 50 13.3 No Obligation to Contribute Deficit………………………… 51 13.4 Notice of Dissolution…………………………………….. 51 13.5 Termination of Partnership and Cancellation of Certificate of Limited Partnership………………………………………. 52 13.6 Reasonable Time for Winding-Up…………………………….. 52 13.7 Waiver of Partition………………………………………. 52ARTICLE 14 AMENDMENT OF PARTNERSHIP AGREEMENT; MEETINGS……………… 52 14.1 Amendments………………………………………………. 52 14.2 Meetings of the Partners………………………………….. 52ARTICLE 15 GENERAL PROVISIONS…………………………………….. 53 15.1 Addresses and Notice……………………………………… 53 15.2 Titles and Captions………………………………………. 54 15.3 Pronouns and Plurals……………………………………… 54 15.4 Further Action…………………………………………… 54 15.5 Binding Effect…………………………………………… 54 15.6 Creditors……………………………………………….. 54 15.7 Waiver………………………………………………….. 54 15.8 Counterparts…………………………………………….. 54 15.9 Applicable Law…………………………………………… 55 15.10 Invalidity of Provisions…………………………………. 55 15.11 Merger…………………………………………………. 55 15.12 No Rights as Stockholders………………………………… 55

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15.13 Entire Agreement………………………………………… 55EXHIBITSExhibit A — Partner’s Contributions and Partnership Interests……….. A-1Exhibit B — Form of Notice of Redemption Request…………………… B-1

-iii- FORM OF AGREEMENT OF LIMITED PARTNERSHIP OF NNN HEALTHCARE/OFFICE REIT HOLDINGS, L.P. THIS AGREEMENT OF LIMITED PARTNERSHIP OF NNN Healthcare/Office REITHoldings, L.P. (this “Agreement”), dated as of ____________ ___, 2006, isentered into by and among NNN Healthcare/Office REIT, Inc., a Marylandcorporation, as general partner (the “General Partner”), and those Persons whohave executed this Agreement or a counterpart hereof, or who become partieshereto pursuant to the terms of this Agreement. WITNESSETH WHEREAS, the General Partner and the Initial Limited Partner formed NNNHealthcare/Office REIT Holdings, L.P. (the “Partnership”) as a limitedpartnership pursuant to the Act by filing a certificate of limited partnershipwith the Secretary of State of the State of Delaware on April 20, 2006; and WHEREAS, this Agreement shall constitute the “partnership agreement”(within the meaning of the Act) of the Partnership, and shall be binding uponall Persons now or at any time hereafter who are Partners; NOW, THEREFORE, in consideration of the mutual covenants and obligationsset forth in this Agreement, and of other good and valuable consideration, thereceipt and sufficiency of which is hereby acknowledged, the parties hereto,intending legally to be bound, hereby agree as follows: ARTICLE 1 DEFINED TERMS Capitalized terms used in this Agreement (including exhibits, schedules andamendments) shall have the meanings set forth below or in the Section of thisAgreement referred to below, except as otherwise expressly indicated or limitedby the context in which they appear in this Agreement. All terms defined in thisAgreement in the singular have the same meanings when used in the plural andvice versa. Accounting terms used but not otherwise defined shall have themeanings given to them under GAAP.1.1 “ACT” means the Delaware Revised Uniform Limited Partnership Act, as amendedfrom time to time, and any successor to such statute.1.2 “ADDITIONAL LIMITED PARTNER” means a Person that has executed and deliveredan additional limited partner signature page in the form required by the GeneralPartner and has been admitted to the Partnership as a Limited Partner pursuantto Section 12.2.1.3 “ADJUSTED CAPITAL ACCOUNT DEFICIT” means with respect to any Partner, thenegative balance, if any, in such Partner’s Capital Account as of the end of anyrelevant Fiscal Year, determined after giving effect to the followingadjustments: (a) credit to such Capital Account any portion of such negative balancewhich such Partner (i) is treated as obligated to restore to the Partnershippursuant to the provisions ofTreasury Regulations Section 1.704-1(b)(2)(ii)(c), or (ii) is deemed to beobligated to restore to the Partnership pursuant to the penultimate sentences ofTreasury Regulations Sections 1.704-2(g)(1) and 1.704-2(i)(5); and (b) debit to such Capital Account the items described in TreasuryRegulations Sections 1.704-1(b)(2)(ii)(d)(4), (5) and (6).This definition of Adjusted Capital Account Deficit is intended to comply withthe provisions of Treasury Regulations Section 1.704-1(b)(2)(ii)(d) and shall beinterpreted consistently therewith.1.4 “ADVISOR” means Triple Net Properties, LLC, the advisor to the Partnershipand the General Partner pursuant to the Advisory Agreement.1.5 “ADVISORY AGREEMENT” means that certain Advisory Agreement by and among theAdvisor, the Partnership and the General Partner dated as of _______ ___, 2006.1.6 “ADVISOR PARTICIPATION IN SALES PROCEEDS” has the meaning set forth inSection 5.1(c).1.7 “AFFILIATE” means with respect to any Person, (i) any Person directly orindirectly owning, controlling or holding, with the power to vote, ten percentor more of the outstanding voting securities of such other Person; (ii) anyPerson ten percent or more of whose outstanding voting securities are directlyor indirectly owned, controlled or held, with the power to vote, by such otherPerson; (iii) any Person directly or indirectly controlling, controlled by orunder common control with such other Person; (iv) any executive officer,director, trustee or general partner of such other Person; and (v) any legalentity for which such Person acts as an executive officer, director, trustee orgeneral partner.1.8 “AGREEMENT” means this Agreement of Limited Partnership of NNNHealthcare/Office REIT Holdings, L.P., as originally executed and as amended,modified, supplemented or restated from time to time, as the context requires.1.9 “APPRAISED VALUE” means the value of the Partnership Assets as determined byan appraisal made by an Independent Appraiser.1.10 “ARTICLES OF INCORPORATION” means the General Partner’s Articles ofIncorporation, filed with the Maryland State Department of Assessments andTaxation, or other organizational document governing the General Partner, asamended, modified, supplemented or restated from time to time.1.11 “ASSIGNEE” means a Person to whom one or more Partnership Units have beentransferred in a manner permitted under this Agreement, but who has not become aSubstituted Limited Partner, and who has the rights set forth in Section 11.5.1.12 “AVAILABLE OPERATING CASH” means the cash flows derived by the Partnershipfrom the operation of the Partnership’s business (other than any Net SalesProceeds or Capital Contributions) before any deduction for depreciation oramortization and after deduction of: (a) all operating costs and expenses including taxes; (b) all payments of principal, interest and other charges in respect of anyPartnership indebtedness; -2- (c) all expenditures for capital improvements to the Partnership assets orproperty; and (d) all reserves, whether for working capital, debt repayment, newportfolio investments or otherwise (including for the redemption of PartnershipUnits) that are established by the General Partner in the exercise of its soleand absolute discretion.1.13 “BUSINESS DAY” means any day except a Saturday, Sunday or other day onwhich commercial banks in Los Angeles, California are authorized or required bylaw to close.1.14 “CAPITAL ACCOUNT” has the meaning set forth in Section 4.8.1.15 “CAPITAL CONTRIBUTION” means, with respect to any Partner, any cash, cashequivalents or the fair market value of Contributed Property that such Partnercontributes or is deemed to contribute to the Partnership pursuant to Article 4.1.16 “CARRYING VALUE” means (a) with respect to a Contributed Property, the fairmarket value of such Contributed Property at the time such property iscontributed, as determined by the General Partner and agreed to by thecontributing partner, without reduction for any liabilities either assumed bythe Partnership upon such contribution or to which such property was subjectwhen contributed, reduced (but not below zero) by all Depreciation with respectto such property charged to the Partners’ Capital Accounts, and (b) with respectto any other Partnership Asset, the adjusted basis of such Partnership Asset forFederal income tax purposes, all as of the time of determination; except thatthe Carrying Values of all assets may, at the discretion of the general Partner,be adjusted to equal their respective fair market values (as determined by theGeneral Partner), in accordance with the rules set forth in Treasury RegulationsSection 1.704-1(b)(2)(iv)(f), as provided for in Section 4.8.1.17 “CASH AMOUNT” means an amount of cash equal to the Value of the REIT StockAmount on the Valuation Date.1.18 “CERTIFICATE” means the Certificate of Limited Partnership of thePartnership, filed on April ___, 2006, as amended, restated, supplemented orotherwise modified from time to time as herein provided in accordance with theAct.1.19 “CODE” means the Internal Revenue Code of 1986, as amended from time totime, and any subsequent Federal law of similar import, and, to the extentapplicable, any Treasury Regulations promulgated thereunder.1.20 “COMMON STOCK” means a share of the common stock of the General Partner,par value $.01 per share. Common Stock may be issued in one or more classes orseries in accordance with the terms of the Articles of Incorporation. If thereis more than one class or series of Common Stock, the term “Common Stock” shall,as the context requires, be deemed to refer to the class or series of CommonStock that correspond to the class or series of Partnership Units for which thereference to Common Stock is made.1.21 “CONSENT” means the consent or approval of a proposed action by a Partnergiven in accordance with Section 14.2. -3-1.22 “CONSENT OF THE OUTSIDE LIMITED PARTNERS” means the Consent of the OutsideLimited Partners holding a number of Partnership Units greater than fiftypercent (50%) of the aggregate Partnership Units held by all Outside LimitedPartners.1.23 “CONTRIBUTED PROPERTY” means each property or other asset (but excludingcash and cash equivalents), in such form as may be contributed by a Partner tothe Partnership as permitted by the Act.1.24 “DEPRECIATION” means, for each Fiscal Year, an amount equal to thedepreciation, amortization or other cost recovery deduction allowable withrespect to an asset for such year or other period for Federal income taxpurposes; provided, that if the Carrying Value of an asset differs from itsadjusted basis for Federal income tax purposes at the beginning of any such yearor other period, Depreciation shall be determined in the manner described inTreasury Regulations Section 1.704-1(b)(2)(iv)(g)(3) or 1.704-3(d)(2), whicheveris applicable, and if such asset has a zero adjusted tax basis, Depreciationshall be an amount determined under any reasonable method selected by theGeneral Partner.1.25 “EFFECTIVE DATE” means the date of first closing of the offering of CommonStock pursuant to the Registration Statement.1.26 “8% RETURN” means, with respect to the General Partner, an amountcalculated like simple interest at the rate of eight percent (8%) per annumcalculated on the varying daily balances of Invested Capital of the GeneralPartner during the period to which the 8% Return relates, and determined on thebasis of a 360-day year/30-day month, cumulative for the period for which such8% Return is being determined.1.27 “8% RETURN ACCOUNT” means, with respect to the General Partner, as of anyrelevant date, an amount equal to the excess of (i) the 8% Return that hasaccrued with respect to the Invested Capital of the General Partner through suchdate, over (ii) the sum of (A) the cumulative distributions of AvailableOperating Cash and Net Sales Proceeds made to the General Partner prior to suchrelevant date pursuant to Section 5.1 hereof, and (B) the cumulative amountspaid to the General Partner in redemption of its Partnership Units pursuant toSection 8.6(g) as of such date, other than such distributions and payments thatare applied to reduce the Unrecovered Contribution Account of the GeneralPartner. All amounts distributed and paid to the General Partner pursuant toSections 5.1 and 8.6(g) shall first be applied to reduce the UnrecoveredContribution Account of the General Partner until the balance of suchUnrecovered Contribution Account equals zero ($0), and then shall be applied toreduce the 8% Return Account of the General Partner.1.28 “ENTITY” means any general partnership, limited liability company,proprietorship, corporation, joint venture, joint-stock company, limitedpartnership, limited liability partnership, business trust, firm, trust, estate,governmental entity, cooperative, association or other foreign or domesticenterprise.1.29 “ERISA” means the Employee Retirement Income Security Act of 1974, asamended from time to time (or any corresponding provisions of succeeding laws).1.30 “FISCAL YEAR” means the fiscal year of the Partnership and shall be thesame as its taxable year, which shall be the calendar year unless otherwisedetermined by the General Partner in accordance with the Code. -4-1.31 “GAAP” means United States generally accepted accounting principles, as ineffect from time to time.1.32 “GENERAL PARTNER” means NNN Healthcare/Office REIT, Inc., a Marylandcorporation, and any successor as general partner of the Partnership.1.33 “GENERAL PARTNER INTEREST” means a Partnership Interest held by the GeneralPartner, in its capacity as general partner. A General Partner Interest may beexpressed as a number of Partnership Units.1.34 “INCAPACITY” or “INCAPACITATED” means: (a) as to any individual Partner, death, total physical disability or entryby a court of competent jurisdiction adjudicating him incompetent to manage hisperson or his estate; (b) as to any corporation that is a Partner, the filing of a certificate ofdissolution, or its equivalent, for the corporation or the revocation of itscharter; (c) as to any partnership that is a Partner, the dissolution andcommencement of winding up of the partnership; (d) as to any estate that is a Partner, the distribution by the fiduciaryof the estate’s entire interest in the Partnership; (e) as to any trustee of a trust that is a Partner, the termination of thetrust (but not the substitution of a new trustee); or (f) as to any Partner, the bankruptcy of such Partner, which shall bedeemed to have occurred when: (i) the Partner commences a voluntary proceeding seeking liquidation, reorganization or other relief under any bankruptcy, insolvency or other similar law now or hereafter in effect; (ii) the Partner is adjudged as bankrupt or insolvent, or a final and nonappealable order for relief under any bankruptcy, insolvency or similar law now or hereafter in effect has been entered against the Partner; (iii) the Partner executes and delivers a general assignment for the benefit of the Partner’s creditors; (iv) the Partner files an answer or other pleading admitting or failing to contest the material allegations of a petition filed against the Partner in any proceeding of the nature described in clause (ii) above; (v) the Partner seeks, consents to or acquiesces in the appointment of a trustee, receiver or liquidator for the Partner or for all or any substantial part of the Partner’s assets; (vi) any proceeding seeking liquidation, reorganization or other relief of or against such Partner under any bankruptcy, insolvency or other similar law now or -5- hereafter in effect has not been dismissed within one hundred twenty (120) days after the commencement thereof; (vii) the appointment without the Partner’s consent or acquiescence of a trustee, receiver or liquidator has not been vacated or stayed within ninety (90) days of such appointment; or (viii) an appointment referred to in clause (vii) which has been stayed is not vacated within ninety (90) days after the expiration of any such stay.1.35 “INDEMNITEE” MEANS (a) any Person made a party to a proceeding by reason of its status as: (i) the General Partner, (ii) a Limited Partner, (iii) the Advisor, (iv) a director, trustee, manager, member or officer of the Partnership, the General Partner or the Advisor, or (v) a director, trustee, manager, member or officer of any other Entity, serving in such capacity at the request of the Partnership, the General Partner or the Advisor, acting on behalf of the Partnership or the General Partner, or (b) such other Persons (including Affiliates of the General Partner) as the General Partner may designate from time to time (whether before or after the event giving rise to potential liability), in its sole and absolute discretion.1.36 “INDEPENDENT APPRAISER” means an appraiser of real estate with no materialcurrent or prior business or personal relationship with the Advisor, thePartnership, the General Partner or the directors of the General Partner, that,in the determination of the General Partner, is qualified to appraise realestate by virtue of being engaged to a substantial extent in the business ofrendering opinions regarding the value of assets of the type held by thePartnership. Membership in a nationally recognized appraisal society such as theAmerican Institute of Real Estate Appraisers or the Society of Real EstateAppraisers shall be conclusive evidence of such qualification.1.37 “INITIAL LIMITED PARTNER” means Triple Net Properties, LLC.1.38 “INVESTED CAPITAL” means, with respect to the General Partner, as of anyrelevant date, an amount equal to the excess of (i) the aggregate amount of cashcontributed or deemed contributed by the General Partner to the Partnership fromthe gross proceeds of the issuance by the General Partner of REIT Stock or otherequity Securities pursuant to Article 4 hereof, over (ii) the cumulative amountspaid to the General Partner in redemption of its Partnership Units pursuant toSection 8.6(g) as of such date.1.39 “IRS” shall mean the Internal Revenue Service of the United States. -6-1.40 “JOINT VENTURE” mean those joint venture or partnership arrangements inwhich the Partnership or any of its subsidiaries is a co-venturer or generalpartner established to acquire or hold Assets.1.41 “LIEN” means any lien, security interest, mortgage, deed of trust, charge,claim, encumbrance, pledge, option, right of first offer or first refusal andany other right or interest of others of any kind or nature, actual orcontingent, or other similar encumbrance of any nature whatsoever.1.42 “LIMITED PARTNER” means, prior to the admission of the first AdditionalLimited Partner to the Partnership, the Initial Limited Partner, and thereafterany Person named as a limited partner of the Partnership in Exhibit A, as suchExhibit may be amended from time to time, upon the execution and delivery bysuch Person of an additional limited partner signature page, including anyAdditional Limited Partner or Substituted Limited Partner in each case, in suchPerson’s capacity as a limited partner of the Partnership.1.43 “LIMITED PARTNER INTEREST” means a Partnership Interest of a LimitedPartner in the Partnership. A Limited Partner Interest may be expressed as anumber of Partnership Units.1.44 “LIQUIDATING EVENT” has the meaning set forth in Section 13.1 hereof.1.45 “LIQUIDATOR” has the meaning set forth in Section 13.2.1.46 “LISTED MARKET PRICE” means, with respect to a share of REIT Stock for aspecified trading day, shall be the last reported sale price on such day or, ifno sale takes place on such day, the average of the closing bid and asked priceson such day, as reported on the national securities exchange on which the REITStock is listed for trading.1.47 “LISTING AMOUNT” has the meaning set forth in Section 5.1(d).1.48 “LISTING EVENT” means the listing of the REIT Stock on a nationalsecurities exchange.1.49 “LISTING DATE” means the date on which a Listing Event occurs.1.50 “MARKET VALUE” means the market value of the REIT Stock as of the date of aListing Event, which shall be equal to the product of (a) the number of sharesof REIT Stock issued and outstanding at the time of the Listing Event,multiplied by (b) the average Listed Market Price of a share of REIT Stock forthe 30 trading days beginning on the 180th day after the Listing Date.1.51 “MORTGAGE” means in connection with mortgage financing provided, investedin, participated in or purchased by the Partnership, all of the notes, deeds oftrust, security interests or other evidences of indebtedness or obligations,which are secured or collateralized by Real Property owned by the borrowersunder such notes, deeds of trust, security interests or other evidences ofindebtedness or obligations.1.52 “NASAA GUIDELINES” means the North American Securities AdministratorsAssociation, Inc. Statement of Policy Regarding Real Estate Investment Trusts.1.53 “NET ASSETS” means the total assets of the Partnership (other thanintangibles) at cost, before deducting depreciation, reserves for bad debts orother non-cash reserves, less total liabilities, calculated quarterly by thePartnership on a basis consistently applied.. -7-1.54 “NET SALES PROCEEDS” means in the case of a transaction described in clause(i)(A) of the definition of Sale, the proceeds of any such transaction less theamount of selling expenses incurred by or on behalf of the Partnership,including all real estate commissions, closing costs and legal fees andexpenses. In the case of a transaction described in clause (i)(B) of thedefinition of Sale, Net Sales Proceeds means the proceeds of any suchtransaction less the amount of selling expenses incurred by or on behalf of thePartnership, including any legal fees and expenses and other selling expensesincurred in connection with such transaction. In the case of a transactiondescribed in clause (i)(C) of the definition of Sale, Net Sales Proceeds meansthe proceeds of any such transaction actually distributed to the Partnershipfrom the Joint Venture less the amount of any selling expenses, including legalfees and expenses incurred by or on behalf of the Partnership (other than thosepaid by the Joint Venture). In the case of a transaction or series oftransactions described in clause (i)(D) of the definition of Sale, Net SalesProceeds means the proceeds of any such transaction (including the aggregate ofall payments under a Mortgage on or in satisfaction thereof other than regularlyscheduled interest payments) less the amount of selling expenses incurred by oron behalf of the Partnership, including all commissions, closing costs and legalfees and expenses. In the case of a transaction described in clause (i)(E) ofthe definition of Sale, Net Sales Proceeds means the proceeds of any suchtransaction less the amount of selling expenses incurred by or on behalf of thePartnership, including any legal fees and expenses and other selling expensesincurred in connection with such transaction. In the case of a transactiondescribed in clause (ii) of the definition of Sale, Net Sales Proceeds means theproceeds of such transaction or series of transactions less all amountsgenerated thereby which are reinvested in one or more Partnership Assets within180 days thereafter and less the amount of any real estate commissions, closingcosts, and legal fees and expenses and other selling expenses incurred by orallocated to the Partnership in connection with such transaction or series oftransactions. Net Sales Proceeds shall also include any amounts that the GeneralPartner determines, in its discretion, to be economically equivalent to theproceeds of a Sale. Net Sales Proceeds shall not include (i) any reservesestablished by the General Partner, in its sole discretion and; (ii) the receiptby the Partnership of Capital Contributions.1.55 “NONRECOURSE DEDUCTIONS” has the meaning set forth in Treasury RegulationsSections 1.704-2(b)(1) and 1.704-2(c).1.56 “NONRECOURSE LIABILITIES” has the meaning set forth in Treasury RegulationsSection 1.704-2(b)(3).1.57 “NOTICE OF REDEMPTION REQUEST” means a notice of redemption requestsubstantially in the form of Exhibit B attached hereto.1.58 “OUTSIDE LIMITED PARTNERS” means the Limited Partners, excluding theInitial Limited Partner and any Limited Partner that is an Affiliate of theGeneral Partner or the Initial Limited Partner.1.59 “PARTNER” means a General Partner or a Limited Partner, and “Partners”means the General Partner and the Limited Partners, collectively.1.60 “PARTNER MINIMUM GAIN” means an amount, with respect to each Partner’sPartner Nonrecourse Debt, equal to the Partnership Minimum Gain that wouldresult if such Partner Nonrecourse Debt were treated as a Nonrecourse Liability,determined in accordance with Treasury Regulations Section 1.704-2(i)(3). -8-1.61 “PARTNER NONRECOURSE DEBT” has the meaning set forth in TreasuryRegulations Section 1.704-2(b)(4).1.62 “PARTNER NONRECOURSE DEDUCTIONS” has the meaning set forth in TreasuryRegulations Section 1.704-2(i)(2), and the amount of Partner NonrecourseDeductions with respect to a Partner Nonrecourse Debt for a Partnership taxableyear shall be determined in accordance with the rules of Treasury RegulationsSection 1.704-2(i)(2).1.63 “PARTNERSHIP” means NNN Healthcare/Office REIT Holdings, L.P., and anysuccessor thereto.1.64 “PARTNERSHIP ASSET” means the interest of the Partnership in any Entity orsecurity (whether in corporate securities, equity, debt or hybrid securities,partnership or joint venture interests, other contractual rights or otherwise),or any other Real Estate Assets or other assets owned, directly or indirectly,by the Partnership, as determined by the General Partner.1.65 “PARTNERSHIP INTEREST” means the entire ownership interest of a Partner inthe Partnership at any particular time which represents a Capital Contributionby such Partner and which includes the right of such Partner to any and allbenefits to which such Partner may be entitled as provided in this Agreement,together with the obligations of such Partner to comply with all terms andprovisions of this Agreement. A Partnership Interest may be expressed as anumber of Partnership Units.1.66 “PARTNERSHIP MINIMUM GAIN” has the meaning set forth in TreasuryRegulations Section 1.704-2(b)(2), and the amount of Partnership Minimum Gain,as well as any net increase or decrease in a Partnership Minimum Gain, for aPartnership taxable year shall be determined in accordance with the rules ofTreasury Regulations Section 1.704-2(d).1.67 “PARTNERSHIP RECORD DATE” means the record date established by the GeneralPartner for the distribution by the Partnership of Available Operating Cash, NetSales Proceeds or other Partnership Assets pursuant to Section 5.1 hereof, whichrecord date shall be the same as the record date established by the GeneralPartner for a distribution to its stockholders of some or all of its portion ofsuch distribution by the Partnership.1.68 “PARTNERSHIP UNIT” means a unit of Partnership Interest with the rights,powers and duties set forth herein, designated as such on Exhibit A andexpressed in the number set forth on Exhibit A, as such exhibit may be amendedfrom time to time.1.69 “PERCENTAGE INTEREST” means, as to each Partner, the percentage determinedby dividing the total number of Partnership Units owned by such Partner by theaggregate number of Partnership Units then issued and outstanding, as set forthon Exhibit A, as such exhibit may be amended from time to time.1.70 “PERMITTED TRANSFEREE” means with respect to a Person, (a) any Affiliate ofsuch Person, (b) the spouse of such Person or any ancestor, descendent orsibling of such Person or of the spouse of such Person, or (c) any trust for thebenefit of such Person or any other person described in clause (b) of thisSection 1.69.1.71 “PERSON” means any individual or Entity, and the heirs, executors,administrators, legal representatives, successors and assigns of such individualor Entity where the context so permits. -9-1.72 “PROFITS” and “LOSSES” has the meaning set forth in Section 6.2(f).1.73 “PROHIBITED TRANSFEREE” means any Person who is a: (a) person or entity who is a “designated national,” “specially designatednational,” “specially designated terrorist,” “specially designated globalterrorist,” “foreign terrorist organization,” or “blocked person” within thedefinitions set forth in the Foreign Assets Control Regulations of the UnitedStates Treasury Department, 31 C.F.R., Subtitle B, Chapter V, as amended; (b) person acting on behalf of, or an entity owned or controlled by, anygovernment against whom the United States maintains economic sanctions orembargoes under the Regulations of the United States Treasury Department, 31C.F.R., Subtitle B, Chapter V, as amended, including, but not limited to, the”Government of Sudan,” the “Government of Iran,” the “Government of Cuba or anyCuban national”; or (c) person or entity subject to restrictions imposed by the followingstatutes or Regulations and Executive Orders issued thereunder: the Trading withthe Enemy Act, 50 U.S.C. app. Sections 1 et. seq., the Iraq Sanctions Act, Pub.L. 101-513, Title V, Sections 586 to 586J, 104 Stat. 2047, the NationalEmergencies Act, 50 U.S.C. Sections 1601 et. seq., the Antiterrorism andEffective Death Penalty Act of 1996, Pub. L. 104-132, 110 Stat. 1214-1319, theInternational Emergency Economic Powers Act, 50 U.S.C. Sections 1701 et seq.,the United Nations Participation Act, 22 U.S.C. Section 287c, the InternationalSecurity and Development Cooperation Act, 22 U.S.C. Section 2349aa-9, theNuclear Proliferation Prevention Act of 1994, Pub. L. 103-236, 108 Stat. 507,the Foreign Narcotics Kingpin Designation Act, 21 U.S.C. Sections 1901 et. seq.,the Iran and Libya Sanctions Act of 1996, Pub. L. 104-172, 110 Stat. 1541, theCuban Democracy Act, 22 U.S.C. Sections 6001 et seq., the Cuban Liberty andDemocratic Solidarity Act, 22 U.S.C. Sections 6021-91, and the ForeignOperations, Export Financing and Related Programs Appropriations Act, 1997, Pub.L. 104-208, 110 Stat. 3009-172, or any other law of similar import as to anynon-U.S. country, person or entity, as each such Act or law has been or may beamended, adjusted, modified, or reviewed from time to time.1.74 “PROPERTY” OR “PROPERTIES” means, as the context requires, any, or all,respectively, of the Real Property acquired by the Partnership, directly orindirectly through joint venture arrangements or other partnership or investmentinterests.1.75 “REAL ESTATE ASSETS” means unimproved and improved real property, realestate-related assets and any direct or indirect interest therein (including,without limitation, fee or leasehold interests, options, leases, partnership andjoint venture interests, equity and debt securities of entities that own realestate, first or second mortgages on real property, mezzanine loans secured byjunior liens on real property, preferred equity interests secured by a propertyowner’s interest in real property and other contractual rights in real estate).1.76 “REAL PROPERTY” means land, rights in land (including leasehold interests),and any buildings, structures, improvements, furnishings, fixtures and equipmentlocated on or used in connection with land and rights or interests in land.1.77 “REDEEMING PARTNER” has the meaning set forth in Section 8.6.1.78 “REDEMPTION AMOUNT” means either the Cash Amount or the REIT Stock Amount,as determined by the General Partner in its sole and absolute discretion. -10-1.79 “REDEMPTION RIGHT” has the meaning set forth in Section 8.6.1.80 “REGISTRATION STATEMENT” means the Registration Statement on Form S-11filed by the General Partner with the Securities and Exchange Commission onApril ___, 2006, and any amendments thereto made at any time.1.81 “REIT” means a “real estate investment trust” as defined under Section 856of the Code.1.82 “REIT NOTICE” has the meaning set forth in Section 8.6(g).1.83 “REIT REQUIREMENTS” has the meaning set forth in Section 5.2.1.84 “REIT STOCK” means the Common Stock and all other shares of capital stockof the General Partner.1.85 “REIT STOCK AMOUNT” means a number of shares of REIT Stock equal to thenumber of Partnership Units offered for redemption by a Redeeming Partner;provided that in the event that the General Partner issues to all holders ofREIT Stock rights, options, warrants, or convertible or exchangeable securitiesentitling stockholders of the General Partner to acquire REIT Stock, or anyother securities or property (collectively, the “rights”), then the REIT StockAmount shall also include such rights that a holder of that number of shares ofREIT Stock would be entitled to receive.1.86 “SALE” means (i) any transaction or series of transactions whereby: (A) thePartnership directly or indirectly (except as described in other subsections ofthis definition) sells, grants, transfers, conveys, or relinquishes itsownership of any Property or portion thereof, including the lease of anyProperty consisting of a building only, and including any event with respect toany Property which gives rise to a significant amount of insurance proceeds orcondemnation awards; (B) the Partnership directly or indirectly (except asdescribed in other subsections of this definition) sells, grants, transfers,conveys, or relinquishes its ownership of all or substantially all of theinterest of the Partnership in any Joint Venture in which it is a co-venturer orpartner; (C) any Joint Venture directly or indirectly (except as described inother subsections of this definition) in which the Partnership as a co-ventureror partner sells, grants, transfers, conveys, or relinquishes its ownership ofany Property or portion thereof, including any event with respect to anyProperty which gives rise to insurance claims or condemnation awards; (D) thePartnership directly or indirectly (except as described in other subsections ofthis definition) sells, grants, conveys or relinquishes its interest in anyMortgage or portion thereof (including with respect to any Mortgage, allpayments thereunder or in satisfaction thereof other than regularly scheduledinterest payments) of amounts owed pursuant to such Mortgage and any event whichgives rise to a significant amount of insurance proceeds or similar awards; or(E) the Partnership directly or indirectly (except as described in othersubsections of this definition) sells, grants, transfers, conveys, orrelinquishes its ownership of any other Partnership Asset not previouslydescribed in this definition or any portion thereof, but (ii) not including anytransaction or series of transactions specified in clause (i) (A) through (E)above in which the proceeds of such transaction or series of transactions arereinvested by the Partnership in one or more Partnership Assets within 180 daysthereafter, and not including the receipt by the Partnership of CapitalContributions.1.87 “SECURITIES” has the meaning set forth in Section 4.3(a). -11-1.88 “SECURITIES ACT” means the Securities Act of 1933, as amended.1.89 “SPECIFIED REDEMPTION DATE” means the tenth (10th) Business Day afterreceipt by the General Partner of a Notice of Redemption Request (or, in thecase of the General Partner exercising the Redemption Right, after the date ofthe General Partner’s receipt of a REIT Notice).1.90 “STOCK INCENTIVE PLANS” means, collectively, any and all plans adopted fromtime to time by the General Partner pursuant to which REIT Stock is issued, oroptions to acquire REIT Stock are granted, to employees or directors of theGeneral Partner, employees of the Partnership or employees of their respectiveAffiliates in consideration for services or future services.1.91 “SUBSIDIARY” means, with respect to any Person, any Entity of which amajority of the voting power or the voting equity securities, and/or theoutstanding equity interests (whether or not voting), is owned, directly orindirectly, by such Person.1.92 “SUBSTITUTED LIMITED PARTNER” means a Person who is admitted as a LimitedPartner to the Partnership pursuant to Section 11.4 hereof.1.93 “TERMINATING SALE TRANSACTION” means any sale or other disposition (otherthan a deemed disposition pursuant to Code Section 708(b)(1)(B) and the TreasuryRegulations thereunder) of all or substantially all of the assets of thePartnership or a related series of transactions that, taken together, result inthe sale or other disposition of all or substantially all of the assets of thePartnership.1.94 “TERMINATION AMOUNT” has the meaning set forth in Section 5.1(e).1.95 “TERMINATION EVENT” means any termination of the Advisor as advisor to thePartnership and the General Partner under the terms of the Advisory Agreement,other than any termination for “Cause” (as defined in the Advisory Agreement)and other than any termination of the Advisory Agreement due to the occurrenceof a Listing Event.1.96 “TERMINATION NOTE” has the meaning set forth in Section 5.1(e).1.97 “TRANSFER” means to give, sell, assign, pledge, hypothecate, devise,bequeath, or otherwise dispose of, transfer, or permit to be transferred, duringlife or at death. The word “Transfer,” when used as a noun, shall mean anyTransfer transaction.1.98 “TREASURY REGULATIONS” means the Federal income tax regulations, includingany temporary or proposed regulations, promulgated under the Code, as suchTreasury Regulations may be amended from time to time (it being understood thatall references herein to specific sections of the Treasury Regulations shall bedeemed also to refer to any corresponding provisions of succeeding TreasuryRegulations).1.99 “UNRECOVERED CONTRIBUTION ACCOUNT” means, with respect to the GeneralPartner, as of any relevant date, the excess of (i) the aggregate amount of cashcontributed or deemed contributed by the General Partner to the Partnershippursuant to the provisions of Article 4 as of such date, over (ii) the sum of(A) the cumulative distributions of Available Operating Cash and Net SalesProceeds made to the General Partner prior to such relevant date pursuant toSection 5.1 hereof, and (B) the cumulative amounts paid to the General Partnerin redemption of its Partnership Units pursuant to Section 8.6(g) as of suchdate. All amounts distributed and paid to -12-the General Partner pursuant to Sections 5.1 and 8.6(g) shall first be appliedto reduce the Unrecovered Contribution Account of the General Partner until thebalance of such Unrecovered Contribution Account equals zero ($0), and thenshall be applied to reduce the 8% Return Account of the General Partner.1.100 “VALUATION DATE” means the date of receipt by the General Partner of aNotice of Redemption Request (or, in the case of the General Partner exercisingthe Redemption Right, the date of the General Partner’s receipt of a REITNotice) or, if such date is not a Business Day, the first Business Daythereafter.1.101 “VALUE” means, with respect to a share of REIT Stock, (a) if REIT Stock istraded on a national securities exchange or otherwise traded over-the-counter,the average of the daily Market Price (as defined below) for shares of REITStock for the ten (10) consecutive trading days immediately preceding theValuation Date, or (b) if REIT Stock is not traded in a manner described inclause (a), the value of a share of REIT Stock as determined by the GeneralPartner acting in good faith on the basis of such quotations and otherinformation as it considers, in its reasonable judgment, appropriate. The”Market Price” for each such trading day shall be (i) the last reported saleprice on such day or, if no sale takes place on such day, the average of theclosing bid and asked prices on such day, as reported by a reliable quotationsource designated by the General Partner; or (ii) if no such last reported saleprice or closing bid and asked prices are available, the average of the reportedhigh bid and low asked prices on such day, as reported by a reliable quotationsource designated by the General Partner, or (iii) if there shall be no bid andasked prices on such day, the average of the high bid and low asked prices, asso reported, on the most recent day (not more than ten (10) days prior to thedate in question) for which prices have been so reported. In the event the REITStock Amount includes rights that a holder of REIT Stock would be entitled toreceive, then the Value of such rights shall be determined by the GeneralPartner acting in good faith on the basis of such quotations and otherinformation as it considers, in its reasonable judgment, appropriate. ARTICLE 2 ORGANIZATIONAL MATTERS2.1 FORMATION. The Partnership is a limited partnership organized pursuant to theprovisions of the Act and upon the terms and conditions set forth in thisAgreement. Except as expressly provided herein to the contrary, the rights andobligations of the Partners and the administration and termination of thePartnership shall be governed by the Act.2.2 NAME The name of the Partnership is NNN Healthcare/Office REIT Holdings, L.P.The Partnership’s business may be conducted under such name or under any othername or names deemed advisable by the General Partner, including the name of theGeneral Partner or any Affiliate thereof. The words “Limited Partnership,””L.P.,” “Ltd.” or similar words or letters shall be included in thePartnership’s name where necessary for the purposes of complying with the lawsof any jurisdiction that so requires. The General Partner, acting in its soleand absolute discretion without the Consent of any Limited Partner, may changethe name of the Partnership. The General Partner shall notify the LimitedPartners of any such name change in the next regular communication to theLimited Partners. Upon termination of the Partnership or the termination,resignation or withdrawal of the Initial Limited Partner as the Advisor, all ofthe Partnership’s -13-right, title and interest in and to the use of the name “NNN Healthcare/OfficeREIT Holdings, L.P. and any variation thereof, shall become the property of theInitial Limited Partner, and if requested to do so by the Initial LimitedPartner, the Partnership shall change the name of the Partnership to exclude theterm “NNN.” Neither the Partnership nor any Limited Partner shall have any rightor interest in and to the use of any such name or mark.2.3 REGISTERED OFFICE AND AGENT The address of the registered office of the Partnership in the State ofDelaware shall be c/o The Corporation Trust Company, Corporation Trust Center,1209 Orange Street, Suite 400, Wilmington, New Castle County, DE 19801, or suchother place as may be designated from time to time by the General Partner. Thename of the registered agent for service of process on the Partnership in theState of Delaware at such address shall be The Corporation Trust Company,Corporation Trust Center, 1209 Orange Street, Suite 400, Wilmington, New CastleCounty, DE 19801, or such other Person as may be designated from time to time bythe General Partner.2.4 PRINCIPAL PLACE OF BUSINESS The Partnership may maintain offices at such other place or places withinor outside the State of Delaware as the General Partner deems advisable. Theprincipal office of the Partnership shall be 1551 North Tustin Avenue, Suite 200Santa Ana, CA 92705, or such other place as the General Partner may from time totime designate by notice to the Limited Partners.2.5 TERM AND TERMINATION The term of the Partnership shall commence on the date hereof and shallcontinue until December 31, 2036, unless the Partnership is dissolved soonerpursuant to the provisions of Article 13 or as otherwise provided by law.2.6 POWER OF ATTORNEY (a) Each Limited Partner and each Assignee who accepts Partnership Units(or any other Partnership Interest or any rights, benefits or privilegesassociated therewith) is deemed to irrevocably constitute and appoint theGeneral Partner, any Liquidator and authorized officers and attorneys-in-fact ofeach, and each such Person acting singly, in each case with full power ofsubstitution, as its true and lawful agent and attorney-in-fact, with full powerand authority in its name, place and stead to: (i) execute, swear to, acknowledge, deliver, file and record in the appropriate public offices: (A) all certificates, documents and other instruments (including, without limitation, this Agreement and the Certificate and all amendments or restatements thereof) that the General Partner or the Liquidator deems appropriate or necessary to form, qualify or continue the existence or qualification of the Partnership as a limited partnership (or a partnership in which the Limited Partners have limited liability) in the State of Delaware and in all other jurisdictions in which the Partnership may or plans to conduct business or own property, including, without limitation, any documents necessary or advisable to convey any Contributed Property to the Partnership; -14- (B) all instruments that the General Partner or any Liquidator deems appropriate or necessary to reflect any amendment, change, modification or restatement of this Agreement in accordance with its terms; (C) all conveyances and other instruments or documents that the General Partner or any Liquidator deems appropriate or necessary to reflect the dissolution and liquidation of the Partnership pursuant to the terms of this Agreement, including, without limitation, a certificate of cancellation; (D) all instruments relating to the admission, withdrawal, removal or substitution of any Partner pursuant to, or other events described in, Article 11, 12 or 13 hereof or any Capital Contribution of any Partner; (E) all certificates, documents and other instruments relating to the determination of the rights, preferences and privileges of Partnership Interests; (F) all amendments to this Agreement as provided in Article 14 hereof; and (G) all other instruments that may be required by law to be filed on behalf of or relating to the Partnership and that are not inconsistent with this Agreement; and (ii) execute, swear to, seal, acknowledge and file all ballots, consents, approvals, waivers, certificates and other instruments appropriate or necessary, in the sole and absolute discretion of the General Partner or any Liquidator, to make, evidence, give, confirm or ratify any vote, consent, approval, agreement or other action which is made or given by the Partners hereunder or is consistent with the terms of this Agreement or appropriate or necessary, in the sole discretion of the General Partner or any Liquidator, to effectuate the terms or intent of this Agreement. Nothing contained herein shall be construed as authorizing the General Partner or any Liquidator to amend this Agreement except in accordance with Article 14 hereof or as may be otherwise expressly provided for in this Agreement. (b) The foregoing power of attorney is hereby declared to be irrevocableand a power coupled with an interest, in recognition of the fact that each ofthe Partners will be relying upon the power of the General Partner and anyLiquidator to act as contemplated by this Agreement in any filing or otheraction by it on behalf of the Partnership, and it shall survive and not beaffected by the subsequent Incapacity of any Limited Partner or Assignee and/orthe Transfer of all or any portion of such Limited Partner’s or Assignee’sPartnership Units and shall extend to such Limited Partner’s or Assignee’sheirs, successors, assigns and personal representatives. (c) Each such Limited Partner or Assignee hereby agrees to be bound by anyrepresentation made by the General Partner or any Liquidator, acting in goodfaith pursuant to such power of attorney, and each such Limited Partner orAssignee hereby waives any and all defenses which may be available to contest,negate or disaffirm the action of the General Partner or any Liquidator, takenin good faith under such power of attorney. (d) Each Limited Partner or Assignee shall execute and deliver to theGeneral Partner or the Liquidator, within fifteen (15) days after receipt of theGeneral Partner’s or -15-Liquidator’s request therefor, such further designation, powers of attorney andother instruments as the General Partner or the Liquidator, as the case may be,deems necessary to effectuate this Agreement and the purposes of thePartnership. (e) Any Person dealing with the Partnership may conclusively presume andrely upon the fact that any instrument referred to in this Section 2.6, executedby the General Partner or the Liquidator acting as attorney-in-fact, isauthorized by and binding on the Partnership, without further inquiry.2.7 EFFECTIVENESS OF THIS AGREEMENT This Agreement shall govern the operations of the Partnership and therights and restrictions applicable to the Partners, to the extent permitted bylaw. Pursuant to Section 17-101(12) of the Act, all Persons who become holdersof Partnership Interests shall be bound by the provisions of this Agreement. Theexecution by a Person of this Agreement and acceptance thereof by the GeneralPartner in accordance with the terms of this Agreement or the receipt ofPartnership Interests by a Person as a successor or assign of an existingPartner and the consent of the General Partner to the admission of such Personas a Substituted Limited Partner in accordance with the terms of this Agreementshall be deemed to constitute a request that the records of the Partnershipreflect such admission, and shall be deemed to be a sufficient act to complywith the requirements of Section 17-101(12) of the Act and to so cause thatPerson to become a Partner as of the date of acceptance of its CapitalContribution by the Partnership and to bind that Person to the terms andconditions of this Agreement (and to entitle that Person to the rights of aPartner hereunder). ARTICLE 3 PURPOSE AND POWERS3.1 PURPOSE AND BUSINESS The purpose and nature of the business to be conducted by the Partnershipis to conduct any business that may be lawfully conducted by a limitedpartnership organized pursuant to the Act including, without limitation, toengage in the following activities: (a) to acquire, hold, own, develop, construct, improve, maintain, operate,sell, lease, transfer, encumber, convey, exchange and otherwise dispose of ordeal with Real Estate Assets; (b) to acquire, hold, own, develop, construct, maintain, operate, sell,lease, transfer, encumber, convey, exchange and otherwise dispose of or dealwith other real and personal property of all kinds; (c) acquire own, hold for investment and ultimately dispose of general andlimited partner interests, and stock, warrants, options or other equity and debtinterests in Entities, and exercise all rights and powers granted to the ownerof any such interests; (d) make any type of investment and engage in any other lawful act oractivity for which limited partnerships may be formed under the Act, and by suchstatement all lawful acts and activities shall be within the purposes of thePartnership; (e) to undertake such other activities as may be necessary, advisable,desirable or convenient to the business of the Partnership; and -16- (f) to engage in such other ancillary activities as shall be necessary ordesirable to effectuate the foregoing purposes; provided, however, that suchbusiness shall be limited to and conducted in such a manner as to permit theGeneral Partner at all times to be classified as a REIT, unless the GeneralPartner determines not to qualify as a REIT or ceases to qualify as a REIT forreasons other than the conduct of the business of the Partnership.3.2 POWERS (a) The Partnership is empowered to do any and all acts and thingsnecessary, appropriate, proper, advisable, incidental to or convenient for thefurtherance and accomplishment of the purposes and business described in Section3.1 and for the protection and benefit of the Partnership including, withoutlimitation, full power and authority to enter into, perform, and carry outcontracts of any kind, to borrow money and to issue evidences of indebtedness,whether or not secured by mortgage, trust deed, pledge or other Lien, and,directly or indirectly, to acquire, hold, own, develop, construct, improve,maintain and operate Real Estate Assets, and to sell, lease, transfer, encumber,convey, exchange and otherwise dispose of Real Estate Assets. (b) The General Partner also is empowered to do any and all acts and thingsnecessary, appropriate or advisable to ensure that the Partnership will not beclassified as a “publicly traded partnership” within the meaning of Section 7704of the Code, including, but not limited to, imposing restrictions on Transfersof Partnership Units. ARTICLE 4 CAPITAL CONTRIBUTIONS; PARTNERSHIP UNITS; ADDITIONAL FUNDS4.1 CAPITAL CONTRIBUTIONS OF THE PARTNERS (a) Initial Capital Contributions. The General Partner and the InitialLimited Partner have made or shall make on the Effective Date, the CapitalContributions as set forth on Exhibit A to this Agreement in exchange for thenumber of Partnership Units set forth opposite their names on Exhibit A. At suchtime as Additional Limited Partners are admitted to the Partnership, each suchAdditional Limited Partner shall make Capital Contributions in the amount setforth opposite such Limited Partner’s name on Exhibit A, as it shall be amendedat the time of such contribution. (b) Deemed Capital Contributions. To the extent the Partnership acquiresany property by the merger of any other Person into the Partnership or thecontribution of assets by any other Person to the Partnership, Persons whoreceive Partnership Interests in exchange for their interests in the Personmerging into or contributing assets to the Partnership shall become Partners andshall be deemed to have made Capital Contributions as provided in the applicablemerger agreement or contribution agreement and as set forth in Exhibit A, as itshall be amended to reflect such deemed Capital Contributions. (c) Partnership Units. Each Partner shall own Partnership Units in theamounts set forth for such Partner in Exhibit A and shall have a PercentageInterest in the Partnership as set forth in Exhibit A, which Percentage Interestshall be adjusted in Exhibit A from time to time by the General Partner to theextent necessary to reflect accurately redemptions, additional CapitalContributions, the issuance of additional Partnership Units or similar eventshaving an effect on -17-the number of Partnership Units held by, and the Percentage Interest of, anyPartner. Each Partnership Unit shall entitle the holder thereof to one vote onall matters on which the Partners (or any portion of the Partners) are entitledto vote under this Agreement. (d) No Additional Capital Contributions. Except as provided in Sections4.3(a) and 10.5, the Partners shall have no obligation to make any additionalCapital Contributions or provide any additional funding to the Partnership(whether in the form of loans or otherwise) and no Partner shall have anyobligation to restore any deficit that may exist in its Capital Account, eitherupon a liquidation of the Partnership or otherwise.4.2 ISSUANCE OF ADDITIONAL PARTNERSHIP INTERESTS (a) The General Partner is authorized to cause the Partnership to issueadditional Partnership Interests (or options or warrants to acquire PartnershipInterests) in the form of Partnership Units or other Partnership Interests inone or more series or classes to any Persons at any time or from time to time,on such terms and conditions as the General Partner shall establish in each casein its sole and absolute discretion subject to Delaware law, including, withoutlimitation, (i) the allocations of items of Partnership income, gain, loss,deduction and credit to each class or series of Partnership Interests, (ii) theright of each class or series of Partnership Interests to share in Partnershipdistributions, and (iii) the rights of each class or series of PartnershipInterest upon dissolution and liquidation of the Partnership; provided, that, nosuch Partnership Interests shall be issued to the General Partner unless either(A) the Partnership Interests are issued pursuant to Section 4.3, or (B) theadditional Partnership Interests are issued to all Partners holding PartnershipInterests in the same class in proportion to their respective PercentageInterests in such class. (b) Subject to the limitations set forth in Sections 4.2(a) and 4.3(a), theGeneral Partner may take such steps as it, in its sole and absolute discretion,deems necessary or appropriate to admit any Person as a Limited Partner of thePartnership in accordance with Section 12.2 or to issue any PartnershipInterests, including, without limitation, amending the Certificate, Exhibit A orany other provision of this Agreement. (c) Without limiting the foregoing, the General Partner is expresslyauthorized to cause the Partnership to issue Partnership Interests (or optionsto acquire Partnership Interests) for less than fair market value, so long asthe General Partner concludes in good faith that such issuance is in theinterest of the Partnership and the Partners (for example, and not by way oflimitation, the issuance of Partnership Units in connection with a StockIncentive Plan providing for employee purchases of REIT Stock and correspondingPartnership Units at a discount from fair market value or employee options thathave an exercise price that is less than the fair market value of the REIT Stockand corresponding Partnership Units covered by the option, either at the time ofissuance or at the time of exercise).4.3 ISSUANCE OF SECURITIES BY THE GENERAL PARTNER (a) General. The General Partner shall not issue any debt securities,preferred stock, Common Stock, any other class of REIT Stock or rights, options,warrants or other securities convertible into or exchangeable for preferredstock, Common Stock or any other class of REIT Stock (collectively,”Securities”), other than (1) as payment of the REIT Stock Amount in connectionwith a redemption of Partnership Units pursuant to Section 8.6, (2) upon theconversion, exchange or exercise of other outstanding securities of the GeneralPartner in -18-accordance with the terms of such securities, or (3) to all holders of REITStock on a pro rata basis, unless the General Partner shall: (i) in the case of REIT Stock or other equity Securities other than Securities described in clause (ii) below, (A) contribute to the Partnership the proceeds of or consideration (including any property or other non-cash assets) received upon the issuance of such Securities, and (B) receive from the Partnership in consideration for such contributions Partnership Interests with the same terms and conditions, including dividend, dividend priority and liquidation preference, as are applicable to such Securities (including, for purposes of clarification, Partnership Units in the case of any issuance of Common Stock by the General Partner); (ii) in the case of options, warrants or other rights to purchase REIT Stock, or other equity securities convertible into or exchangeable for REIT Stock, (A) contribute to the Partnership the proceeds of or consideration (including any property or other non-cash assets) received upon the issuance of such equity Securities, and (B) receive from the Partnership in consideration for such contributions a number of options, warrants or other rights to purchase Partnership Interests equal to the number of such Securities issued by the General Partner, with equivalent rights, preferences and limitations to the terms of such equity Securities; and (iii) in the case of debt securities, lend to the Partnership the proceeds of or consideration received for such Securities on the same terms and conditions, including interest rate and repayment schedule, as shall be applicable with respect to or incurred in connection with the issuance of such Securities and the proceeds of, or consideration received from, any subsequent exercise, exchange or conversion thereof (if applicable). (b) Splits. The Partnership shall (i) make a distribution in PartnershipUnits, (ii) subdivide its outstanding Partnership Units, or (iii) combine itsoutstanding Partnership Units into a smaller number of Partnership Units, in theevent the General Partner takes an analogous action with respect to the CommonStock. The intent of the previous sentence is that one Partnership Unit remainsthe economic equivalent of one share of Common Stock without dilution. If theGeneral Partner determines that it is necessary or desirable to make any filingsunder the Act or otherwise in order to reference the existence of such action,the General Partner may cause such filings to be made, which filings might takethe form of amendments to the Certificate; provided, however, that, unlessspecifically required by this Agreement or the Act after giving effect to theterms of this Agreement, no approval or consent of any Partners shall berequired in connection with the making of any such filing. (c) Treatment of Proceeds. If the proceeds actually received by the GeneralPartner in connection with an issuance of Securities by the General Partner areless than the gross proceeds of such offering, grant, award or issuance as aresult of any underwriter’s discounts, commissions or other fees or expensespaid or incurred in connection with such offering, grant, award or issuance,then the General Partner shall be deemed to have made a Capital Contribution tothe Partnership in the amount of the gross proceeds of such offering, grant,award or issuance and the Partnership shall be deemed simultaneously to havepaid pursuant to Section 7.3(c) for the amount of such expenses. -19-4.4 ADDITIONAL FUNDS (a) The sums of money required to finance the business and affairs of thePartnership shall be derived from the initial Capital Contributions made to thePartnership by the Partners as set forth in Section 4.1 and from funds generatedfrom the operation and business of the Partnership. (b) In the event additional financing is needed from sources other than asset forth in Section 4.4(a) for any reason, the General Partner may, in its soleand absolute discretion, in such amounts and at such times as it solely shalldetermine to be necessary or appropriate: (i) cause the Partnership to issue additional Partnership Interests and admit additional Limited Partners to the Partnership in accordance with Section 4.2; (ii) make additional Capital Contributions to the Partnership (subject to the provisions of Section 4.3(a)); (iii) cause the Partnership to borrow money, enter into loan arrangements, issue debt securities, obtain letters of credit or otherwise borrow money on a secured or unsecured basis; (iv) make a loan or loans to the Partnership (subject to Section 4.3(a)); or (v) cause the Partnership to sell any assets or properties directly or indirectly owned by the Partnership.4.5 NO THIRD-PARTY BENEFICIARY No creditor or other third party having dealings with the Partnership shallhave the right to enforce the right or obligations of any Partner to makeCapital Contributions or loans or to pursue any other right or remedy hereunderor at law or in equity, it being understood and agreed that the provisions ofthis Agreement shall be solely for the benefit of, and may be enforced solelyby, the parties hereto and their respective successors and assigns.4.6 NO INTEREST No Partner shall be entitled to interest on any Capital Contribution or onsuch Partner’s Capital Account.4.7 NO PREEMPTIVE RIGHTS Subject to any preemptive rights that may be granted in connection with theissuance of Partnership Interests under Section 4.3(a), no Person shall have anypreemptive or other similar right with respect to any: (a) additional Capital Contributions or loans to the Partnership; or (b) issuance or sale of any Partnership Units or other PartnershipInterests. -20-4.8 CAPITAL ACCOUNTS The Partnership shall establish and maintain throughout the life of thePartnership for each Partner a separate “Capital Account” in accordance withTreasury Regulations Section 1.704-1(b)(2)(iv). If (i) a new or existing Partneracquires an additional Partnership Interest in exchange for more than a deminimis Capital Contribution, (ii) the Partnership distributes to a Partner morethan a de minimis amount of Partnership property as consideration for aPartnership Interest, (iii) the Partnership is liquidated within the meaning ofTreasury Regulation Section 1.704-1(b)(2)(ii)(g), or (iv) at such other times asthe General Partner may determine so long as such adjustment is made undergenerally accepted industry accounting practices within the meaning of TreasuryRegulations Section 1.704-1(b)(2)(iv)(f)(5), the General Partner shall revaluethe property of the Partnership to its fair market value (as determined by theGeneral Partner, in its sole and absolute discretion, and taking into accountSection 7701(g) of the Code) in accordance with Regulations Section1.704-1(b)(2)(iv)(f). When the Partnership’s property is revalued by the GeneralPartner, the Capital Accounts of the Partners shall be adjusted in accordancewith Treasury Regulations Sections 1.704-1(b)(2)(iv)(f) and (g), which generallyrequire such Capital Accounts to be adjusted to reflect the manner in which theunrealized gain or loss inherent in such property (that has not been reflectedin the Capital Accounts previously) would be allocated among the Partnerspursuant to Section 5.1 if there were a taxable disposition of such property forits fair market value (as determined by the General Partner, in its sole andabsolute discretion, and taking into account Section 7701(g) of the Code) on thedate of the revaluation. ARTICLE 5 DISTRIBUTIONS5.1 DISTRIBUTIONS (a) General. Subject to the provisions of Sections 5.3, 5.4, 8.6(b),11.6(d) and 13.2, the General Partner shall cause the Partnership to distributeto the Partners as of the applicable Partnership Record Date, at such times asthe General Partner shall determine, amounts of Available Operating Cash and NetSales Proceeds in the manner set forth in this Section 5.1. (b) Available Operating Cash. Available Operating Cash shall be distributedto the Partners as determined by the General Partner in its sole and absolutediscretion in accordance with their respective Percentage Interests as of theapplicable Partnership Record Date. (c) Net Sales Proceeds. Net Sales Proceeds shall be distributed to thePartners as determined by the General Partner in its sole and absolutediscretion in accordance with their respective Percentage Interests as of theapplicable Partnership Record Date until the Unrecovered Contribution Accountand 8% Return Account of the General Partner have been reduced to zero ($0).Thereafter, 15% of any Net Sales Proceeds shall be distributed to the Advisor(in its capacity as Partner) (such distributions, the “Advisor Participation inSales Proceeds”), and 85% of such Net Sales Proceeds shall be distributed to thePartners as determined by the General Partner in its sole and absolutediscretion in accordance with their respective Percentage Interests as of theapplicable Partnership Record Date. (d) Distribution to Advisor Upon Listing. (i) Upon a Listing Event, the Advisor shall no longer be entitled to any distributions of the Advisor Participation in Sales Proceeds under Section 5.1(c). If the -21- Advisor has not been terminated under the Advisory Agreement as of the Listing Date, the Advisor (in its capacity as Partner) shall receive a distribution (“Listing Amount”), which shall be paid within five (5) Business Days of the determination of the Market Value, in an amount equal to 15% of the amount, if any, by which (A) the Market Value plus the cumulative distributions made to the General Partner from the inception of the Partnership through the Listing Date exceeds (B) the sum of (1) the Invested Capital of the General Partner as of the Listing Date, and (2) the 8% Return that has accrued with respect to the Invested Capital of the General Partner from the inception of the Partnership through the Listing Date. (ii) The Listing Amount shall be paid, as determined by the General Partner’s board of directors, including a majority of the independent directors, either in the form of cash or REIT Stock with a Market Value equal to the Listing Amount. The Advisor agrees to execute such documents as the General Partner may reasonably require in connection with the issuance of REIT Stock if the Listing Amount is paid in the form of REIT Stock as provided herein. (e) Distribution to Advisor Upon Termination. (i) Upon a Termination Event, the Advisor shall no longer be entitled to any distributions of the Advisor Participation in Sales Proceeds under Section 5.1(c). If a Listing Event has not occurred as of the date of a Termination Event, then the Advisor (in its capacity as Partner) shall receive a distribution (the “Termination Amount”), which shall be paid within five (5) Business Days of the date of such Termination Event, in an amount equal to 15% of the amount, if any, by which (A) the Appraised Value of all of the Partnership Assets as of the date of the Termination Event, less any indebtedness secured by such assets, plus the cumulative distributions made to the General Partner from the inception of the Partnership through the date of the Termination Event, exceeds (B) the sum of (1) the Invested Capital of the General Partner as of such date, and (2) the 8% Return that has accrued with respect to the Invested Capital of the General Partner from the inception of the Partnership through the date of Termination Event. (ii) The Termination Amount shall be paid, as determined by the General Partner’s board of directors, including a majority of the independent directors, either in the form of cash or the issuance to the Advisor of an interest-bearing promissory note (the “Termination Note”) in an amount equal to the Termination Amount. Interest on the Termination Note will accrue beginning on the date of the Termination Event at a rate deemed fair and reasonable by the General Partner. In the event the Termination Amount is paid in the form of the Termination Note, the Partnership shall repay the Termination Note using Net Sales Proceeds prior to making any distributions under Section 5.1(c) until the Termination Note is paid in full, including all accrued but unpaid interest. If the Termination Note has not been paid in full within five (5) years after the date of the Termination Event, then the General Partner (as determined by the General Partner’s board of directors, including a majority of the independent directors) shall purchase the Termination Note from the Advisor in exchange for either cash or REIT Stock with a Value equal to the aggregate amount outstanding under the Termination Note, including principal and accrued but unpaid interest. The Advisor agrees to execute such documents as the General Partner may reasonably require in connection with the issuance of REIT Stock if the Termination Note is purchased with REIT Stock as provided herein. -22-5.2 QUALIFICATION AS A REIT The General Partner shall take such action as it deems necessary oradvisable to cause the Partnership to distribute sufficient amounts under thisArticle 5 to enable the General Partner to pay stockholder dividends that willenable the General Partner to (a) satisfy the requirements for qualification asa REIT under the Code and the Treasury Regulations (the “REIT Requirements”),and (b) avoid any Federal income or excise tax liability; provided, however, theGeneral Partner shall not be bound to comply with this covenant to the extentsuch distributions would violate applicable Delaware law.5.3 WITHHOLDING With respect to any withholding tax or other similar tax liability orobligation to which the Partnership may be subject as a result of any act by orstatus of any Partner or to which the Partnership becomes subject with respectto any Partnership Interest, the Partnership shall have the right to withholdamounts of Available Operating Cash or Net Sales Proceeds or other PartnershipAssets distributable to such Partner or with respect to such PartnershipInterests, to the extent of the amount of such withholding tax or other similartax liability or obligation pursuant to the provisions contained in Section10.5.5.4 ADDITIONAL PARTNERSHIP INTERESTS If the Partnership issues Partnership Interests in accordance with Section4.2 or 4.3, the distribution priorities set forth in Section 5.1 shall beamended, as necessary, to reflect any distribution priority of such PartnershipInterests and corresponding amendments shall be made to the provisions ofArticle 6. If a new or existing Partner acquires an additional PartnershipInterest in exchange for a Capital Contribution on any date other than aPartnership Record Date, such Partner shall not be entitled to any distributionswith respect to such additional Partnership Interest until the first PartnershipRecord Date following the date of such issuance. ARTICLE 6 ALLOCATIONS6.1 ALLOCATION OF PROFITS AND NET LOSSES (a) General. Except as otherwise provided in this Article 6 and in Section11.6(c), and after making any special allocations under Section 6.2, Profits andLosses for each Fiscal Year shall be allocated among the Partners in accordancewith their respective Percentage Interests as of the end of such Fiscal Year,subject to any rights of holders of Partnership Interests other than PartnershipUnits. (b) Adjustment. If the amount of Losses for any Fiscal Year that otherwisewould be allocated to a Partner under Section 6.1(a) or this Section 6.1(b)would cause or increase an Adjusted Capital Account Deficit of such Partner asof the last day of such Fiscal Year (after all other allocations have been madepursuant to this Article 6), then such Partner shall be allocated that amount ofLosses which does not cause or increase such Adjusted Capital Account Deficit,and the remainder of such Losses that would have been allocated to such Partnershall be allocated to the other Partners in proportion to their PercentageInterests. -23- (c) Special Allocation with Respect to Sales. Profits (and items thereof)and Losses (and items thereof) for each Fiscal Year or other applicable periodfrom Sales shall be allocated among the Partners such that the ending CapitalAccount of each Partner, immediately after giving effect to the allocationsunder this Article 6, is, as nearly as possible, equal to the amount of thehypothetical distribution that such Partner would receive if the Partnershipwere liquidated on the last day of such period and all assets of thePartnership, including cash, were sold for cash equal to their Carrying Value,all liabilities of the Partnership were satisfied with cash according to theirterms (limited with respect to each nonrecourse liability to the Carrying Valueof the assets securing such liability), and Net Sales Proceeds (aftersatisfaction of such liabilities) were distributed in full pursuant to Section5.1(c). For purposes of the preceding allocations only, a Partner holding morethan one class or series of Partnership Interests or units shall be deemed to bea separate Partner with respect to each such class, series or units.6.2 SPECIAL ALLOCATIONS Notwithstanding any provisions of Section 6.1, the following specialallocations shall be made in the following order of priority: (a) Minimum Gain Chargeback (Nonrecourse Liabilities). Except as otherwiseprovided in Treasury Regulations Section 1.704-2(f), if there is a net decreasein Partnership Minimum Gain for any Fiscal Year, each Partner shall be speciallyallocated items of Partnership income and gain for such year (and, if necessary,subsequent years) in an amount equal to such Partner’s share of the net decreasein Partnership Minimum Gain to the extent required by Treasury RegulationsSection 1.704-2(f). The items to be so allocated shall be determined inaccordance with Treasury Regulations Sections 1.704-2(f) and (j)(2). Thissubparagraph is intended to comply with the minimum gain chargeback requirementin said section of the Treasury Regulations and shall be interpretedconsistently therewith. Allocations pursuant to this subparagraph shall be madein proportion to the respective amounts required to be allocated to each Partnerpursuant hereto. (b) Partner Minimum Gain Chargeback. Except as otherwise provided inTreasury Regulations Section 1.704-2(i)(4), if there is a net decrease inPartner Minimum Gain attributable to a Partner Nonrecourse Debt during anyFiscal Year, each Partner who has a share of the Partner Minimum Gainattributable to such Partner Nonrecourse Debt, determined in accordance withTreasury Regulations Section 1.704-2(i)(5), shall be specially allocated itemsof Partnership income and gain for such year (and, if necessary, subsequentyears) in an amount equal to that Partner’s share of the net decrease in thePartner Minimum Gain attributable to such Partner Nonrecourse Debt to the extentand in the manner required by Treasury Regulations Section 1.704-2(i). The itemsto be so allocated shall be determined in accordance with Treasury RegulationsSections 1.704-2(i)(4) and (j)(2). This subparagraph is intended to comply withthe minimum gain chargeback requirement with respect to Partner Nonrecourse Debtcontained in said section of the Treasury Regulations and shall be interpretedconsistently therewith. Allocations pursuant to this subparagraph shall be madein proportion to the respective amounts to be allocated to each Partner pursuanthereto. (c) Qualified Income Offset. In the event a Partner unexpectedly receivesany adjustment, allocation or distribution described in Treasury RegulationSections 1.704 1(b)(2)(ii)(d)(4), (5) and (6) that causes or increases anAdjusted Capital Account Deficit, gross items of income and gain shall bespecially allocated to such Partner so as to eliminate such Adjusted CapitalAccount Deficit as quickly as possible. This subparagraph is intended to -24-constitute a “qualified income offset” under Section 1.704-1(b)(2)(ii)(d) of theTreasury Regulations and shall be interpreted consistently therewith. (d) Nonrecourse Deductions. Nonrecourse Deductions for any Fiscal Yearshall be allocated to the Partners in accordance with their respectivePercentage Interests. (e) Partner Nonrecourse Deductions. Partner Nonrecourse Deductions for anyFiscal Year with respect to a Partner Nonrecourse Debt shall be speciallyallocated to the Partners that bear the economic risk of loss for such PartnerNonrecourse Debt (as determined under Treasury Regulations Sections1.704-2(b)(4) and 1.704-2(i)(1). (f) Definition of “Profits” and “Losses”. “Profits” and “Losses” and anyitem of income, gain, expense, or loss referred to in this Agreement shall bedetermined in accordance with federal income tax accounting principles, asmodified by Treasury Regulations Section 1.704-1(b)(2)(iv), except that Profitand Loss shall not include items of income, gain and expense that are speciallyallocated pursuant to Sections 6.1(b), 6.2(a), 6.2(b), 6.2(c), 6.2(d), and6.2(e). All allocations of Profit and Loss (and all items contained therein) forfederal income tax purposes shall be identical to all allocations of such itemsset forth in Section 6.1 and this Section 6.2, except as otherwise required bySection 704(c) of the Code and Regulations Section 1.704-1(b)(4). The GeneralPartner shall have the authority to elect the method to be used by thePartnership for allocating items of income, gain, and expense as required bySection 704(c) of the Code including a method that may result in a Partnerreceiving a disproportionately larger share of the Partnership tax depreciationdeductions, and such election shall be binding on all Partners. (g) Curative Allocations. The allocations set forth in Section 6.1(b) andSections 6.2(a) through (e) hereof (the “Regulatory Allocations”) are intendedto comply with certain requirements of the Treasury Regulations. It is theintent of the Partners that, to the extent possible all Regulatory Allocationsthat are made be offset either with other Regulatory Allocations or with specialallocations pursuant to this Section 6.2(g). Therefore, notwithstanding anyother provision of this Article 6 (other than the Regulatory Allocations), theGeneral Partner shall make such offsetting special allocations in whatevermanner it determines appropriate so that, after such offsetting allocations aremade, each Partner’s Capital Account balance is, to the extent possible, equalto the Capital Account balance such Partner would have had if the RegulatoryAllocations were not part of the Agreement and all Partnership items wereallocated pursuant to Sections 6.1(a) and 6.1(c). In exercising its discretionunder this Section 6.2(g), the General Partner shall take into account futureRegulatory Allocations under Sections 6.2(a) and 6.2(b) that, although not yetmade, are likely to offset other Regulatory Allocations previously made underSections 6.2(d) and 6.2(e). (h) Changes in Interest. If during any Fiscal Year there is a change in anyPartner’s Percentage Interest, then for purposes of determining the Profits,Losses, or any other items allocable to such Partner for such Fiscal Year,Profits, Losses, and any such other items shall be determined on a daily,monthly, or other basis, as determined by the General Partner using anypermissible method under Code Section 706 and the Treasury Regulationsthereunder.6.3 REVISIONS TO ALLOCATIONS TO REFLECT ISSUANCE OF PARTNERSHIP INTERESTS If the Partnership issues Partnership Interests to the General Partner orany additional Limited Partner pursuant to Article 4, the General Partner shallmake any such revisions to this Article 6 as it deems necessary to reflect theterms of the issuance of such Partnership Interests, -25-including making preferential allocations to classes of Partnership Intereststhat are entitled thereto. Such revisions shall not require the consent orapproval of any other Partner. ARTICLE 7 MANAGEMENT AND OPERATIONS OF BUSINESS7.1 MANAGEMENT (a) Management By the General Partner. Except as otherwise expresslyprovided in this Agreement, full, complete and exclusive discretion to manageand control the business and affairs of the Partnership are and shall be vestedin the General Partner, and no Limited Partner other than the Advisor shall haveany right to participate in or exercise control or management power over thebusiness and affairs of the Partnership. The General Partner may not be removedby the Limited Partners with or without cause. (b) Power and Authority of the General Partner. In addition to the powersnow or hereafter granted a general partner of a limited partnership underapplicable law or which are granted to the General Partner under any otherprovision of this Agreement, the General Partner shall have full power andauthority to do all things deemed necessary or desirable by it to conduct thebusiness of the Partnership, to exercise all powers set forth in Section 3.2hereof and to effectuate the purposes set forth in Section 3.1 hereof,including, without limitation: (i) (A) the making of any expenditures, the lending or borrowing of money (including, without limitation, making prepayments on loans and borrowing money to permit the Partnership to make distributions to its Partners in such amounts as will permit the General Partner (so long as the General Partner qualifies as a REIT) to (1) avoid the payment of any Federal income or excise tax (including any excise tax pursuant to Section 4981 of the Code) and (2) make distributions to its stockholders in amounts sufficient to permit the General Partner to maintain REIT status), (B) the assumption or guarantee of, or other contracting for, indebtedness and other liabilities, (C) the issuance of any evidence of indebtedness (including the securing of the same by deed, mortgage, deed of trust or other lien or encumbrance on the Partnership’s assets), and (D) the incurring of any obligations it deems necessary for the conduct of the activities of the Partnership, including the payment of all expenses associated with the General Partner; (ii) the making of tax, regulatory and other filings, or rendering of periodic or other reports to governmental or other agencies having jurisdiction over the business or assets of the Partnership or the General Partner; (iii) the acquisition, disposition, mortgage, pledge, encumbrance, hypothecation or exchange of any assets, including Real Estate Assets, of the Partnership (including the exercise or grant of any conversion, option, privilege, or subscription right or other right available in connection with any assets at any time held by the Partnership) or the merger or other combination of the Partnership with or into another entity on such terms as the General Partner deems proper; (iv) the use of the assets of the Partnership (including, without limitation, cash on hand) for any purpose consistent with the terms of this Agreement and on any terms the General Partner sees fit, including, without limitation, -26- (A) the financing of the conduct of the operations of the General Partner, the Partnership or any of the Partnership’s Subsidiaries, (B) the lending of funds to other Persons (including, without limitation, the Subsidiaries of the Partnership and/or the General Partner) and the repayment of obligations of the Partnership and its Subsidiaries and any other Person in which it has an equity investment, and (C) the making of capital contributions to the Partnership’s Subsidiaries; (v) the development, expansion, construction, management, operation, leasing, repair, alteration, demolition or improvement of any real property in which the Partnership or any Subsidiary of the Partnership owns a direct or indirect interest; (vi) the negotiation, execution, and performance of any contracts, conveyances or other instruments that the General Partner considers useful or necessary to the conduct of the Partnership’s operations or the implementation of the General Partner’s powers under this Agreement, including contracting with contractors, developers, consultants, accountants, legal counsel, other professional advisors and other agents and the payment of their expenses and compensation out of the Partnership’s assets; (vii) the distribution of Partnership cash or other Partnership assets in accordance with this Agreement; (viii) the holding, management, investment and reinvestment of cash and other assets of the Partnership; (ix) the collection and receipt of revenues and income of the Partnership; (x) the establishment of one or more divisions of the Partnership, the selection and dismissal of employees of the Partnership (including, without limitation, employees having titles such as “president,” “vice president,” “secretary” and “treasurer” of the Partnership), and agents, outside attorneys, accountants, consultants and contractors of the Partnership, and the determination of their compensation and other terms of employment or engagement; (xi) the formation of, or acquisition of an interest (including non-voting interests in entities controlled by Affiliates of the Partnership or third parties) in, and the contribution of property to, any other Entities that the General Partner deems desirable (including, without limitation, the acquisition of interests in, and the contributions of funds or property to, or making of loans to, Subsidiaries of the Partnership and any other Person from time to time), or the incurrence of indebtedness on behalf of such Persons or the guarantee of the obligations of such Persons; provided that, as long as the General Partner has determined to elect to qualify as a REIT or to continue to qualify as a REIT, the Partnership may not engage in any such formation, acquisition or contribution that would cause the General Partner to fail to qualify as a REIT; (xii) the control of any matters affecting the rights and obligations of the Partnership, including: -27- (A) the settlement, compromise, submission to arbitration or any other form of dispute resolution, or abandonment of, any claim, cause of action, liability, debt or damages, due or owing to or from the Partnership, (B) the commencement or defense of suits, legal proceedings, administrative proceedings, arbitration or other forms of dispute resolution, and (C) the representation of the Partnership in all suits or legal proceedings, administrative proceedings, arbitrations or other forms of dispute resolution, the incurring of legal expenses, and the indemnification of any Person against liabilities and contingencies to the extent permitted by law; (xiii) the undertaking of any action in connection with the Partnership’s direct or indirect investment in its Subsidiaries or any other Person (including, without limitation, the contribution or loan of funds by the Partnership to such Persons); (xiv) the determination of the fair market value of any Partnership Assets distributed in kind using such reasonable method of valuation as the General Partner, in its sole discretion, may adopt; (xv) the exercise, directly or indirectly, through any attorney-in-fact acting under a general or limited power of attorney, of any right, including the right to vote, appurtenant to any asset or investment held by the Partnership; (xvi) the exercise of any of the powers of the General Partner enumerated in this Agreement or the undertaking of any action on behalf of or in connection with any Subsidiary of the Partnership or any other Person in which the Partnership has a direct or indirect interest, or jointly with any such Subsidiary or other Person; (xvii) the making, execution and delivery of any and all deeds, leases, notes, mortgages, deeds of trust, security agreements, conveyances, contracts, guarantees, warranties, indemnities, waivers, releases or legal instruments or agreements in writing necessary or appropriate, in the judgment of the General Partner, for the accomplishment of any of the foregoing; (xviii) the issuance of additional Partnership Interests in connection with Capital Contributions by Additional Limited Partners and additional Capital Contributions by Partners pursuant to Article 4 hereof; (xix) the opening of bank accounts on behalf of, and in the name of, the Partnership and its Subsidiaries; and (xx) the amendment and restatement of Exhibit A to reflect accurately at all times the Capital Contributions of, Partnership Units held by and Percentage Interests of the Partners as the same are adjusted from time to time to the extent necessary to reflect any Capital Contributions, redemptions, issuance of Partnership Units, admission of any Additional Limited Partner or any Substituted Limited Partner or otherwise, which amendment and restatement, notwithstanding anything in this Agreement to the contrary, shall not be deemed an amendment of this Agreement, as long as the matter or event being reflected in Exhibit A otherwise is authorized by this Agreement. -28- (c) Advisor. The General Partner has engaged the Advisor to serve as the advisor to the Partnership and the General Partner pursuant to the terms and conditions of the Advisory Agreement. In consideration for the services to be provided to the Partnership and the General Partner, the Advisor will receive the fees described in the Advisory Agreement. In addition, the Advisor (in its capacity as a Partner) is entitled to receive distributions of the Advisor Participation in Sales Proceeds under Section 5.1(c) hereof, and distributions upon a Listing Event under Section 5.1(d) hereof or upon a Termination Event under Section 5.1(e) hereof. (d) Insurance. At all times from and after the date hereof, the General Partner may cause the Partnership to obtain and maintain: (i) casualty, liability and other insurance on the Real Estate Assets of the Partnership; (ii) liability insurance for the Indemnitees hereunder; and (iii) such other insurance as the General Partner, in its sole and absolute discretion, determines to be appropriate and reasonable. (e) Working Capital and Other Reserves. At all times from and after the date hereof, the General Partner may cause the Partnership to establish and maintain at any and all times working capital accounts and other cash or similar balances in such amount as the General Partner, in its sole and absolute discretion, deems appropriate and reasonable from time to time.7.2 CERTIFICATE OF LIMITED PARTNERSHIP The General Partner has previously filed the Certificate with the Secretaryof State of Delaware as required by the Act. The General Partner shall use allreasonable efforts to cause to be filed such other certificates or documents asmay be reasonable and necessary or appropriate for the formation, continuation,qualification and operation of a limited partnership (or a partnership in whichthe limited partners have limited liability) in the State of Delaware and anyother state, or the District of Columbia, in which the Partnership may elect todo business or own property. To the extent that such action is determined by theGeneral Partner to be reasonable and necessary or appropriate, the GeneralPartner shall file amendments to and restatements of the Certificate and do allof the things to maintain the Partnership as a limited partnership (or apartnership in which the limited partners have limited liability) under the lawsof the State of Delaware and each other state, or the District of Columbia, inwhich the Partnership may elect to do business or own property. Subject to theterms of Section 8.5(a)(iv) hereof, the General Partner shall not be required,before or after filing, to deliver or mail a copy of the Certificate or anyamendment thereto to any Limited Partner.7.3 REIMBURSEMENT OF THE GENERAL PARTNER (a) No Compensation. Except as provided in this Section 7.3 and elsewherein this Agreement (including the provisions of Articles 5 and 6 regardingdistributions, payments, and allocations to which it may be entitled), theGeneral Partner shall not be compensated for its services as general partner ofthe Partnership. (b) Responsibility for Partnership Expenses. The Partnership shall beresponsible for and shall pay all expenses relating to the Partnership’sorganization and the ownership and operation of the Partnership Assets. TheGeneral Partner shall be reimbursed on a monthly basis, -29-or such other basis as it may determine in its sole and absolute discretion, forall expenses that it incurs on behalf of the Partnership relating to theownership and operation of the Partnership Assets, or for the benefit of thePartnership; provided, that the amount of any such reimbursement shall bereduced by any interest earned by the General Partner with respect to bankaccounts or other instruments or accounts held by it on behalf of thePartnership. Such reimbursement shall be in addition to any reimbursement madeas a result of indemnification pursuant to Section 7.6 hereof. (c) Responsibility for General Partner Expenses. The General Partner shallalso be reimbursed for (i) all expenses related to the operations of the GeneralPartner and to the management and administration of any Subsidiaries of theGeneral Partner or the Partnership or Affiliates of the Partnership, such asauditing expenses and filing fees and any and all salaries, compensation andexpenses of officers and employees of the General Partner, and (ii) all expensesthe General Partner incurs relating to the organization and/or reorganization ofthe Partnership and the General Partner, the public offering of REIT Stock bythe General Partner, and any other offering, grant, award or issuance of REITStock or additional Partnership Interests pursuant to Section 4.2 or 4.3,including all expenses associated with compliance by the General Partner and theInitial Limited Partner with laws, rules and regulations promulgated by anyregulatory body. (d) Business of the General Partner. The Limited Partners acknowledge thatthe sole business of the General Partner is the ownership of direct or indirectinterests in, and the direct or indirect operation of, the Partnership, and thatall of the expenses of the General Partner are incurred for the benefit of thePartnership. (e) Characterization of Reimbursements. All payments and reimbursementshereunder shall be characterized for Federal income tax purposes as expenses ofthe Partnership incurred on its behalf, and not as expenses of the GeneralPartner.7.4 ACQUISITION OF LIMITED PARTNER INTERESTS BY THE GENERAL PARTNER The General Partner and any Affiliates of the General Partner may acquireLimited Partner Interests and shall be entitled to exercise all rights of aLimited Partner relating to such Limited Partner Interests.7.5 TRANSACTIONS WITH AFFILIATES (a) Transactions with Subsidiaries. The Partnership may lend or contributefunds or other assets to its Subsidiaries or other Persons in which it has anequity investment and such Subsidiaries and Persons may borrow funds from thePartnership, on terms and conditions established in the sole and absolutediscretion of the General Partner. The foregoing authority shall not create anyright or benefit in favor of any Subsidiary or any other Person. (b) Certain Transactions with the Advisor and its Affiliates.Notwithstanding anything to the contrary in this Agreement, the General Partnershall not cause the Partnership, directly or indirectly, to Transfer anyproperty to, purchase any property from, loan any money to, borrow any moneyfrom or enter into any other transaction with the Advisor or any of itsAffiliates, or any director of the General Partner, except in accordance withthe procedures set forth in the Articles of Incorporation for transactionsbetween the General Partner and the Advisor or its Affiliates. -30- (c) Benefit Plans Sponsored by the Partnership. The General Partner, in itssole and absolute discretion and without the approval of the Limited Partners,may propose and adopt, on behalf of the Partnership, employee benefit plans,option or other equity incentive plans, and similar plans funded by thePartnership for the benefit of employees of the Partnership, the GeneralPartner, any Subsidiaries of the Partnership or any Affiliate of any of them inrespect of services performed, directly or indirectly, for the benefit of thePartnership, the General Partner, any Subsidiaries of the Partnership or any oftheir respective Affiliates.7.6 INDEMNIFICATION (a) General. Subject to the limitations of Section 7.6(b), to the maximumextent permitted under the Act in effect from time to time and subject to thelimitations of Section II.G. of the NASAA Guidelines, the Partnership shallindemnify each Indemnitee from and against any and all losses, claims, damages,liabilities, joint or several, expenses (including, without limitation,reasonable attorneys’ fees and other legal fees and expenses), judgments, fines,settlements, and other amounts arising from any and all claims, demands,actions, suits or proceedings, civil, criminal, administrative or investigative(collectively, “Claims”), that relate to the operations of the Partnership, theGeneral Partner or any of the Partnership’s Subsidiaries in which suchIndemnitee may be involved, or is threatened to be involved, as a party orotherwise; provided, however, that in no event shall this Section 7.6(a) enlargethe indemnification permitted below under Section 7.6(b). (b) Limitation. Notwithstanding any provision hereof to the contrary: (i) the Partnership will not indemnify any Indemnitee unless: (A) the Indemnitee has determined in good faith that the course of conduct which caused the loss, liability or expenses was in the best interests of the Partnership; (B) the Indemnitee was acting on behalf of the Partnership or performing services for the Partnership; (C) Such Claim was not the result of: (1) with respect to the General Partner, the gross negligence, willful misconduct or fraud of the General Partner; (2) with respect to any Limited Partner, the gross negligence, willful misconduct or fraud of the Limited Partner; (3) with respect to (A) the directors, officers and employees of the General Partner, (B) the Advisor and (C) the members, managers and employees of the Advisor, the negligence or misconduct of such Person; or (4) with respect to the Independent Directors (as defined in the Articles of Incorporation), the gross negligence or willful misconduct of such Independent Director; and -31- (D) any indemnification or agreement to hold harmless may be paid only out of the Net Assets of the Partnership, and neither the General Partner nor any Limited Partner shall have any obligation to contribute to the capital of the Partnership, or otherwise provide funds, to enable the Partnership to fund its obligations under this Section 7.6; (ii) notwithstanding anything to the contrary in Section 7.6(b)(ii), the Partnership will not indemnify any Indemnitee for losses, liabilities or expenses arising from or out of an alleged violation of federal or state securities laws unless: (A) there has been a successful adjudication on the merits of each count involving alleged securities law violations as to the particular Indemnitee; (B) such claims have been dismissed with prejudice on the merits by a court of competent jurisdiction as to the particular Indemnitee; or (C) a court of competent jurisdiction approves a settlement of the claims against the particular Indemnitee and finds that indemnification of the settlement and related costs should be made, and the court considering the matter has been advised of the position of the Securities Exchange Commission and the published position of any state securities regulatory authority in which the securities were offered or sold as to indemnification for violations of securities laws. (c) Contractual Obligations. Without limitation, the indemnity set forth inthis Section 7.6 shall extend to any liability of any Indemnitee pursuant to aloan guaranty (except a guaranty by a Limited Partner of nonrecourseindebtedness of the Partnership or as otherwise provided in any such loanguaranty), contractual obligation for any indebtedness or other obligation orotherwise for any indebtedness of the Partnership or any Subsidiary of thePartnership (including, without limitation, any indebtedness which thePartnership or any Subsidiary of the Partnership has assumed or taken subjectto), and the General Partner is hereby authorized and empowered, on behalf ofthe Partnership, to enter into one or more indemnification agreements consistentwith the provisions of this Section 7.6 in favor of any Indemnitee having orpotentially having liability for any such indebtedness. (d) Advancement of Expenses. Reasonable expenses incurred by an Indemniteewho is a party to a proceeding shall be paid or reimbursed by the Partnership inadvance of the final disposition of any and all Claims made or threatenedagainst an Indemnitee only if all of the following conditions are satisfied: (i)the Claim relates to acts or omissions with respect to the performance of dutiesor services on behalf of the Partnership, (ii) either (A) the Claim wasinitiated by a third party who is not a stockholder of the General Partner or(B) if the Proceeding was initiated by a Stockholder, the initiating Stockholderwas acting in his or her capacity as such and the advancement was approved by acourt of competent jurisdiction, and (iii) the Indemnitee provides thePartnership with a written undertaking to repay the amount paid or reimbursed bythe Partnership, together with the applicable legal rate of interest thereon, ifit is ultimately determined that the Indemnitee did not comply with therequisite standard of conduct and is not entitled to indemnification. (e) No Exclusivity. The indemnification provided by this Section 7.6 shallbe in addition to any other rights to which an Indemnitee or any other Personmay be entitled under any agreement, pursuant to any vote of the Partners, as amatter of law or otherwise, and shall -32-continue as to an Indemnitee who has ceased to serve in such capacity unlessotherwise provided in a written agreement pursuant to which such Indemnitees areindemnified. (f) Insurance. The Partnership may purchase and maintain insurance, onbehalf of the Indemnitees and such other Persons as the General Partner shalldetermine, against any liability that may be asserted against or expenses thatmay be incurred by such Person in connection with the Partnership’s activities,regardless of whether the Partnership would have the power to indemnify suchPerson against such liability under the provisions of this Agreement. (g) Benefit Plan Fiduciary. For purposes of this Section 7.6, thePartnership shall be deemed to have requested an Indemnitee to serve asfiduciary of an employee benefit plan whenever the performance by suchIndemnitee of its duties to the Partnership also imposes duties on, or otherwiseinvolves services by, such Indemnitee to the plan or participants orbeneficiaries of the plan. Excise taxes assessed on an Indemnitee with respectto an employee benefit plan pursuant to applicable law shall constitute fineswithin the meaning of this Section 7.6 and actions taken or omitted by theIndemnitee with respect to an employee benefit plan in the performance of itsduties for a purpose reasonably believed by such Indemnitee to be in theinterest of the participants and beneficiaries of the plan shall be deemed to befor a purpose which is not opposed to the best interests of the Partnership. (h) No Personal Liability for Partners. In no event may an Indemniteesubject any of the Partners to personal liability by reason of theindemnification provisions set forth in this Agreement. (i) Interested Transactions. An Indemnitee shall not be deniedindemnification in whole or in part under this Section 7.6 because theIndemnitee had an interest in the transaction with respect to which theindemnification applies if the transaction was otherwise permitted by the termsof this Agreement. (j) Benefit. The provisions of this Section 7.6 are for the benefit of theIndemnitees, their heirs, successors, assigns and administrators and shall notbe deemed to create any rights for the benefit of any other Persons. (k) Amendment of this Section 7.6. Any amendment, modification or repeal ofthis Section 7.6 or any provision hereof shall be prospective only and shall notin any way affect the Partnership’s liability to any Indemnitee under thisSection 7.6, as in effect immediately prior to such amendment, modification, orrepeal with respect to Claims arising from or relating to matters occurring, inwhole or in part, prior to such amendment, modification or repeal, regardless ofwhen such Claims may arise or be asserted. (l) Indemnification Payments Not Distributions. If and to the extent anypayments to the General Partner or the Initial Limited Partner in its capacityas the Advisor pursuant to this Section 7.6 constitute gross income to theGeneral Partner or the Initial Limited Partner (as opposed to the repayment ofadvances made on behalf of the Partnership), such amounts shall constituteguaranteed payments within the meaning of Section 707(c) of the Code, shall betreated consistently therewith by the Partnership and all Partners, and shallnot be treated as distributions for purposes of computing the Partners’ CapitalAccounts. (m) Exception to Indemnification. Notwithstanding anything to the contraryin this Agreement, the General Partner shall not be entitled to indemnificationhereunder for any Claim -33-for which the General Partner is obligated to indemnify the Partnership underany other agreement between the General Partner and the Partnership.7.7 LIABILITY OF THE GENERAL PARTNER (a) General. To the maximum extent permitted under the Act and subject tothe limitations of Section II.G. of the NASAA Guidelines in effect from time totime, neither the General Partner nor any director, officer, shareholder,partner, member or employee, trustee, representative or agent of the GeneralPartner (including the Advisor and its Affiliates) shall be liable to thePartnership or to any Partner for (i) any act or omission performed or failed tobe performed by it, or for any losses, claims, costs, damages, or liabilitiesarising from any such act or omission, except to the extent such loss, claim,cost damage or liability results from such Person’s gross negligence, willfulmisconduct or fraud, (ii) any tax liability imposed on the Partnership or (iii)any losses due to the misconduct, negligence (gross or ordinary), dishonesty orbad faith of any agents of the Partnership. Notwithstanding anything to thecontrary in this Section 7.7(a), this limitation on liability applies only tothe extent that the particular officer or director has satisfied therequirements of Sections 7.6(b)(i) and (ii). (b) No Obligation to Consider Separate Interests of Limited Partners. TheLimited Partners expressly acknowledge that (i) the General Partner (and theAdvisor, in advising the General Partner) is acting on behalf of the Partnershipand the stockholders of the General Partner, collectively, (ii) the GeneralPartner (and the Advisor, in advising the General Partner) is under noobligation to consider the separate interest of the Limited Partners (including,without limitation, the tax consequences to Limited Partners or Assignees) indeciding whether to cause the Partnership to take (or decline to take) anyactions, and (iii) neither the General Partner nor the Advisor shall be liablefor monetary damages for losses sustained, liabilities incurred, or benefits notderived by Limited Partners in connection with such decisions, unless theGeneral Partner or the Advisor, as the case may be, acted in bad faith and theact or omission was material to the matter giving rise to the loss, liability orbenefit not derived. (c) Conflict. The Limited Partners expressly acknowledge that in the eventof any conflict in the fiduciary duties owed by the General Partner to itsstockholders and by the General Partner, in its capacity as a general partner ofthe Partnership, to the Limited Partners, the General Partner may act in thebest interests of the General Partner’s stockholders without violating itsfiduciary duties to the Limited Partners, and that the General Partner shall notbe liable for monetary damages for losses sustained, liabilities incurred, orbenefits not derived by the Limited Partners in connection with any suchviolation. (d) Amendment of this Section 7.7. Any amendment, modification or repeal ofthis Section 7.7 or any provision hereof shall be prospective only and shall notin any way affect the limitations on the General Partner’s and its officers’ anddirectors’ liability to the Partnership and the Limited Partners under thisSection 7.7 as in effect immediately prior to such amendment, modification orrepeal with respect to claims arising from or relating to matters occurring, inwhole or in part, prior to such amendment, modification or repeal, regardless ofwhen such claims may arise or be asserted.7.8 OTHER MATTERS CONCERNING THE GENERAL PARTNER (a) Reliance on Documents. The General Partner may rely and shall beprotected in acting, or refraining from acting, upon any resolution,certificate, statement, instrument, opinion, -34-report, notice, request, consent, order, bond, debenture, or other paper ordocument believed by it in good faith to be genuine and to have been signed orpresented by the proper party or parties. (b) Reliance on Advisors. The General Partner may consult with legalcounsel, accountants, appraisers, management consultants, investment bankers,architects, engineers, environmental consultants and other consultants andadvisers selected by it, and any act taken or omitted to be taken in relianceupon the opinion of such Persons as to matters which such General Partnerreasonably believes to be within such Person’s professional or expert competenceshall be conclusively presumed to have been done or omitted in good faith and inaccordance with such opinion. (c) Action Through Agents. The General Partner shall have the right, inrespect of any of its powers or obligations hereunder, to act through any of itsduly authorized officers, agents, including the Advisor, and duly appointedattorneys-in-fact. Each such officer, agent or attorney-in-fact shall, to theextent granted by the General Partner in writing, have full power and authorityto do and perform each and every act and duty which is permitted or required tobe done by the General Partner hereunder. (d) Actions to Maintain REIT Status. Notwithstanding any other provisionsof this Agreement or the Act, any action of the General Partner on behalf of thePartnership or any decision of the General Partner to refrain from acting onbehalf of the Partnership, undertaken in the good faith belief that such actionor omission is necessary or advisable in order to: (i) protect the ability ofthe General Partner to continue to qualify as a REIT, or (ii) avoid the GeneralPartner incurring any taxes under Sections 857 or 4981 of the Code, is expresslyauthorized under this Agreement and is deemed approved by all of the LimitedPartners.7.9 TITLE TO PARTNERSHIP ASSETS Title to all Partnership Assets, whether real, personal or mixed andwhether tangible or intangible, shall be deemed to be held by the Partnership asan entity, and no Partner, individually or collectively, shall have anyownership interest in the Partnership Assets or any portion thereof. Title toany or all of the Partnership Assets may be held in the name of the Partnership,the General Partner or one or more nominees, as the General Partner maydetermine, including Affiliates of the General Partner. The General Partnerhereby declares and warrants that any Partnership Asset for which legal title isheld in the name of the General Partner or any nominee or Affiliate of theGeneral Partner shall be held by the General Partner for the use and benefit ofthe Partnership in accordance with the provisions of this Agreement; provided,that the General Partner shall use reasonable efforts to cause beneficial andrecord title to such assets to be vested in the Partnership as soon asreasonably practicable. All Partnership Assets shall be recorded as the propertyof the Partnership in its books and records, irrespective of the name in whichlegal title to such Partnership Assets is held.7.10 RELIANCE BY THIRD PARTIES (a) Notwithstanding anything to the contrary in this Agreement, any Persondealing with the Partnership shall be entitled to assume that the GeneralPartner has full power and authority, without the consent or approval of anyother Partner or Person, to encumber, sell or otherwise use in any manner anyand all Partnership Assets and to enter into any contracts on behalf of thePartnership, and take any and all actions on behalf of the Partnership, and suchPerson shall be entitled to deal with the General Partner as if the GeneralPartner were the Partnership’s sole party in interest, both legally andbeneficially. -35- (b) Each Limited Partner hereby waives any and all defenses or otherremedies which may be available against such Person to contest, negate ordisaffirm any action of the General Partner in connection with any such dealing. (c) In no event shall any Person dealing with the General Partner or itsrepresentatives be obligated to ascertain that the terms of this Agreement havebeen complied with or to inquire into the necessity or expediency of any act oraction of the General Partner or its representatives. (d) Each and every certificate, document or other instrument executed onbehalf of the Partnership by the General Partner or its representatives shall beconclusive evidence in favor of any and every Person relying thereon or claimingthereunder that: (i) at the time of the execution and delivery of such certificate, document or instrument, this Agreement was in full force and effect; (ii) the Person executing and delivering such certificate, document or instrument was duly authorized and empowered to do so for and on behalf of the Partnership; and (iii) such certificate, document or instrument was duly executed and delivered in accordance with the terms and provisions of this Agreement and is binding upon the Partnership. ARTICLE 8 RIGHTS AND OBLIGATIONS OF LIMITED PARTNERS8.1 LIMITATION OF LIABILITY The Limited Partners shall have no liability under this Agreement, exceptas expressly provided in this Agreement, including Section 10.5 hereof, or underthe Act.8.2 NO RIGHT TO PARTICIPATE IN THE MANAGEMENT OF BUSINESS No Limited Partner shall take part in the management or control of thePartnership’s investment or other activities, transact any business in thePartnership’s name or have the power to sign documents for or otherwise bind thePartnership. Except as expressly provided herein, no Limited Partner shall havethe right to vote for the election, removal or replacement of the GeneralPartner. The exercise by any Limited Partner of any right conferred herein shallnot be construed to constitute participation by such Limited Partner in thecontrol of the business of the Partnership so as to make such Limited Partnerliable as a general partner for the debts and obligations of the Partnership forpurposes of the Act, laws of non-U.S. jurisdictions or otherwise.8.3 OUTSIDE ACTIVITIES OF LIMITED PARTNERS Subject to any agreements entered into by a Limited Partner or itsAffiliates, or any Assignee, with the Partnership or any of its Subsidiaries,any Limited Partner or Assignee and any officer, director, employee, agent,trustee, Affiliate or shareholder or other equity owner of any Limited Partneror Assignee shall be entitled to and may have business interests and engage -36-in business activities in addition to those relating to the Partnership,including business interests and activities that are in direct competition withthe Partnership or that are enhanced by the activities of the Partnership.Neither the Partnership nor any of the other Partners shall have any rights byvirtue of this Agreement in any business ventures of any Limited Partner orAssignee. None of the Limited Partners nor any other Person shall have anyrights by virtue of this Agreement or the Partnership relationship establishedhereby in any business ventures of any other Person and such Person shall haveno obligation pursuant to this Agreement to offer any interest in any suchbusiness ventures to the Partnership, any Limited Partner or any such otherPerson, even if such opportunity is of a character which, if presented to thePartnership, any Limited Partner or such other Person, could be taken by suchPerson.8.4 RETURN OF CAPITAL No Limited Partner shall be entitled to the withdrawal or return of itsCapital Contribution, except (a) to the extent of such Limited Partner’s rightof redemption set forth in Section 8.6, and (b) to the extent that the GeneralPartner (or the Liquidator) determines to make distributions made pursuant tothis Agreement or upon termination of the Partnership as provided herein. Exceptas otherwise expressly provided in this Agreement, no Limited Partner orAssignee shall have priority over any other Limited Partner or Assignee, eitheras to the return of Capital Contributions or as to distributions or allocationsof Profits or Losses.8.5 RIGHTS OF LIMITED PARTNERS RELATING TO THE PARTNERSHIP (a) General. In addition to the other rights provided by this Agreement andany rights granted to limited partners of a limited partnership under the Actthat such limited partners are not permitted to waive under the Act, and exceptas limited by Section 8.5(b) hereof, each Limited Partner shall have the right,for a purpose reasonably related to such Limited Partner’s interest as a limitedpartner in the Partnership, upon written demand with a statement of the purposeof such demand and at such Limited Partner’s own expense (including suchreasonable copying and administrative charges as the General Partner mayestablish from time to time): (i) to obtain a copy of the most recent annual and quarterly reports filed with the Securities and Exchange Commission by the General Partner pursuant to the Securities Exchange Act of 1934; (ii) to obtain a copy of the Partnership’s Federal, state and local income tax returns for each Fiscal Year; (iii) to obtain a current list of the name and last known business, residence or mailing address of each Partner; and (iv) to obtain a copy of this Agreement and the Certificate and all amendments thereto, together with executed copies of all powers of attorney pursuant to which this Agreement, the Certificate and all amendments thereto have been executed.Each Limited Partner hereby waives any and all rights that such Limited Partnermay have under the Act that the Act permits limited partners to waive, exceptany such right that is granted expressly to such Limited Partner under thisAgreement. (b) Confidentiality. Notwithstanding any other provision of this Section8.5, the General Partner may keep confidential from the Limited Partners, forsuch period of time as the -37-General Partner determines in its sole and absolute discretion to be reasonable,any information that: (i) the General Partner reasonably believes to be in the nature of trade secrets or other information, the disclosure of which the General Partner in good faith believes is not in the best interests of the Partnership or could damage the Partnership or its business; or (ii) the Partnership is required by law or by agreements with an unaffiliated third party to keep confidential.8.6 REDEMPTION RIGHT (a) Redemption Right. Subject to the provisions of this Section 8.6, at anytime on or after the first anniversary date of the issuance of a PartnershipUnit to a Partner, such Partner shall have the right (the “Redemption Right”) torequire the Partnership to redeem on a Specified Redemption Date all or aportion of the Partnership Units held by such Partner, at a redemption priceequal to and in the form of the Redemption Amount. The Redemption Right shall beexercised pursuant to a Notice of Redemption Request delivered to the GeneralPartner by the Partner who is exercising the Redemption Right (the “RedeemingPartner”). (b) Distributions and Allocations. (i) Subject to Section 8.6(c), the Redeeming Partner shall have no right to receive any distributions that are paid after the Specified Redemption Date with respect to any Partnership Units redeemed pursuant to this Section 8.6. (ii) If any Partnership Interest is redeemed (other than pursuant to Section 8.6(c)) on any day other than the first day of a Fiscal Year, then Profit, Losses, each item thereof and all other items attributable to such Partnership Interest for such Fiscal Year shall be divided and allocated to the Redeeming Partner by taking into account the Redeeming Partner’s ownership of such Partnership Interest during the Fiscal Year in accordance with Section 706(d) of the Code, using the interim closing of the books method (unless the General Partner, in its sole and absolute discretion, elects to adopt a daily, weekly or monthly proration period, in which event Profits, Losses, each item thereof and all other items attributable to such redeemed Partnership Interest for such Fiscal Year shall be prorated based upon the applicable method selected by the General Partner). (c) General Partner Assumption of Obligation. Notwithstanding theprovisions of Section 8.6(a), the General Partner may, in its sole and absolutediscretion (subject to the limitations on ownership and transfer of shares ofREIT Stock in the Articles of Incorporation), assume directly the obligation tosatisfy a Redemption Right and satisfy such Redemption Right by paying to theRedeeming Partner the Redemption Amount on the Specified Redemption Date,whereupon the General Partner shall acquire the Partnership Units offered forredemption by the Redeeming Partner and shall be treated for all purposes ofthis Agreement as the owner of such Partnership Units. In the event that theGeneral Partner shall exercise this right to satisfy the Redemption Right in themanner described in the preceding sentence and shall fully perform itsobligation to pay the Redemption Amount on the Specified Redemption Date, thePartnership shall have no obligation to pay any amount to the Redeeming Partnerwith respect to such Redeeming Partner’s exercise of the Redemption Right, andeach of the Redeeming Partner, the -38-Partnership and the General Partner shall treat the transaction between theGeneral Partner and the Redeeming Partner as a sale of the Redeeming Partner’sPartnership Units to the General Partner for Federal income tax purposes.Distributions and allocations with respect to Partnership Units acquired by theGeneral Partner pursuant to this Section 8.6(c) shall be made in accordance withSections 11.6(c) and 11.6(d). (d) Fractional Shares. If the General Partner elects, either on its ownbehalf or on behalf of the Partnership, to satisfy the Redemption Right bypaying the REIT Stock Amount, and the REIT Stock Amount is not equal to a wholenumber of shares of REIT Stock, the Redeeming Partner shall be paid (i) thatnumber of shares of REIT Stock which equals the nearest whole number less thanthe REIT Stock Amount, plus (ii) (A) an amount of cash equal to the Value of oneshare of REIT Stock on the applicable Valuation Date, multiplied by (B) the REITStock Amount minus the whole number of shares of REIT Stock pursuant to clause(i) of this Section 8.6(d). (e) Execution of Documents. Each Redeeming Partner agrees to execute suchdocuments as the General Partner may reasonably require in connection with (i)the exercise and satisfaction of the Redemption Right, (ii) any assumption bythe General Partner pursuant to Section 8.6(c), and (iii) any issuance of REITStock in connection with the Partnership or the General Partner paying theRedemption Amount to the Redeeming Partner. (f) Exceptions to Redemption Right. Notwithstanding the provisions ofSection 8.6(a), unless the General Partner elects for payment of the RedemptionAmount by the Partnership to be the Cash Amount, a Partner shall not be entitledto exercise the Redemption Right if the delivery of REIT Stock to such Partneron the Specified Redemption Date would (i) be prohibited under the Articles ofIncorporation or the bylaws of the General Partner, (ii) adversely affect theability of the General Partner to continue to qualify as a REIT or would subjectthe General Partner to any additional taxes under Sections 857 or 4981 of theCode, (iii) constitute or be likely to constitute a violation of any applicablefederal or state securities laws or regulations, or (iv) be prohibited underSection 11.6(f) of this Agreement (in each case regardless of whether theGeneral Partner would in fact assume and satisfy the Redemption Right). (g) Exercise of the Redemption Right by the General Partner. The receipt ofa notice of redemption with respect to shares of REIT Stock held by stockholdersof the General Partner (a “REIT Notice”) shall be deemed to be a Notice ofRedemption Request given by the General Partner to the Partnership. Theredemption by the REIT of REIT Stock pursuant to a REIT Notice shall be deemedan exercise of the Redemption Right with respect to a number of PartnershipUnits equal to the number of shares of REIT Stock identified in the REIT Notice.With respect to any Redemption Right exercised by the General Partner pursuantto this Section 8.6(g), the General Partner will elect for payment of theRedemption Amount by the Partnership to the General Partner to be the CashAmount. (h) Assignees. The Assignee of any Limited Partner may exercise the rightsof such Limited Partner pursuant to this Section 8.6 with respect to anyPartnership Units Transferred by such Limited Partner to such Assignee, and suchLimited Partner shall be deemed to have assigned such rights to such Assigneeand shall be bound by the exercise of such rights by such Assignee. Inconnection with any exercise of such rights by such Assignee on behalf of suchLimited Partner, the Redemption Amount shall be paid by the Partnership directlyto such Assignee and not to such Limited Partner. -39- (i) No Liens on Partnership Units Delivered for Redemption. Each Partnercovenants and agrees that all Partnership Units delivered for redemptionpursuant to this Section 8.6 shall be delivered to the Partnership or theGeneral Partner, as the case may be, free and clear of all Liens.Notwithstanding anything contained herein to the contrary, neither the GeneralPartner nor the Partnership shall be under any obligation to acquire PartnershipUnits which are or may be subject to any Liens. Each Partner further agreesthat, if any state or local property transfer tax is payable as a result of theTransfer of its Partnership Units to the Partnership or the General Partnerpursuant to this Section 8.6, such Partner shall assume and pay such transfertax. (j) Cancellation of Units; Amendments to Exhibit A. Upon the redemption ofPartnership Units pursuant to this Section 8.6, (i) all such redeemedPartnership Units (other than Partnership Units redeemed pursuant to Section8.6(c)) shall be cancelled, and (ii) the General Partner shall amend Exhibit Ato reflect the new Percentage Interests of the Partners and to (A) either adjustthe number of Partnership Units and the Percentage Interest of the RedeemingPartner or eliminate the Redeeming Partner from Exhibit A, as applicable, and(B) in the event that the General Partner assumes the obligation to satisfy aRedemption Right pursuant to Section 8.6(c), adjust the number of PartnershipUnits and the Percentage Interest of the General Partner to reflect the Transferof such Partnership Units to the General Partner. (k) Additional Partnership Interests. If the Partnership issues PartnershipInterests to any Additional Limited Partner pursuant to Article 4, the GeneralPartner shall make such revisions to this Section 8.6 as the General Partnerdetermines are necessary to reflect the issuance of such Partnership Interests(including setting forth any restrictions on the exercise of the RedemptionRight with respect to such Partnership Interests). (l) Redemptions by the Advisor. For so long as the Advisor remains theadvisor to the Partnership and General Partner under the Advisory Agreement,neither the Advisor nor any Affiliate of the Advisor (other than the GeneralPartner) may redeem any portion of the Partnership Units held by such Person;provided that, upon the occurrence of a Listing Event, immediately following thedistribution to the Advisor of all amounts required to be distributed to theAdvisor pursuant to Section 5.1(d), the Partnership shall redeem all of thePartnership Units held by the Advisor and its Affiliates (other than the GeneralPartner), at a redemption price equal to and in the form of the RedemptionAmount. In addition, upon the occurrence of a Termination Event, immediatelyfollowing the distribution to the Advisor of all amounts required to bedistributed to the Advisor pursuant to Section 5.1(e) (including, but notlimited to the repayment of the Termination Note in full, if applicable), thePartnership shall redeem all of the Partnership Units held by the Advisor andits Affiliates (other than the General Partner), at a redemption price equal toand in the form of the Redemption Amount. With respect to any automaticredemption of Partnership Units held by the Advisor or its Affiliates (otherthan the General Partner) pursuant to this Section 8.6(l), the General Partnerwill elect for payment of the Redemption Amount by the Partnership to theAdvisor and/or any such Affiliate to be the Cash Amount. ARTICLE 9 BOOKS, RECORDS, ACCOUNTING AND REPORTS9.1 RECORDS AND ACCOUNTING (a) Books and Records. The General Partner shall keep or cause to be keptat the principal office of the Partnership those records and documents requiredto be maintained by the Act and other books and records deemed by the GeneralPartner to be appropriate with respect to the Partnership’s business, including,without limitation, all books and records necessary for the -40-General Partner to comply with applicable REIT Requirements and to provide tothe Limited Partners any information, lists and copies of documents required tobe provided pursuant to Sections 8.5(a) and 9.2 hereof. (b) Accounting Method. The books of the Partnership shall be maintained,for financial and tax reporting purposes, on an accrual basis in accordance withGAAP.9.2 REPORTS (a) Annual Reports. As soon as practicable after the end of each FiscalYear, but in no event later than the date on which the General Partner mails itsannual report to its stockholders, the General Partner shall cause to be mailedto each Limited Partner as of the close of the Fiscal Year, an annual reportcontaining financial statements of the Partnership, or of the General Partner,if such statements are prepared on a consolidated basis with the Partnership,for such Fiscal Year, presented in accordance with GAAP, such statements to beaudited by a nationally recognized firm of independent public accountantsselected by the General Partner in its sole discretion. (b) Quarterly Reports. If and to the extent that the General Partner mailsquarterly reports to its stockholders, then as soon as practicable after the endof each fiscal quarter of the Partnership, but in no event later than the datesuch reports are mailed, the General Partner shall cause to be mailed to eachLimited Partner a report containing unaudited financial statements as of thelast day of the calendar quarter of the Partnership, or of the General Partner,if such statements are prepared on a consolidated basis with the Partnership,and such other information as may be required by applicable law or regulation,or as the General Partner determines to be appropriate. (c) Delivery. Notwithstanding the foregoing, the General Partner maydeliver to the Limited Partners each of the reports described above, as well asany other communications that it may provide hereunder, by e-mail or by anyother electronic means. ARTICLE 10 TAX MATTERS10.1 PREPARATION OF TAX RETURNS The General Partner shall arrange for the preparation and timely filing ofall returns of Partnership income, gains, deductions, losses and other itemsrequired of the Partnership for federal and state income tax purposes and shalluse all reasonable efforts to furnish, within ninety (90) days of the close ofeach taxable year, the tax information reasonably required by Limited Partnersfor federal and state income tax reporting purposes.10.2 TAX ELECTIONS Except as otherwise provided herein, the General Partner shall, in its soleand absolute discretion, determine whether to make any available electionpursuant to the Code; provided, however, that the General Partner shall make theelection under Section 754 of the Code in accordance with applicable regulationsthereunder. The General Partner shall have the right to seek to revoke any suchelection it makes, including, without limitation, the election under Section 754of the Code, upon the General Partner’s determination, in its sole and absolutediscretion, that such revocation is in the best interests of the Partners. -41-10.3 TAX MATTERS PARTNER (a) General. The General Partner shall be the “tax matters partner” of thePartnership for federal income tax purposes. Pursuant to Section 6223(c)(3) ofthe Code, upon receipt of notice from the Internal Revenue Service of thebeginning of an administrative proceeding with respect to the Partnership, thetax matters partner shall furnish the Internal Revenue Service with the name,address, taxpayer identification number, and profit interest of each of theLimited Partners and the Assignees; provided, that such information is providedto the Partnership by the Limited Partners and the Assignees. (b) Powers. The tax matters partner is authorized, but not required: (i) to enter into any settlement with the Internal Revenue Service with respect to any administrative or judicial proceedings for the adjustment of Partnership items required to be taken into account by a Partner for income tax purposes (such administrative proceedings being referred to as a “tax audit” and such judicial proceedings being referred to as “judicial review”), and in the settlement agreement the tax matters partner may expressly state that such agreement shall bind all Partners, except that such settlement agreement shall not bind any Partner: (A) who (within the time prescribed pursuant to the Code and the Treasury Regulations) files a statement with the Internal Revenue Service providing that the tax matters partner shall not have the authority to enter into a settlement agreement on behalf of such Partner; or (B) who is a “notice partner” (as defined in Section 6231(a)(8) of the Code) or a member of a “notice group” (as defined in Section 6223(b)(2) of the Code); (ii) in the event that a notice of a final administrative adjustment at the Partnership level of any item required to be taken into account by a Partner for tax purposes (a “final adjustment”) is mailed to the tax matters partner, to seek judicial review of such final adjustment, including the filing of a petition for readjustment with the Tax Court or the filing of a complaint for refund with the United States Claims Court or the District Court of the United States for the district in which the Partnership’s principal place of business is located; (iii) to intervene in any action brought by any other Partner for judicial review of a final adjustment; (iv) to file a request for an administrative adjustment with the Internal Revenue Service and, if any part of such request is not allowed by the Internal Revenue Service, to file an appropriate pleading (petition or complaint) for judicial review with respect to such request; (v) to enter into an agreement with the Internal Revenue Service to extend the period for assessing any tax which is attributable to any item required to be taken account of by a Partner for tax purposes, or an item affected by such item; and -42- (vi) to take any other action on behalf of the Partners or the Partnership in connection with any tax audit or judicial review proceeding to the extent permitted by applicable law or regulations. The taking of any action and the incurring of any expense by the tax matters partner in connection with any such proceeding, except to the extent required by law, is a matter in the sole and absolute discretion of the tax matters partner and the provisions relating to indemnification of the General Partner set forth in Section 7.6 of this Agreement shall be fully applicable to the tax matters partner in its capacity as such. (c) Reimbursements. The tax matters partner shall receive no compensationfor its services. All third party costs and expenses incurred by the tax matterspartner in performing its duties as such (including legal and accounting feesand expenses) shall be borne by the Partnership. Nothing herein shall beconstrued to restrict the Partnership from engaging an accounting firm to assistthe tax matters partner in discharging its duties hereunder, so long as thecompensation paid by the Partnership for such services is reasonable.10.4 ORGANIZATIONAL EXPENSES The Partnership shall elect to deduct expenses, if any, incurred by it inorganizing the Partnership ratably over a sixty (60) month period as provided inSection 709 of the Code.10.5 WITHHOLDING (a) General. Each Limited Partner hereby authorizes the Partnership towithhold from, or pay on behalf of or with respect to, such Limited Partner anyamount of federal, state, local, or foreign taxes that the General Partnerdetermines that the Partnership is required to withhold or pay with respect toany amount distributable or allocable to such Limited Partner pursuant to thisAgreement, including, without limitation, any taxes required to be withheld orpaid by the Partnership pursuant to Sections 1441, 1442, 1445 or 1446 of theCode. (b) Treatment of Amounts Withheld. Any amount paid on behalf of or withrespect to a Limited Partner shall constitute a loan by the Partnership to suchLimited Partner, which loan shall be repaid by such Limited Partner withinfifteen (15) days after notice from the General Partner that such payment mustbe made unless: (i) the Partnership withholds such payment from a distribution which would otherwise be made to the Limited Partner; or (ii) the General Partner determines, in its sole and absolute discretion, that such payment may be satisfied out of the available funds of the Partnership which would, but for such payment, be distributed to the Limited Partner.Any amounts withheld from amounts otherwise distributable to a Limited Partneras described in clause (i) or (ii) of this Section 10.5(b) shall be treated ashaving been distributed to such Limited Partner. (c) Security Interest. Each Limited Partner hereby unconditionally andirrevocably grants to the Partnership a security interest in such LimitedPartner’s Partnership Interest to secure such Limited Partner’s obligation topay to the Partnership any amounts required to be paid pursuant to this Section10.5. Each Limited Partner shall take such actions as the Partnership or theGeneral Partner shall request in order to perfect or enforce the securityinterest created hereunder. -43- (d) Default. In the event that a Limited Partner fails to pay when due anyamounts owed to the Partnership pursuant to this Section 10.5, the GeneralPartner may, in its sole and absolute discretion, elect to make the payment tothe Partnership on behalf of such defaulting Limited Partner, and in such eventshall be deemed to have loaned such amount to such defaulting Limited Partnerand shall succeed to all rights and remedies of the Partnership as against suchdefaulting Limited Partner. Without limitation, in such event, the GeneralPartner shall have the right to receive distributions that would otherwise bedistributable to such defaulting Limited Partner until such time as such loan,together with all interest thereon, has been paid in full, and any suchdistributions so received by the General Partner shall be treated as having beendistributed to the defaulting Limited Partner and immediately paid by thedefaulting Limited Partner to the General Partner in repayment of such loan. (e) Interest. Any amount payable by a Limited Partner under this Section10.5 shall bear interest at the lesser of (i) the base rate on corporate loansat large United States money center commercial banks, as published from time totime in The Wall Street Journal, plus four (4) percentage points, and (ii) themaximum lawful rate of interest on such obligation, such interest to accrue fromthe date such amount is due (i.e., fifteen (15) days after demand) until suchamount is paid in full. ARTICLE 11 TRANSFERS AND WITHDRAWALS11.1 TRANSFER (a) Definition. The term “Transfer,” when used in this Article 11 withrespect to a Partnership Interest or a Partnership Unit, shall be deemed torefer to a transaction by which the General Partner purports to assign all orany part of its General Partner Interest to another Person or a Limited Partnerpurports to assign all or any part of its Limited Partner Interest to anotherPerson, and includes a sale, assignment, gift, pledge, encumbrance,hypothecation, mortgage, exchange or any other disposition by law or otherwise.The term “Transfer” when used in this Article 11 does not include any redemptionof Partnership Units or other Partnership Interests for cash or REIT Stockpursuant to Section 8.6. (b) Restriction on Transfer. No Partnership Interest shall be Transferred,in whole or in part, except in accordance with the terms and conditions setforth in this Article 11. Any Transfer or purported Transfer of a PartnershipInterest not made in accordance with this Article 11 shall be null and void.11.2 TRANSFER OF THE GENERAL PARTNER’S GENERAL PARTNER INTEREST (a) The General Partner may not Transfer any of its General PartnerInterest or withdraw as General Partner, except: (i) with the Consent of the Outside Limited Partners; or (ii) if such Transfer is to an entity which is wholly-owned, directly or indirectly, by the General Partner. -44- (b) In the event the General Partner withdraws as general partner of thePartnership in accordance with Section 11.2(a), the General Partner’s GeneralPartner Interest shall immediately be converted into a Limited Partner Interest.11.3 LIMITED PARTNERS’ RIGHTS TO TRANSFER (a) General. Subject to the provisions of Section 11.3(b), no LimitedPartner shall have the right to Transfer all or a portion of such LimitedPartner’s Partnership Interest, or any of such Limited Partner’s rights as aLimited Partner, without the consent of the General Partner, which may be givenor withheld by the General Partner in its sole and absolute discretion. (b) Transfers to Permitted Transferees. Notwithstanding the provisions ofSection 11.3(a), but subject to the provisions of Sections 11.3(c), 11.3(d), and11.3(e) and other applicable restrictions on Transfers contained in this Article11, a Limited Partner may Transfer, with or without the consent of the GeneralPartner, all or a portion of his Partnership Units to a Permitted Transferee;provided that such Permitted Transferee must qualify as “accredited investor” assuch term is defined in Rule 501(a) of Regulation D promulgated under theSecurities Act; and provided further that, no Transfer pursuant to this Section11.3(b) shall be effective until the General Partner receives notice of suchTransfer. (c) No Transfers Violating Securities Laws. The General Partner mayprohibit any Transfer by a Limited Partner of its Partnership Units if, in theopinion of legal counsel to the Partnership, such Transfer would require thefiling of a registration statement under the Securities Act, or would otherwiseviolate any federal or state securities laws or regulations applicable to thePartnership or the Partnership Units. (d) No Transfers to Certain Lenders. No Transfer of any Partnership Unitsmay be made to a lender to the Partnership or any Person who is related (withinthe meaning of Treasury Regulations Section 1.752-4(b)) to any lender to thePartnership whose loan constitutes a nonrecourse liability (within the meaningof Treasury Regulations Section 1.752-1(a)(2)), without the consent of theGeneral Partner, which may be withheld in its sole and absolute discretion. (e) Additional Prohibited Transfers. No Transfer by a Limited Partner ofits Partnership Units may be made to any Person if: (i) in the opinion the General Partner based on the advice of legal counsel, if appropriate, it would adversely affect the ability of the General Partner to continue to qualify as a REIT or would subject the General Partner to any additional taxes under Sections 857 or 4981 of the Code; (ii) in the opinion of the General Partner based on the advice of legal counsel, if appropriate, it would result in the Partnership being treated as an association taxable as a corporation for federal income tax purposes; (iii) such Transfer would subject the Partnership to regulation under the Investment Company Act of 1940, the Investment Advisers Act of 1940, as amended or ERISA; -45- (iv) such Transfer is effectuated through an “established securities market” or a “secondary market (or the substantial equivalent thereof)” within the meaning of Section 7704 of the Code; or (v) such Transfer is to a Prohibited Transferee. (f) Incapacitated Limited Partners. If a Limited Partner is Incapacitated,the executor, administrator, trustee, committee, guardian, conservator orreceiver of such Limited Partner’s estate shall have all of the rights of aLimited Partner, but not more rights than those enjoyed by other LimitedPartners, for the purpose of settling or managing the estate and such power asthe Incapacitated Limited Partner possessed to Transfer all or any part of hisor its interest in the Partnership. The Incapacity of a Limited Partner, in andof itself, shall not dissolve or terminate the Partnership. (g) Transfers by the Advisor. For so long as the Advisor remains theadvisor to the Partnership and General Partner under the Advisory Agreement,neither the Advisor nor any Affiliate of the Advisor (other than the GeneralPartner) may Transfer any portion of the Partnership Units held by the Advisorto any Person, other than (i) Transfers to any Affiliate of the Advisor, and(ii) deemed Transfers to the General Partner pursuant to Section 8.6(c).11.4 SUBSTITUTED LIMITED PARTNERS (a) Consent of the General Partner. No Limited Partner shall have the rightto substitute a Permitted Transferee in such Limited Partner’s place. TheGeneral Partner shall, however, have the right to consent to the admission of aPermitted Transferee of the Partnership Interest of a Limited Partner pursuantto this Section 11.4 as a Substitute Limited Partner, which consent may be givenor withheld by the General Partner in its sole and absolute discretion. TheGeneral Partner’s failure or refusal to permit such transferee to become aSubstituted Limited Partner shall not give rise to any cause of action againstthe Partnership or any Partner. (b) Rights of a Substituted Limited Partner. A transferee who has beenadmitted as a Substituted Limited Partner in accordance with this Article 11shall have all the rights and powers and be subject to all the restrictions andliabilities of a Limited Partner under this Agreement. The admission of anytransferee as a Substituted Limited Partner shall be conditioned upon thetransferee executing and delivering to the Partnership an acceptance of all ofthe terms and conditions of this Agreement, including, without limitation, thepower of attorney granted in Section 2.6, and such other documents orinstruments as may be required in the reasonable discretion of the GeneralPartner in order to effect such Person’s admission as a Substituted LimitedPartner. (c) Amendments to Exhibit A. Upon the admission of a Substituted LimitedPartner, the General Partner shall amend Exhibit A to reflect the name, address,number of Partnership Units, and Percentage Interest of such Substituted LimitedPartner and to eliminate or adjust, if necessary, the name, address and interestof the predecessor of such Substituted Limited Partner.11.5 ASSIGNEES If the General Partner, in its sole and absolute discretion, does notconsent to the admission of any transferee as a Substituted Limited Partner, asdescribed in Section 11.4(a), such transferee shall be considered an Assigneefor purposes of this Agreement. An Assignee shall be deemed to have had assignedto it, and shall be entitled to receive distributions from the -46-Partnership and the share of Profit, Losses and any other items of gain, loss,deduction or credit of the Partnership attributable to the Partnership Unitsassigned to such transferee, but shall not be deemed to be a holder ofPartnership Units for any other purpose under this Agreement except as otherwiseprovided in this Agreement, and shall not be entitled to vote such PartnershipUnits in any matter presented to the Limited Partners for a vote (suchPartnership Units being deemed to have been voted on such matter in the sameproportion as all other Partnership Units held by Limited Partners are voted).In the event any such transferee desires to make a further assignment of anysuch Partnership Units, such transferee shall be subject to all of theprovisions of this Article 11 to the same extent and in the same manner as anyLimited Partner desiring to make an assignment of Partnership Units.11.6 GENERAL PROVISIONS (a) Withdrawal of a Limited Partner. No Limited Partner may withdraw fromthe Partnership other than as a result of a Transfer of all of such LimitedPartner’s Partnership Units pursuant to which the transferee is admitted as aSubstituted Limited Partner or a redemption of all of the Partnership Units heldby such Limited Partner pursuant to Section 8.6. (b) Termination of Status as a Limited Partner. Any Limited Partner that(i) Transfers all of such Limited Partner’s Partnership Units (or otherPartnership Interests) in a Transfer pursuant to which the transferee isadmitted as a Substituted Limited Partner, or (ii) redeems all of such thePartnership Units held by such Limited Partner pursuant to Section 8.6 shallcease to be a Limited Partner. (c) Allocations. If any Partnership Interest is Transferred during thePartnership’s Fiscal Year in compliance with the provisions of this Article 11(including Transfers to the General Partner pursuant to Section 8.6(c)) on anyday other than the first day of a Fiscal Year, then Profit, Losses, each itemthereof and all other items attributable to such Partnership Interest for suchFiscal Year shall be divided and allocated between the transferor Partner andthe transferee Partner by taking into account their varying interests during theFiscal Year in accordance with Section 706(d) of the Code, using the interimclosing of the books method (unless the General Partner, in its sole andabsolute discretion, elects to adopt a daily, weekly or monthly prorationperiod, in which event Profits, Losses, each item thereof and all other itemsattributable to such transferred Partnership Interest for such Fiscal Year shallbe prorated based upon the applicable method selected by the General Partner). (d) Distributions. All distributions of Available Operating Cash, Net SalesProceeds or other Partnership Assets attributable to Partnership Units, withrespect to which the Partnership Record Date is before the date of a Transfer ofsuch Partnership Units (including any Transfer to the General Partner pursuantto Section 8.6(c)), shall be made to the transferor Partner, and alldistributions of Available Operating Cash, Net Sales Proceeds or otherPartnership Assets thereafter attributable to such Partnership Units shall bemade to the transferee Partner. (e) Capital Accounts. The original Capital Account established for eachtransferee shall be in the same amount as the Capital Account or portion thereofof the Partner to which such transferee succeeds, at the time such transferee isadmitted to the Partnership. The Capital Account of any Partner whose PercentageInterest shall be increased by means of the Transfer to it of all or part of thePartnership Interest of another Partner shall be appropriately adjusted toreflect such Transfer. Any reference in this Agreement to a Capital Contributionof, or distribution to, a then-Partner shall include a Capital Contribution ordistribution previously made by or to any prior Partner on account of thePartnership Interest of such then-Partner. -47- (f) Additional Restrictions. In addition to any other restrictions ontransfer contained in this Agreement, in no event may any Transfer of aPartnership Interest by any Partner or any redemption pursuant to Section 8.6 bemade without the express consent of the General Partner, in its sole andabsolute discretion, (i) to any person or entity who lacks the legal right,power or capacity to own a Partnership Interest; (ii) in violation of applicablelaw; (iii) of any component portion of a Partnership Interest, such as theCapital Account, or rights to distributions, separate and apart from all othercomponents of a Partnership Interest; (iv) if in the opinion of the GeneralPartner based on the advice of legal counsel, if appropriate, such Transferwould cause a termination of the Partnership for Federal or state income taxpurposes (except as a result of a redemption of all Partnership Units held byall Limited Partners); (v) if in the opinion of the General Partner based on theadvice of legal counsel, if appropriate, such Transfer would cause thePartnership to cease to be classified as a partnership for Federal income taxpurposes (except as a result of a redemption of all Partnership Units held byall Limited Partners); (vi) if such Transfer requires the registration of suchPartnership Interest pursuant to any applicable federal or state securitieslaws; (vii) if such Transfer would cause the Partnership to become a “publiclytraded partnership,” as such term is defined in Section 7704(b) of the Code(provided that this clause (vii) shall not be the basis for limiting orrestricting in any manner the exercise of the Redemption Right under Section 8.6unless, and only to the extent that, outside tax counsel advises the GeneralPartner that, in the absence of such limitation or restriction, there is asignificant risk that the Partnership will be treated as a “publicly tradedpartnership” and, by reason thereof, taxable as a corporation); (viii) if suchTransfer would cause the General Partner to own 10% or more of the ownershipinterests of any tenant of a property held by the Partnership within the meaningof Section 856(d)(2)(B) of the Code; (ix) if such Transfer would result in theGeneral Partner being “closely held” within the meaning of Section 856(h) of theCode; or (x) if in the opinion the General Partner based on the advice of legalcounsel, if appropriate, such Transfer would adversely affect the ability of theGeneral Partner to continue to qualify as a REIT or subject the General Partnerto any additional taxes under Sections 857 or 4981 of the Code. ARTICLE 12 ADMISSION OF PARTNERS12.1 ADMISSION OF SUCCESSOR GENERAL PARTNER A successor to all of the General Partner Interest pursuant to Article 11hereof who is proposed to be admitted as a successor General Partner shall beadmitted to the Partnership as the General Partner, effective immediatelyfollowing the successor General Partner’s execution and delivery to thePartnership of an acceptance of all of the terms and conditions of thisAgreement and such other documents or instruments as may be required orappropriate to effect such Person’s admission as General Partner. In the case ofsuch admission on any day other than the first day of a Fiscal Year, all itemsattributable to the General Partner Interest for such Fiscal Year shall beallocated between the transferring General Partner and such successor asprovided in Section 11.6(c) hereof. Any such successor General Partner shallcarry on the business of the Partnership without dissolution.12.2 ADMISSION OF ADDITIONAL LIMITED PARTNERS (a) General. A Person other than the General Partner and the InitialLimited Partner who makes a Capital Contribution to the Partnership inaccordance with this Agreement shall be admitted to the Partnership as anAdditional Limited Partner only upon executing and delivering to the GeneralPartner: -48- (i) evidence of acceptance in form satisfactory to the General Partner of all of the terms and conditions of this Agreement, including, without limitation, the power of attorney granted in Section 2.6 hereof; and (ii) such other documents or instruments as may be required in the discretion of the General Partner in order to effect such Person’s admission as an Additional Limited Partner. (b) General Partner’s Consent Required. Notwithstanding anything to thecontrary in this Section 12.2, no Person shall be admitted as an AdditionalLimited Partner without the consent of the General Partner, which consent may begiven or withheld in the General Partner’s sole and absolute discretion. Theadmission of any Person as an Additional Limited Partner shall become effectiveon the date upon which the name of such Person is recorded on the books andrecords of the Partnership, following the consent of the General Partner to suchadmission and the satisfaction of the conditions set forth in Section 12.2(a). (c) Allocations to Additional Limited Partners. If any Additional LimitedPartner is admitted to the Partnership on any day other than the first day of aFiscal Year, then Profit, Losses, each item thereof and all other itemsallocable among Partners and Assignees for such Fiscal Year shall be allocatedamong such Additional Limited Partner and all other Partners and Assignees bytaking into account their varying interests during the Fiscal Year in accordancewith Section 706(d) of the Code, using the interim closing of the books method.Solely for purposes of making such allocations, each of such items for thecalendar month in which an admission of any Additional Limited Partner occursshall be allocated among all of the Partners and Assignees, including suchAdditional Limited Partner.12.3 AMENDMENT OF AGREEMENT AND CERTIFICATE OF LIMITED PARTNERSHIP For the admission to the Partnership of any Partner, the General Partnershall take all steps necessary and appropriate under the Act to amend therecords of the Partnership and, if necessary, to prepare as soon as practical anamendment of this Agreement (including an amendment of Exhibit A) and, ifrequired by law, shall prepare and file an amendment to the Certificate and mayfor this purpose exercise the power of attorney granted pursuant to Section 2.6hereof. ARTICLE 13 DISSOLUTION, LIQUIDATION AND TERMINATION13.1 DISSOLUTION The Partnership shall not be dissolved by the admission of SubstitutedLimited Partners or Additional Limited Partners or by the admission of asuccessor General Partner in accordance with the terms of this Agreement.Subject to Section 13.1(b), upon the withdrawal of the General Partner, anysuccessor General Partner shall continue the business of the Partnership. ThePartnership shall dissolve, and its affairs shall be wound up, only upon thefirst to occur of any of the following (“Liquidating Events”): (a) the expiration of its term as provided in Section 2.5 hereof; -49- (b) an event of withdrawal of the General Partner, as defined in the Act(other than an event of bankruptcy), unless, within ninety (90) days after suchevent of withdrawal, a “majority in interest” (as defined below) of theremaining Partners Consent in writing to continue the business of thePartnership and to the appointment, effective as of the date of withdrawal, of asuccessor General Partner; (c) an election to dissolve the Partnership made by the General Partner, inits sole and absolute discretion; (d) entry of a decree of judicial dissolution of the Partnership pursuantto the provisions of the Act; (e) the occurrence of a Terminating Sale Transaction; or (f) a final and non-appealable judgment is entered by a court of competentjurisdiction ruling that the General Partner or the Partnership is bankrupt orinsolvent, or a final and non-appealable order for relief is entered by a courtwith appropriate jurisdiction against the General Partner or the Partnership, ineach case under any federal or state bankruptcy or insolvency laws as now orhereafter in effect, unless prior to the entry of such order or judgment a”majority in interest” (as defined below) of the remaining Partners Consent inwriting to continue the business of the Partnership and to the appointment,effective as of a date prior to the date of such order or judgment, of asubstitute General Partner, if applicable.As used in this Article 13, a “majority in interest” shall refer to Partners(excluding the General Partner) who hold Partnership Units that constitute morethan fifty percent (50%) of the aggregate number of outstanding PartnershipUnits not held by the General Partner.13.2 WINDING UP; LIQUIDATION (a) Upon dissolution of the Partnership, the business and affairs of thePartnership shall be wound up as provided in this Section 13.2. The GeneralPartner shall act as the “Liquidator” (or, in the event there is no remainingGeneral Partner, any Person elected by Limited Partners holding more than 50% ofthe total number of Partnership Units then issued and outstanding). TheLiquidator shall wind up the affairs of the Partnership, shall dispose of suchPartnership Assets as it deems necessary or appropriate and shall pay anddistribute the assets of the Partnership, including the proceeds of any suchdisposition, as follows: (i) first, to creditors, including Partners who are creditors, to the extent otherwise permitted by law, in satisfaction of liabilities of the Partnership (whether by payment or by establishment or reserves as determined by the Liquidator in its sole discretion), other than distributions to Partners pursuant to Article 5, and (ii) second, to the Partners in accordance with their positive Capital Account balances. It is intended that such distributions will result in the Partners receiving aggregate distributions in the order of and equal to the amount of distributions that would have been received if the liquidating distributions were made in accordance with Section 5.1. However, if the balances in the Capital Accounts do not result in such intention being satisfied, items of Profits and Losses will be reallocated among the Partners for the Fiscal Year of the liquidation (and, at the election of the General Partner, if necessary and -50- permissible, prior Fiscal Years) so as to cause the balances in the Capital Accounts to be in the amounts necessary to assure that such result is achieved. Notwithstanding anything herein to the contrary, in the event the Partnership is liquidated within the meaning of Treasury Regulation Section 1.704-1(b)(2)(ii)(g), liquidation distributions shall be made by the end of the taxable year in which the Partnership liquidates or, if later, within ninety (90) days of the date of such liquidation. (b) In the discretion of the Liquidator, a pro rata portion of thedistributions that would otherwise be made to the Partners pursuant to thisArticle 13 may be: (i) distributed to a trust established for the benefit of the General Partner and Limited Partners for the purposes of liquidating Partnership assets, collecting amounts owed to the Partnership, and paying any contingent or unforeseen liabilities or obligations of the Partnership or the General Partner arising out of or in connection with the Partnership; the assets of any such trust shall be distributed to the General Partner and Limited Partners from time to time, in the reasonable discretion of the Liquidator, in the same proportions as the amount distributed to such trust by the Partnership would otherwise have been distributed to the General Partner and Limited Partners pursuant to this Agreement; or (ii) withheld or escrowed to provide a reasonable reserve for Partnership liabilities (contingent or otherwise) and to reflect the unrealized portion of any installment obligations owed to the Partnership, provided that such withheld or escrowed amounts shall be distributed to the General Partner and Limited Partners in the manner and order of priority set forth in Section 13.2(a) as soon as practicable. (c) The Liquidator shall, in its sole discretion, determine whether to sellany Partnership Assets, including, without limitation, Real Estate Assets, andif so, whether at a public or private sale, for what price and on what terms. Ifthe Liquidator determines to sell or otherwise dispose of any Partnership Assetor any interest therein, the Liquidator shall do so expeditiously and for itsfair market value under the circumstances, giving due regard to the activity andcondition of the relevant market and general financial and economic conditions.If the Liquidator determines not to sell or otherwise dispose of any PartnershipAsset or any interest therein, the Liquidator shall not be required todistribute the same to the Partners promptly but shall have full right anddiscretion to determine the time and manner of such distribution anddistributions giving due regard to the interests of the Partners.13.3 NO OBLIGATION TO CONTRIBUTE DEFICIT If any Partner has a deficit balance in his Capital Account (after givingeffect to all contributions, distributions and allocations for all taxableyears, including the year during which such liquidation occurs), such Partnershall have no obligation to make any contribution to the capital of thePartnership with respect to such deficit, and such deficit shall not beconsidered a debt owed to the Partnership or to any other Person for any purposewhatsoever.13.4 NOTICE OF DISSOLUTION In the event a Liquidating Event occurs or an event occurs that would, butfor the provisions of an election or objection by one or more Partners pursuantto Section 13.1, result in a dissolution of the Partnership, the General Partnershall, within thirty (30) days thereafter, provide written notice thereof toeach of the Partners. -51-13.5 TERMINATION OF PARTNERSHIP AND CANCELLATION OF CERTIFICATE OF LIMITEDPARTNERSHIP Upon the completion of the liquidation of the Partnership’s assets, asprovided in Section 13.2 hereof, the Partnership shall be terminated, acertificate of cancellation shall be filed, and all qualifications of thePartnership as a foreign limited partnership in jurisdictions other than thestate of Delaware shall be canceled and such other actions as may be necessaryto terminate the Partnership shall be taken.13.6 REASONABLE TIME FOR WINDING-UP A reasonable time shall be allowed for the orderly winding-up of thebusiness and affairs of the Partnership and the liquidation of its assetspursuant to Section 13.2 hereof in order to minimize any losses otherwiseattendant upon such winding-up, and the provisions of this Agreement shallremain in effect among the Partners during the period of liquidation.13.7 WAIVER OF PARTITION Each Partner hereby waives any right to partition of the Partnershipproperty. ARTICLE 14 AMENDMENT OF PARTNERSHIP AGREEMENT; MEETINGS14.1 AMENDMENTS (a) By the General Partner. The General Partner shall have the power,without the consent of the Limited Partners, to amend this Agreement except asset forth in Section 14.1(b) hereof. The General Partner shall provide notice tothe Limited Partners when any action under this Section 14.1(a) is taken in thenext regular communication to the Limited Partners. The Limited Partners shallnot have the power to amend this Agreement. (b) Restrictions on General Partner’s Ability to Amend this Agreement.Notwithstanding Section 14.1(a) hereof, this Agreement shall not be amended withrespect to any Partner adversely affected without the Consent of such Partneradversely affected if such amendment would: (i) convert a Limited Partner’s interest in the Partnership into a General Partner Interest; (ii) impose on the Limited Partners any obligation to make additional Capital Contributions to the Partnership; (iii) modify the limited liability of a Limited Partner in a manner adverse to such Limited Partner; or (iv) amend this Section 14.1(b).14.2 MEETINGS OF THE PARTNERS (a) General. Meetings of the Partners may be called by the General Partnerand shall be called upon the receipt by the General Partner of a written requestby Limited Partners holding -52-twenty-five percent (25%) or more of the Partnership Interests. The requestshall state the nature of the business to be transacted. Notice of any suchmeeting shall be given to all Partners not less than seven (7) days nor morethan thirty (30) days prior to the date of such meeting. Partners may vote inperson or by proxy at such meeting. (b) Vote Required. Whenever the vote or Consent of the Partners ispermitted or required under this Agreement, such vote or Consent may be given ata meeting of the Partners or may be given in accordance with the procedureprescribed in Section 14.2(c) hereof. Except as otherwise expressly provided inthis Agreement, the Consent of holders of Partnership Units that constitute morethan fifty percent (50%) of the aggregate number of outstanding PartnershipUnits held by the Partners (including the General Partner) shall constitute theconsent of the Partners. (c) Action Without a Meeting. Any action required or permitted to be takenat a meeting of the Partners may be taken without a meeting if a written consentsetting forth the action so taken is signed by holders of Partnership Units thatconstitute more than fifty percent (50%) (or such other percentage as isexpressly required by this Agreement) of the aggregate number of outstandingPartnership Units held by the Partners (including the General Partner). Suchconsent may be in one instrument or in several instruments, and shall have thesame force and effect as a vote the holders of Partnership Units that constitutemore than fifty percent (50%) (or such other percentage as is expressly requiredby this Agreement) of the aggregate number of outstanding Partnership Units heldby the Partners (including the General Partner). Such consent shall be filedwith the General Partner. An action so taken shall be deemed to have been takenat a meeting held on the effective date of the consent as certified by theGeneral Partner. (d) Proxy. Each Partner may authorize any Person or Persons to act for himby proxy on all matters in which a Partner is entitled to participate, includingwaiving notice of any meeting, or voting or participating at a meeting. Everyproxy must be signed by the Partner or his attorney-in-fact and a copy thereofdelivered to the Partnership. No proxy shall be valid after the expiration ofeleven (11) months from the date thereof unless otherwise provided in the proxy.Every proxy shall be revocable at the pleasure of the Partner executing it, suchrevocation to be effective upon the General Partner’s receipt of written noticeof such revocation from the Partner executing such proxy. (e) Conduct of Meeting. Each meeting of the Partners shall be conducted bythe General Partner or such other Person as the General Partner may appointpursuant to such rules for the conduct of the meeting as the General Partner orsuch other Person deems appropriate. Meetings of Partners may be conducted inthe same manner as meetings of the stockholders of the General Partner and maybe held at the same time, and as part of, meetings of the stockholders of theGeneral Partner. ARTICLE 15 GENERAL PROVISIONS15.1 ADDRESSES AND NOTICE Any notice, demand, request or report required or permitted to be given ormade to a Partner or Assignee under this Agreement shall be in writing and shallbe deemed given or made when delivered if delivered in person, sent by firstclass United States mail, by overnight delivery or via facsimile to the Partneror Assignee at the address set forth in Exhibit A or such other address of whichthe Partner shall notify the General Partner in writing. Notwithstanding the -53-foregoing, the General Partner may elect to deliver any such notice, demand,request or report by e-mail or by any other electronic means, in which case suchcommunication shall be deemed given or made one day after being sent.15.2 TITLES AND CAPTIONS All article or section titles or captions in this Agreement are forconvenience of reference only, shall not be deemed part of this Agreement andshall in no way define, limit, extend or describe the scope or intent of anyprovisions hereof. Except as specifically provided otherwise, references to”Articles” and “Sections” are to Articles and Sections of this Agreement.15.3 PRONOUNS AND PLURALS Whenever the context may require, any pronoun used in this Agreement shallinclude the corresponding masculine, feminine or neuter forms, and the singularform of nouns, pronouns and verbs shall include the plural and vice versa.15.4 FURTHER ACTION The parties shall execute and deliver all documents, provide allinformation and take or refrain from taking action as may be necessary orappropriate to achieve the purposes of this Agreement.15.5 BINDING EFFECT This Agreement shall be binding upon and inure to the benefit of theparties hereto and their heirs, executors, administrators, successors, legalrepresentatives and permitted assigns.15.6 CREDITORS Other than as expressly set forth herein with respect to the Indemnitees,none of the provisions of this Agreement shall be for the benefit of, or shallbe enforceable by, any creditor of the Partnership.15.7 WAIVER No failure by any party to insist upon the strict performance of anycovenant, duty, agreement or condition of this Agreement or to exercise anyright or remedy consequent upon a breach thereof shall constitute waiver of anysuch breach or any other covenant, duty, agreement or condition.15.8 COUNTERPARTS This Agreement may be executed in counterparts, all of which together shallconstitute one agreement binding on all of the parties hereto, notwithstandingthat all such parties are not signatories to the original or the samecounterpart. Each party shall become bound by this Agreement immediately uponaffixing its signature hereto. -54-15.9 APPLICABLE LAW This Agreement shall be construed and enforced in accordance with andgoverned by the laws of the State of Delaware, without regard to the principlesof conflicts of laws thereof.15.10 INVALIDITY OF PROVISIONS If any provision of this Agreement is or becomes invalid, illegal orunenforceable in any respect, the validity, legality and enforceability of theremaining provisions contained herein shall not be affected thereby.15.11 MERGER Subject to Section 11.2, the Partnership may merge with, or consolidateinto, any Person or Entity in accordance with Section 17-211 of the Act.15.12 NO RIGHTS AS STOCKHOLDERS Nothing contained in this Agreement shall be construed as conferring uponthe holders of the Partnership Units any rights whatsoever as stockholders ofthe General Partner, including, without limitation, any right to receivedividends or other distributions made to such stockholders or to vote or toconsent or receive notice as stockholders in respect to any meeting orstockholders for the election of directors of the General Partner or any othermatter.15.13 ENTIRE AGREEMENT This Agreement contains the entire understanding and agreement among thePartners with respect to the subject matter hereof and supersedes any otherprior written or oral understandings or agreements among them with respectthereto. [SIGNATURE PAGE FOLLOWS] -55- IN WITNESS WHEREOF, the parties hereto have executed and delivered thisAmended and Restated Agreement of Limited Partnership as of the day and yearfirst-above written. GENERAL PARTNER: NNN Healthcare/Office REIT, Inc. By: ———————————— Name: ———————————- Title: ——————————— LIMITED PARTNER: Triple Net Properties, LLC By: ———————————— Name: ———————————- Title: ——————————— -56- EXHIBIT A PARTNERS’ CONTRIBUTIONS AND PARTNERSHIP INTERESTS

NUMBER OF CAPITAL PARTNERSHIP PERCENTAGE NAME AND ADDRESS OF PARTNER TYPE OF INTEREST CONTRIBUTION UNITS INTEREST ————————— —————————- ———— ———– ———- NNN Healthcare/Office REIT, Inc. General Partnership Interest $ 2,000 200 1.00%1551 North Tustin AvenueSuite 200Santa Ana, CA 92705Fax: (714) 667-6860Attention: Chief Executive OfficerTriple Net Properties, LLC Limited Partnership Interest $200,000 20,000 99.00%1551 North Tustin AvenueSuite 200Santa Ana, CA 92705Fax: (714) 667-6860Attention: _____________ TOTAL $202,000 20,200 100.00%

-57- EXHIBIT B NOTICE OF REDEMPTION REQUEST The undersigned Limited Partner hereby irrevocably (i) requests that NNNHealthcare/Office REIT Holdings, L.P. (the “Partnership”) redeem PartnershipUnits in the Partnership held by such Limited Partner in accordance with theterms of the Agreement of Limited Partnership of the Partnership, as suchagreement may be amended from time to time (the “Partnership Agreement”) and theRedemption Right referred to therein; (ii) agrees to surrender such PartnershipUnits and all right, title, and interest therein promptly upon payment of theRedemption Amount; (iii) directs that the Redemption Amount deliverable uponexercise of the Redemption Right be delivered to such Limited Partner at theaddress as specified in the Partnership Agreement; and (iv) directs that, if theGeneral Partner determines that the Redemption Amount shall be the REIT StockAmount, the REIT Stock be registered or placed in the name of such LimitedPartner and at such address specified in the Partnership Agreement. Theundersigned hereby represents, warrants, and certifies that the undersigned (a)has not transferred or encumbered title to such Partnership Units; (b) has thefull right, power and authority to redeem and surrender such Partnership Unitsas provided herein; and (c) has obtained the consent or approval of all Persons,if any, having the right to consent or approve such redemption and surrender.Dated: ————————- [NAME OF LIMITED PARTNER] By: ———————————— Name: ———————————- Title: ——————————— -58-