AMENDED AND RESTATED AGREEMENT OF LIMITED PARTNERSHIP

Limited Partnership Agreement

You are currently viewing:

This Limited Partnership Agreement involves

UNITED DOMINION REALTY, L.P. | United Dominion Realty Trust, L.P

. RealDealDocs™ contains millions of easily searchable legal documents and clauses from top law firms. Search for free - click here.

Title: AMENDED AND RESTATED AGREEMENT OF LIMITED PARTNERSHIP
Governing Law: Delaware Date: 3/11/2004
Industry: Real Estate Operations Sector: Services

AMENDED AND RESTATED AGREEMENT

OF LIMITED PARTNERSHIP

, Parties: united dominion realty l.p. , united dominion realty trust l.p

<PAGE>

EXHIBIT 10.23

AMENDED AND RESTATED AGREEMENT

OF LIMITED PARTNERSHIP

UNITED DOMINION REALTY, L.P.

DATED AS OF FEBRUARY 23, 2004

<PAGE>

TABLE OF CONTENTS

<TABLE>

PAGE

<S> <C>

ARTICLE I DEFINED TERMS.......................................................................... 2

1.01 Defined Terms.............................................................................. 2

ARTICLE II PARTNERSHIP CONTINUATION AND IDENTIFICATION............................................ 8

2.01 Defined Terms.............................................................................. 8

2.02 Name, Office and Registered Agent.......................................................... 8

2.03 Partners................................................................................... 9

2.04 Term and Dissolution....................................................................... 9

2.05 Filing of Certificate and Perfection of Limited Partnership................................ 10

2.06 Certificates Describing Partnership Units.................................................. 10

ARTICLE III BUSINESS OF THE PARTNERSHIP............................................................ 10

3.01 Business of the Partnership................................................................ 10

ARTICLE IV CAPITAL CONTRIBUTIONS AND ACCOUNTS..................................................... 11

4.01 Capital Contributions...................................................................... 11

4.02 Additional Capital Contributions and Issuances of Additional Partnership Interests......... 11

4.03 Loans to the Partnership................................................................... 12

4.04 Capital Accounts........................................................................... 12

4.05 Percentage Interests....................................................................... 13

4.06 No Interest on Contributions............................................................... 13

4.07 Return of Capital Contributions............................................................ 13

4.08 No Third Party Beneficiary................................................................. 13

ARTICLE V PROFITS AND LOSSES: DISTRIBUTIONS...................................................... 14

5.01 Allocation of Profit and Loss.............................................................. 14

5.02 Distribution of Cash....................................................................... 16

5.03 REIT Distribution Requirements............................................................. 18

5.04 No Right to Distributions in Kind.......................................................... 18

5.05 Limitations on Return of Capital Contributions............................................. 18

5.06 Distributions Upon Liquidation............................................................. 18

5.07 Substantial Economic Effect................................................................ 19

ARTICLE VI RIGHTS, OBLIGATIONS AND POWERS OF THE GENERAL PARTNER.................................. 19

</TABLE>

-i-

<PAGE>

TABLE OF CONTENTS

(continued)

<TABLE>

PAGE

<S> <C>

6.01 Management of the Partnership.............................................................. 19

6.02 Delegation of Authority.................................................................... 22

6.03 Indemnification and Exculpation of Indemnitees............................................. 22

6.04 Liability of the General Partner........................................................... 23

6.05 Partnership Expenses....................................................................... 24

6.06 Outside Activities......................................................................... 24

6.07 Employment or Retention of Affiliates...................................................... 24

6.08 Title to Partnership Assets................................................................ 25

ARTICLE VII CHANGES IN GENERAL PARTNER AND THE COMPANY............................................. 25

7.01 Transfer of a General Partner's Partnership Interest; Transactions Involving the Company... 25

7.02 Admission of a Substitute or Additional General Partner.................................... 27

7.03 Effect of Bankruptcy, Withdrawal, Death or Dissolution of a General Partner................ 27

7.04 Removal of a General Partner............................................................... 28

ARTICLE VIII RIGHTS AND OBLIGATIONS OF THE LIMITED PARTNERS......................................... 29

8.01 Management of the Partnership.............................................................. 29

8.02 Power of Attorney.......................................................................... 29

8.03 Limitation on Liability of Limited Partners................................................ 29

8.04 Ownership by Limited Partner of Corporate General Partner or Affiliate..................... 29

8.05 Redemption Right........................................................................... 30

8.06 NYSE Listing and Securities Act Registration of REIT Shares................................ 34

ARTICLE IX TRANSFERS OF LIMITED PARTNERSHIP INTERESTS............................................. 34

9.01 Purchase for Investment.................................................................... 34

9.02 Restrictions on Transfer of Limited Partnership Interests.................................. 34

9.03 Admission of Substitute Limited Partner.................................................... 36

9.04 Rights of Assignees of Partnership Interests............................................... 37

9.05 Effect of Bankruptcy, Death, Incompetence or Termination of a Limited Partner.............. 37

9.06 Joint Ownership of Interests............................................................... 37

ARTICLE X BOOKS AND RECORDS; ACCOUNTING; TAX MATTERS............................................. 38

</TABLE>

-ii-

<PAGE>

TABLE OF CONTENTS

(continued)

<TABLE>

PAGE

<S> <C>

10.01 Books and Records.......................................................................... 38

10.02 Custody of Partnership Funds; Bank Accounts................................................ 38

10.03 Fiscal and Taxable Year.................................................................... 38

10.04 Annual Tax Information and Report.......................................................... 38

10.05 Tax Matters Partner; Tax Elections; Special Basis Adjustments.............................. 39

10.06 Reports to Limited Partners................................................................ 39

10.07 Offset..................................................................................... 40

ARTICLE XI AMENDMENT OF AGREEMENT; MERGER; NOTICE................................................. 40

11.01 Amendment of Agreement; Merger............................................................. 40

11.02 Notice to Limited Partners................................................................. 40

11.03 Class A Voting Rights...................................................................... 40

ARTICLE XII GENERAL PROVISIONS..................................................................... 41

12.01 Notices.................................................................................... 41

12.02 Survival of Rights......................................................................... 41

12.03 Additional Documents....................................................................... 41

12.04 Severability............................................................................... 42

12.05 Entire Agreement........................................................................... 42

12.06 Additional Agreements...................................................................... 42

12.07 Rules of Construction...................................................................... 42

12.08 Headings................................................................................... 42

12.09 Counterparts............................................................................... 42

12.10 Governing Law.............................................................................. 42

</TABLE>

Exhibits

Exhibit A List of Partners

Exhibit B Notice of Exercise of Redemption Right

Exhibit C Partnership Unit Designation of the Class I Out-Performance

Partnership Shares

Exhibit D Partnership Unit Designation of the Class II Out-Performance

Partnership Shares

-iii-

<PAGE>

AMENDED AND RESTATED AGREEMENT OF LIMITED PARTNERSHIP

UNITED DOMINION REALTY, L.P.

DATED AS OF FEBRUARY 23, 2004

RECITALS

United Dominion Realty, L.P. (the "Partnership") was formed as a

limited partnership under the laws of the State of Delaware by a Certificate of

Limited Partnership filed with the Secretary of State of the State of Delaware

on February 19, 2004 and is the successor-in-interest to United Dominion Realty

Trust, L.P., a limited partnership formed under the laws of Virginia, which

commenced operations on November 4, 1995. This Amended and Restated Agreement of

Limited Partnership is adopted this 23d day of February, 2004 pursuant to the

provisions of Section 17-211(g) of the Act (as defined below).

AGREEMENT

NOW, THEREFORE, in consideration of the foregoing, of mutual covenants

between the parties hereto, and of other good and valuable consideration, the

receipt and sufficiency of which are hereby acknowledged, the parties hereto

agree as follows:

<PAGE>

ARTICLE I

DEFINED TERMS

1.01 DEFINED TERMS.

The following defined terms used in this Agreement shall have the

meanings specified below:

"ACT" means the Delaware Revised Uniform Limited Partnership Act, as it

may be amended from time to time.

"ADDITIONAL FUNDS" is defined in Section 4.03.

"ADDITIONAL LIMITED PARTNER" means a Person admitted to this

Partnership as a Limited Partner pursuant to Section 4.02.

"AFFILIATE" means, (i) any Person that, directly or indirectly,

controls or is controlled by or is under common control with such Person, (ii)

any other Person that owns, beneficially, directly or indirectly, 10% or more of

the outstanding capital stock, shares or equity interests of such Person, or

(iii) any officer, director, employee, partner or trustee of such Person or any

Person controlling, controlled by or under common control with such Person

(excluding trustees and persons serving in similar capacities who are not

otherwise an Affiliate of such Person). For the purposes of this definition,

"control" (including the correlative meanings of the terms "controlled by" and

"under common control with"), as used with respect to any Person, shall mean the

possession, directly or indirectly, of the power to direct or cause the

direction of the management and policies of such Person, through the ownership

of voting securities or partnership interests or otherwise.

"AGREED VALUE" means the fair market value of a Partner's non-cash

Capital Contribution as of the date of contribution as agreed to by the such

Partner and the General Partner. The name and address of each Partner, number of

Partnership Units issued to such Partner, and the Agreed Value of such Partner's

non-cash Capital Contributions as of the date of contribution thereof is set

forth on Exhibit A as amended from time to time.

"AGREEMENT" means this Amended and Restated Agreement of Limited

Partnership, as amended from time to time.

"AVAILABLE CASH" means, for any period, the excess, if any, of (i) the

cash receipts of the Partnership (other than from the sale, exchange or other

disposition of the assets of the Partnership), including amounts withdrawn from

reserves, over (ii) the disbursements of cash by the Partnership (other than

distributions to Partners and amounts paid with the receipts from the sale,

exchange or other disposition of the assets of the Partnership), including

amounts deposited in reserves. Available Cash for any period shall be determined

by the General Partner in its reasonable discretion.

"CAPITAL ACCOUNT" is defined in Section 4.04.

<PAGE>

"CAPITAL CONTRIBUTION" means the total amount of capital contributed to

the Partnership by each Partner. Any reference to the Capital Contribution of a

Partner shall include the Capital Contribution made by a predecessor holder of

the Partnership Interest of such Partner. The paid-in Capital Contribution shall

mean the cash amount or the Agreed Value of other assets actually contributed by

each Partner to the capital of the Partnership.

"CASH AMOUNT" means an amount of cash per Partnership Unit equal to the

Value of the REIT Shares Amount on the date of receipt by the General Partner of

a Notice of Redemption.

"CERTIFICATE" means any instrument or document that is required under

the laws of the State of Delaware, or any other jurisdiction in which the

Partnership conducts business, to be signed and sworn to by the Partners of the

Partnership (either by themselves or pursuant to the power-or-attorney granted

to the General Partner in Section 8.02) and filed for recording in the

appropriate public offices within the State of Delaware or such other

jurisdiction to perfect or maintain the Partnership as a limited partnership, to

effect the admission, withdrawal, or substitution of any Partner of the

Partnership, or to protect the limited liability of the Limited Partners as

limited partners under the laws of the State of Delaware or such other

jurisdiction.

"CHARTER" means the Articles of Incorporation of the Company, as

amended from time to time.

"CLASS A PARTNER" means a Limited Partner who holds Class A Partnership

Units.

"CLASS A PARTNERSHIP UNITS" means Partnership Interests having the

rights and preferences of a Class A Partnership Unit as set forth in this

Agreement.

"CLASS A SPECIFIED REDEMPTION DATE" means the date that Class A

Partnership Units are required to be redeemed or acquired pursuant to Section

8.05(d).

"CODE" means the Internal Revenue Code of 1986, as amended, and as

hereafter amended from time to time. Reference to any particular provision of

the Code shall mean that provision in the Code at the date hereof and any

successor provision of the Code.

"COMMISSION" means the Securities and Exchange Commission.

"COMPANY" means United Dominion Realty Trust, Inc., a Maryland

corporation.

"CONTRIBUTION AGREEMENTS" means collectively that certain Contribution

Agreement dated as of May 2, 2003 between the General Partner, the Partnership,

Mesa Verde Villas II, L.P. and M.V. JV, LLC and that certain Contribution

Agreement dated as of May 2, 2003 between the General Partner, the Partnership

and Windjammer Apartments, L.P.

"CONVERSION FACTOR" means 1.0, as adjusted pursuant to Section 8.05(f).

"CROSS OVER DATE" means the date on which a Class A Partner would have

received distributions with respect to the Class A Partnership Units held by

such Class A Partner equal to or greater than the Threshold Amount for a period

of four consecutive calendar quarters,

<PAGE>

assuming such Class A Partner had received distributions based on the Dividend

Equivalent instead of distributions on the Class A Partnership Units pursuant to

this Agreement.

"DIVIDEND EQUIVALENT" as to any Partner means the amount of

distributions such Partner would have received for the quarter (or other

distribution period) from REIT Shares if such Partner owned the number of REIT

Shares equal to the product to such Partner's Partnership Units and the

Conversion Factor for the Partnership Record Date pertaining to such quarter (or

other distribution period).

"EVENT OF BANKRUPTCY" as to any Person means the filing of a petition

for relief as to such Person as debtor or bankrupt under the Bankruptcy Code of

1978 or similar provision of law of any jurisdiction (except if such petition is

contested by such Person and has been dismissed within 90 days); insolvency or

bankruptcy of such Person as finally determined by a court proceeding; filing by

such Person of a petition or application to accomplish the same or for the

appointment of a receiver or a trustee for such Person or a substantial part of

his assets; commencement of any proceedings relating to such Person as a debtor

under any other reorganization, arrangement, insolvency, adjustment of debt or

liquidation law of any jurisdiction, whether now in existence or hereinafter in

effect, either by such Person or by another, provided that if such proceeding is

commenced by another, such Person indicates his approval of such proceeding,

consents thereto or acquiesces therein, or such proceeding is contested by such

Person and has not been finally dismissed within 90 days.

"FAMILY MEMBER" means, as to a Person that is an individual, such

Person's spouse, ancestors, descendants (whether by blood or by adoption),

brothers, sisters and inter vivos or testamentary trusts of which only such

Person and his spouse, ancestors, descendants (whether by blood or by adoption),

brothers and sisters are beneficiaries.

"GENERAL PARTNER" means the Company and any Person who becomes a

substitute or additional General Partner as provided herein, and any of their

successors as General Partner. At any time at which the Partnership has two or

more General Partners, all such General Partners shall designate one of such

General Partners as managing General Partner and may from time to time designate

a successor managing General Partner and, unless the context otherwise requires,

references to the General Partner shall mean the General Partner at the time so

designated as managing General Partner.

"GENERAL PARTNERSHIP INTEREST" means a Partnership Interest held by the

General Partner that is a general partnership interest.

"INDEMNITEE" means (i) any Person made a party to a proceeding by

reason of such Person's status as the General Partner or a director, officer or

employee of the Partnership or the General Partner, and (ii) such other Persons

(including Affiliates of the General Partner or the Partnership) as the General

Partner may designate from time to time, in its sole and absolute discretion,

"LIMITED PARTNER" means any Person named as a Limited Partner on

Exhibit A attached hereto, and any Person who becomes a Substitute or Additional

Limited Partner, in such Person's capacity as a Limited Partner in the

Partnership.

<PAGE>

"LIMITED PARTNERSHIP INTEREST" means the ownership interest of a

Limited Partner in the Partnership at any particular time, including the right

of such Limited Partner to any and all benefits to which such Limited Partner

may be entitled as provided in this Agreement and in the Act, together with the

obligations of such Limited Partner to comply with all the provisions of this

Agreement and of such Act.

"LOSS" is defined in Section 5.01(f).

"MINIMUM LIMITED PARTNERSHIP INTEREST" means the lesser of (i) 1% or

(ii) if the total Capital Contributions to the Partnership exceeds $50 million,

1% divided by the ratio of the total Capital Contributions to the Partnership to

$50 million; provided, however, that the Minimum Limited Partnership Interest

shall not be less than 0.2% at any time.

"NOTICE OF REDEMPTION" means the Notice of Exercise of Redemption Right

substantially in the form attached as Exhibit B hereto.

"NYSE" means the New York Stock Exchange and includes any other

national securities exchange on which the REIT Shares are listed at the

determination date.

"OFFER" is deemed in Section 7.01(c).

"ORIGINAL LIMITED PARTNER" means UDRT of North Carolina, LLC., a North

Carolina limited liability company.

"OUTSIDE PARTNER" means any Partner other than a UDR Partner.

"PARTNER" means any General Partner or Limited Partner.

"PARTNER NONRECOURSE DEBT MINIMUM GAIN" has the meaning set forth in

Regulations Section 1.704-2(i). A Partner's share of Partner Nonrecourse Debt

Minimum Gain shall be determined in accordance with Regulations Section

1.704-2(i)(5).

"PARTNERSHIP INTEREST" means an ownership interest in the Partnership

held by either a Limited Partner or the General Partner and includes any and all

benefits to which the holder of such a Partnership Interest may be entitled as

provided in this Agreement, together with all obligations of such Person to

comply with the terms and provisions of this Agreement.

"PARTNERSHIP MINIMUM GAIN" has the meaning set forth in Regulations

Section 1.704-2(d). In accordance with Regulations Section 1.704-2(d), the

amount of Partnership Minimum Gain is determined by first computing, for each

Partnership nonrecourse liability, any gain the Partnership would realize if it

disposed of the property subject to that liability for no consideration other

than full satisfaction of the liability, and then aggregating the separately

computed gains. A Partner's share of Partnership Minimum Gain shall be

determined in accordance with Regulations Section 1.704-2(g)(l).

"PARTNERSHIP RECORD DATE" means the record date established by the

General Partner for the distribution of cash pursuant to Section 5.02, which

record date shall be the same as the

<PAGE>

record date established by the General Partner for a distribution to the holders

of the REIT Shares.

"PARTNERSHIP UNIT" means a fractional, undivided share of the

Partnership Interests of all Partners issued hereunder. The allocation of

Partnership Units among the Partners shall be as set forth on Exhibit A, as may

be amended from time to time.

"PERCENTAGE INTEREST" means at any time the percentage ownership

interest in the Partnership of each Partner, as determined by dividing the

Partnership Units owned by such Partner by the total number of Partnership Units

outstanding at such time. The Percentage Interest of each Partner shall be as

set forth on Exhibit A, as may be amended from time to time.

"PERCENTAGE INTEREST ADJUSTMENT DATE" means the effective date of an

adjustment of the Partners' Percentage Interests pursuant to Section 4.05.

"PERSON" means any individual, partnership, corporation, joint venture,

trust or other entity.

"PREFERRED RETURN" means, as to each Class A Partner, a cumulative

annual, non-compounded return on each Class A Partnership Unit equal to eight

percent (8%) based upon a value of $16.61 per Class A Partnership Unit.

"PROFIT" is defined in Section 5.01(f).

"PROPERTY" means any apartment property or other investment in which

the Partnership holds an ownership interest.

"REDEEMING PARTNER" is deemed in Section 8.05(a).

"REDEMPTION RIGHT" is defined in Section 8.05(a).

"REGULATIONS" means the Federal Income Tax Regulations issued under the

Code, as amended and as hereafter amended from time to time. Reference to any

particular provision of the Regulations shall mean that provision of the

Regulations on the date hereof and any successor provision of the Regulations.

"REIT" means a real estate investment trust under Sections 856 through

860 of the Code.

"REIT EXPENSES" means (i) costs and expenses relating to the continuity

of existence of the Company and its Subsidiaries (all such entities shall, for

purposes of this section, be included within the definition of Company),

including, without limitation, taxes, fees and assessments associated therewith

and any costs, expenses or fees payable to any director, officer or employee of

the Company (including, without limitation, any costs of indemnification), (ii)

costs and expenses relating to any offer or registration of REIT Shares or other

securities by the Company and all statements, reports, fees and expenses

incidental thereto, including, without limitation, underwriting discounts and

selling commissions applicable to any such offer of securities and any costs and

expenses associated with any claims made by any holders of such securities or

any underwriters or placement agents thereof, (iii) costs and expenses incurred

in connection with the

<PAGE>

repurchase of any securities by the Company, (iv) costs and expenses associated

with the preparation and filing of any periodic or other reports and

communications by the Company under federal, state or local laws or regulations,

including filings with the Commission, (v) costs and expenses associated with

compliance by the Company with laws, rules and regulations promulgated by any

regulatory body, including the Commission and any securities exchange, (vi)

costs and expenses associated with any 401(k) plan, incentive plan, bonus plan

or other plan providing for compensation for the employees of the Company, (vii)

costs and expenses incurred by the Company relating to any issuance or

redemption of Partnership Interests, and (viii) all other operating or

administrative costs incurred by the Company in connection with the ordinary

course of the Company's or the Partnership's business (including the business of

any Subsidiary thereof).

"REIT SHARE" means a share of common stock of the Company, $1 par value

per share, or a share of the common stock of any Successor Entity.

"REIT SHARES AMOUNT" shall mean a whole number of REIT Shares equal to

the product of the number of Partnership Units offered for redemption by a

Redeeming Partner, multiplied by the Conversion Factor as adjusted to and

including the Specified Redemption Date plus cash in lieu of any fractional REIT

Shares based on the Value of a REIT Share as of the date of receipt by the

General Partner of a Notice of Redemption; provided that in the event the

Company issues to all holders of REIT Shares rights, options, warrants or

convertible or exchangeable securities entitling the stockholders to subscribe

for or purchase REIT Shares, or any other securities or property (collectively,

the "rights"), and the rights have not expired at the Specified Redemption Date,

then the REIT Shares Amount shall also include the rights issuable to a holder

of the REIT Shares Amount of REIT Shares on the record date fixed for purposes

of determining the holders of REIT Shares entitled to rights.

"SECURITIES ACT" means the Securities Act of 1933, as amended.

"SERVICE" means the Internal Revenue Service.

"SPECIFIED REDEMPTION DATE" means (i) with respect to Partnership Units

to be redeemed for a Cash Amount, the first Business Day of the month that is at

least 20 business days after the receipt by the General Partner of the Notice of

Redemption, as the same may be extended pursuant to Section 8.05(d) and (ii)

with respect to Partnership Units to be redeemed for a REIT Shares Amount, the

fifth Business Day following the date of the General Partner's notice of its

election to purchase such Partnership Units pursuant to Section 8.05(b).

"SUBSIDIARY" means, with respect to any Person, any corporation or

other entity of which a majority of (i) the voting power of the voting equity

securities (including general partners' interests) or (ii) the outstanding

equity interests is owned, directly or indirectly, by such Person.

"SUBSTITUTE LIMITED PARTNER" means any Person admitted to the

Partnership as a Limited Partner pursuant to Section 9.03.

"THRESHOLD AMOUNT" means a fixed distribution of $1.3288 per annum.

"TRANSACTION" is defined in Section 7.01(c).

<PAGE>

"TRANSFER" is defined in Section 9.02(a).

"UDR PARTNER" means the Company and any Partner that is an Affiliate of

the Company.

"VALUE" means, with respect to any security, the average of the daily

market price of such security for the twenty (20) consecutive trading days

immediately preceding the date of such valuation. The market price for each such

trading day shall be: (i) if such security is listed or admitted to trading on

any securities exchange or The Nasdaq National Market, the closing price,

regular way, on such day or, if no sale takes place on such day, the average of

the closing bid and asked prices on such day, (ii) if such security is not

listed or admitted to trading on any securities exchange or The Nasdaq National

Market, the last reported sale price on such day or, if no sale takes place on

such day, the average of the closing bid and asked prices on such day, as

reported by a recognized quotation source designated by the Company, or (iii) if

such security is not listed or admitted to trading on any securities exchange or

The Nasdaq National Market and no such last reported sale price or closing bid

and asked prices are available, the average of the reported high bid and low

asked prices on such day, as reported by a recognized quotation source

designated by the General Partner, or if there shall be no bid and asked prices

on such day, the average of the high bid and low asked prices, as so reported,

on the most recent day (not more than twenty (20) days prior to the date in

question) for which prices have been so reported; provided, that if there are no

bid and asked prices reported during the twenty (20) days prior to the date in

question, the value of such security shall be determined by the General Partner

acting in good faith on the basis of such quotations and other information as it

considers, in its reasonable judgment, appropriate. In the event that any

security includes any additional rights the value of which is not included

within such price, then the value of such rights shall be determined by the

General Partner acting in good faith on the basis of such quotations and other

information as it considers, in its reasonable judgment, appropriate, and

included in determining the "Value" of such security.

ARTICLE II

PARTNERSHIP CONTINUATION AND IDENTIFICATION

2.01 DEFINED TERMS. The Partners hereby agree to continue the

Partnership pursuant to the Act and upon the terms and conditions set forth in

this Agreement.

2.02 NAME, OFFICE AND REGISTERED AGENT. The name of the Partnership

shall be United Dominion Realty, L.P. The specified office and place of business

of the Partnership shall be 400 East Cary Street, Richmond, Virginia 23219. The

General Partner may at any time change the location of such office, provided the

General Partner gives notice to the Partners of any such change. The name and

address of the Partnership's registered agent is The Corporation Trust Company,

1209 Orange Street, Wilmington, Delaware 19801, County of New Castle. The sole

duty of the registered agent as such is to forward to the Partnership any notice

that is served on it as registered agent.

<PAGE>

2.03 PARTNERS.

(a) The General Partner of the Partnership is the

Company. Its principal place of business shall be the same as that of the

Partnership.

(b) The Limited Partners shall be those Persons

identified as Limited Partners on Exhibit A hereto, as amended from time to

time.

2.04 TERM AND DISSOLUTION.

(a) The term of the Partnership shall continue in full

force and effect until the Partnership is dissolved as provided by law or upon

the first to occur of any of the following events:

(i) The occurrence of an Event of Bankruptcy as

to a General Partner or the dissolution, death or withdrawal

of a General Partner unless the Partnership is continued

pursuant to Section 2.04(c); provided, that if a General

Partner is on the date of such occurrence a partnership, the

dissolution of such General Partner as a result of the

dissolution, death, withdrawal, removal or Event of Bankruptcy

of a partner in such partnership shall not be an event of

dissolution of the Partnership if the business of such General

Partner is continued by the remaining partner or partners,

either alone or with additional partners, and such General

Partner and such partners comply with any other applicable

requirements of this Agreement;

(ii) The passage of 90 days after the sale or

other disposition of all or substantially all of the assets of

the Partnership (provided that if the Partnership receives one

or more obligations as consideration for such sale or other

disposition, the Partnership shall continue, unless sooner

dissolved under the provisions of this Agreement, until such

time as all of such obligations are paid or satisfied in

full);

(iii) The redemption of all Limited Partnership

Interests (other than any of such interests held by the

Company or any Subsidiary thereof); or

(iv) The election by the General Partner that the

Partnership should be dissolved.

(b) Upon dissolution of the Partnership (unless the

Partnership is continued pursuant to Section 2.04(c)) the General Partner (or

its trustee, receiver, successor or legal representative) shall amend or cancel

the Certificate and liquidate the Partnership's assets and apply and distribute

the proceeds thereof in accordance with Section 5.06. Notwithstanding the

foregoing, the liquidating General Partner may either (i) defer liquidation of,

or withhold from distribution for a reasonable time, any assets of the

Partnership (including those necessary to satisfy the Partnership's debts and

obligations), or (ii) distribute the assets to the Partners in kind.

occurrence of an Event of Bankruptcy as to a General Partner or the dissolution,

death or withdrawal of a General Partner,

<PAGE>

the Limited Partners, within 90 days after such occurrence, may elect to

continue the Partnership for the balance of the term specified in Section

2.04(a) by selecting, subject to Section 7.02 and any other provisions of this

Agreement, a substitute General Partner by consent of a majority in interest of

the Limited Partners. If the Limited Partners elect to continue the Partnership

and admit a substitute General Partner, the relationship with the Partners and

of any Person who has acquired an interest of a Partner in the Partnership shall

be governed by this Agreement.

2.05 FILING OF CERTIFICATE AND PERFECTION OF LIMITED PARTNERSHIP.

The General Partner shall execute, acknowledge, record and file at the expense

of the Partnership, the Certificate and any and all amendments thereto and all

requisite fictitious name statements and notices in such places and

jurisdictions as may be necessary to cause the Partnership to be treated as a

limited partnership under, and otherwise to comply with, the laws of each state

or other jurisdiction in which the Partnership conducts business.

2.06 CERTIFICATES DESCRIBING PARTNERSHIP UNITS. At the request of a

Limited Partner, the General Partner, at its option, may issue a certificate

summarizing the terms of such Limited Partner's interest in the Partnership,

including the number of Partnership Units owned and the Percentage Interest

represented by such Partnership Units as of the date of such certificate. Any

such certificate (i) shall be in form and substance as approved by the General

Partner, (ii) shall not be negotiable and (iii) shall bear the following legend:

This certificate is not negotiable. The Partnership Units represented

by this certificate are governed by and transferable only in accordance with the

provisions of the Agreement of Limited Partnership of United Dominion Realty,

L.P., as amended from time to time.

ARTICLE III

BUSINESS OF THE PARTNERSHIP

3.01 BUSINESS OF THE PARTNERSHIP. The purpose and nature of the

business to be conducted by the Partnership is (i) to conduct any business that

may be lawfully conducted by a limited partnership organized pursuant to the

Act, provided, however, that such business shall be limited to and conducted in

such a manner as to permit the Company at all times to qualify as a REIT, unless

the Company otherwise ceases to qualify as a REIT, (ii) to enter into any

partnership, joint venture or other similar arrangement to engage in any of the

foregoing or the ownership of interests in any entity engaged in any of the

foregoing and (iii) to do anything necessary or incidental to the foregoing. In

connection with the foregoing, and without limiting the Company's right in its

sole and absolute discretion to cease qualifying as a REIT, the Partners

acknowledge that the Company's current status as a REIT and the avoidance of

income and excise taxes on the Company inures to the benefit of all the Partners

and not solely to the Company. Notwithstanding the foregoing, the Limited

Partners acknowledge that the Company may terminate its status as a REIT under

the Code at any time to the full extent permitted by the Charter. Subject to

Article XI hereof, the General Partner shall also be empowered (but shall not be

required) to do any and all acts and things necessary or prudent to ensure that

the Partnership will not be classified as a "publicly traded partnership" for

purposes of Section 7704 of the Code.

<PAGE>

ARTICLE IV

CAPITAL CONTRIBUTIONS AND ACCOUNTS

4.01 CAPITAL CONTRIBUTIONS. The General Partner and the Limited

Partners have contributed to the capital of the Partnership cash or property in

an amount or having an Agreed Value set forth opposite their names on Exhibit A,

as amended from time to time.

4.02 ADDITIONAL CAPITAL CONTRIBUTIONS AND ISSUANCES OF ADDITIONAL

PARTNERSHIP INTERESTS. Except as provided in this Section 4.02 or in Section

4.03, the Partners shall have no right or obligation to make any additional

Capital Contributions or loans to the Partnership. The Partners, with the

consent of the General Partner, which consent may be withheld in its sole and

absolute discretion, may contribute additional capital to the Partnership, from

time to time, and receive additional Partnership Interests in respect thereof,

in the manner contemplated in this Section 4.02.

(a) Issuances of Additional Partnership Interests. The

General Partner is hereby authorized to cause the Partnership to issue such

additional Partnership Interests in the form of Partnership Units for any

Partnership purpose at any time or from time to time, to the Partners (including

the General Partner) or to other Persons for such consideration and on such

terms and conditions as shall be established by the General Partner in its sole

and absolute discretion, all without the approval of any Limited Partners, which

terms and conditions shall be set forth in an amendment (including an additional

exhibit) to this Agreement. Any additional Partnership Interests issued thereby

may be issued in one or more classes, or one or more series of any of such

classes, with such designations, preferences and relative, participating,

optional or other special rights, powers and duties, including rights, powers

and duties senior to Limited Partnership Interests, all as shall be determined

by the General Partner in its sole and absolute discretion and without the

approval of any Limited Partner, subject to Delaware law, including, without

limitation, (i) the allocations of items of Partnership income, gain, loss,

deduction and credit to each such class or series of Partnership Interests; (ii)

the right of each such class or series of Partnership Interests to share in

Partnership distributions; and (iii) the rights of each such class or series of

Partnership Interests upon dissolution and liquidation of the Partnership.

Without limiting the foregoing, the General Partner is expressly authorized to

cause the Partnership to issue Partnership Units for less than fair market

value, so long as the General Partner concludes in good faith that such issuance

is in the best interests of the Company and the Partnership. Upon each issuance

of Partnership Units hereunder, the General Partner shall amend Exhibit A

attached hereto to reflect such issuance.

(b) Certain Deemed Contributions of Proceeds of Issuance

of Company Securities. If (i) the Company issues securities and contributes some

or all the proceeds raised in connection with such issuance to the Partnership

and (ii) the proceeds actually received and contributed by the Company to the

Partnership are less than the Partnership's share (as determined by the General

Partner, in its sole and absolute discretion) of the gross proceeds of such

issuance as a result of any underwriter's discount or other expenses paid or

incurred in connection with such issuance, then the Company shall be deemed to

have made Capital Contributions to the Partnership in the aggregate amount of

the Partnership's share of the gross proceeds of such issuance that are

contributed to the Partnership and the Partnership shall be

<PAGE>

deemed simultaneously to have paid such offering expenses in connection with the

issuance of additional Partnership Units to the Company for such Capital

Contributions pursuant to Section 4.02(a). In any case in which the Company

contributes less than all of the proceeds of such issuance to the Partnership,

it shall be deemed to have contributed the gross proceeds of issuance of the

number of units of the issued security (or the number of dollars of principal in

the case of debt securities) equal to the quotient of the division of the amount

of proceeds contributed by the net proceeds per unit (or per dollar), and the

Partnership shall be deemed to have paid offering expenses equal to the product

of such number of units (or dollars) times the per unit (or per dollar) offering

expenses.

that either a redemption pursuant to Section 8.05 or additional Capital

Contributions by the General Partner and the Original Limited Partner would

result in the Limited Partners (other than the Original Limited Partner), in the

aggregate, owning less than the Minimum Limited Partnership Interest, the

General Partner and the Limited Partners (other than the Original Limited

Partner) shall form another partnership and contribute sufficient Limited

Partnership Interests together with such other Limited Partners so that the

Limited Partners (other than the Original Limited Partner), in the aggregate,

own at least the Minimum Limited Partnership Interest.

4.03 LOANS TO THE PARTNERSHIP. If the General Partner determines

that it is in the best interests of the Company and the Partnership to provide

for additional Partnership funds ("Additional Funds") for any Partnership

purpose, the General Partner may (i) cause the Partnership to obtain such funds

from outside borrowings or (ii) elect to have the Company or a Subsidiary or

Subsidiaries of the Company loan such Additional Funds to the Partnership. The

loans to the Partnership shall be in exchange for such consideration and on such

terms and conditions as shall be established by the General Partner in its sole

and absolute discretion, all without the approval of any Limited Partners.

Without limiting the foregoing, the General Partner is expressly authorized to

cause the Partnership to issue debt securities for less than fair market value,

so long as the General Partner concludes in good faith that such issuance is in

the best interests of the Company and the Partnership.

4.04 CAPITAL ACCOUNTS. A separate capital account (a "Capital

Account") shall be established and maintained for each Partner in accordance

with Regulations Section 1.704-1(b)(2)(iv). If (i) a new or existing Partner

acquires an additional Partnership Interest in exchange for more than a de

minimis Capital Contribution, (ii) the Partnership distributes to a Partner more

than a de minimis amount of Partnership property as consideration for a

Partnership Interest, or (iii) the Partnership is liquidated within the meaning

of Regulation Section 1.704-1(b)(2)(ii)(g), the General Partner shall revalue

the property of the Partnership to its fair market value (as determined by the

General Partner, in its sole and absolute discretion, and taking into account

Section 7701(g) of the Code) in accordance with Regulations Section

1.704-1(b)(2)(iv)(f). When the Partnership's property is revalued by the General

Partner, the Capital Accounts of the Partners shall be adjusted in accordance

with Regulations Sections 1.704-1(b)(2)(iv)(f) and (g), which generally require

such Capital Accounts to be adjusted to reflect the manner in which the

unrealized gain or loss inherent in such property (that has not been reflected

in the Capital Accounts previously) would be allocated among the Partners

pursuant to Section 5.01 if there were a taxable disposition of such property

for its fair market value (as determined

<PAGE>

by the General Partner, in its sole and absolute discretion, and taking into

account Section 7701 (g) of the Code) on the date of the revaluation.

4.05 PERCENTAGE INTERESTS. If the number of outstanding Partnership

Units increases or decreases during a taxable year, each Partner's Percentage

Interest shall be adjusted by the General Partner effective as of the effective

date of each such increase or decrease to a percentage equal to the number of

Partnership Units held by such Partner divided by the aggregate number of

Partnership Units outstanding after giving effect to such increase or decrease.

If the Partners' Percentage Interests are adjusted pursuant to this Section

4.05, the Profits and Losses for the taxable year in which the adjustment occurs

shall be allocated between the several parts of the year (a) beginning on the

first day of the year and ending on the next following Percentage Interest

Adjustment Date, (b) beginning on the day following a Percentage Interest

Adjustment Date and ending on the next following Percentage Interest Adjustment

Date, and/or (c) beginning on the first day following the last Percentage

Interest Adjustment Date occurring during the year and ending on the last day of

the year, as may be appropriate, either (i) as if the taxable year had ended on

the last day of each part or (ii) based on the number of days in each part. The

General Partner, in its sole and absolute discretion, shall determine which

method shall be used to allocate Profits and Losses for the taxable year in

which the adjustment occurs. The allocation among the Partners of Profits and

Losses allocated to any part of the year shall be based on the Percentage

Interests determined as of the first day of such part.

4.06 NO INTEREST ON CONTRIBUTIONS. No Partner shall be entitled to

interest on its Capital Contribution.

4.07 RETURN OF CAPITAL CONTRIBUTIONS. No Partner shall be entitled

to withdraw any part of its Capital Contribution or its Capital Account or to

receive any distribution from the Partnership, except as specifically provided

in this Agreement. Except as otherwise provided herein, there shall be no

obligation to return to any Partner or withdrawn Partner any part of such

Partner's Capital Contribution for so long as the Partnership continues in

existence.

4.08 NO THIRD PARTY BENEFICIARY. No creditor or other third party

having dealings with the Partnership shall have the right to enforce the right

or obligation of any Partner to make Capital Contributions or loans or to pursue

any other right or remedy hereunder or at law or in equity, it being understood

and agreed that the provisions of this Agreement shall be solely for the benefit

of, and may be enforced solely by, the parties hereto and their respective

successors and assigns. None of the rights or obligations of the Partners herein

set forth to make Capital Contributions or loans to the Partnership shall be

deemed an asset of the Partnership for any purpose by any creditor or other

third party; nor may such rights or obligations be sold, transferred or assigned

by the Partnership or pledged or encumbered by the Partnership to secure any

debt or other obligation of the Partnership or of any of the Partners. In

addition, it is the intent of the parties hereto that no distribution to any

Limited Partner shall be deemed a return of money or other property in violation

of the Act. However, if any court of competent jurisdiction holds that,

notwithstanding the provisions of this Agreement, any Limited Partner is

obligated to return such money or property, such obligation shall be the

obligation of such Limited Partner and not of the General Partner. Without

limiting the generality of the foregoing, a deficit Capital Account of a Partner

shall not be deemed to be a liability of such Partner nor an asset or property

of the Partnership.

<PAGE>

ARTICLE V

PROFITS AND LOSSES: DISTRIBUTIONS

5.01 ALLOCATION OF PROFIT AND LOSS.

(a) General.

(i) Profit of the Partnership for each fiscal

year of the Partnership shall be allocated in the following

order of priority:

(A) First, to the Partners in

proportion to and up to the amount of cash

distributed to each such Partner pursuant to Section

5.02 for the fiscal year; and

(B) Thereafter, to the Partners in

accordance with their respective Percentage

Interests.

(ii) Loss of the Partnership for each fiscal year

of the Partnership shall be allocated to the Partners in

accordance with their respective Percentage Interests.

(iii) Depreciation and amortization expenses of

the Partnership shall be allocated among the Partners in

accordance with their respective Percentage Interests.

(b) Minimum Gain Chargeback. Notwithstanding any

provision to the contrary, (i) any expense of the Partnership that is a

"nonrecourse deduction" within the meaning of Regulations Section 1.704-2(b)(1)

shall be allocated in accordance with the Partners' respective Percentage

Interests, (ii) any expense of the Partnership that is a "partner nonrecourse

deduction" within the meaning of Regulations Section 1.704-2(i)(2) shall be

allocated in accordance with Regulations Section 1.704-2(i)(1), (iii) if there

is a net decrease in Partnership Minimum Gain within the meaning of Regulations

Section 1.704-2(f)(1) for any Partnership taxable year, items of gain and income

shall be allocated among the Partners in accordance with Regulations Section

1.704-2(f) and the ordering rules contained in Regulations Section 1.7042(j),

and (iv) if there is a net decrease in Partner Nonrecourse Debt Minimum Gain

within the meaning of Regulations Section 1.704-2(i)(4) for any Partnership

taxable year, items of gain and income shall be allocated among the Partners in

accordance with Regulations Section 1.7042(i)(4) and the ordering rules

contained in Regulations Section 1.704-2(j). A Partner's "interest in

partnership profits" for purposes of determining its share of the nonrecourse

liabilities of the Partnership within the meaning of Regulations Section

1.752-3(a)(3) shall be such Partner's Percentage Interest.

receives in any taxable year an adjustment, allocation, or distribution

described in subparagraphs (4), (5), or (6) of Regulations Section

1.704-1(b)(2)(ii)(d) that causes or increases a negative balance in such

Partner's Capital Account that exceeds the sum of such Partner's shares of

Partnership Minimum Gain and Partner Nonrecourse Debt Minimum Gain, as

determined in accordance with

<PAGE>

Regulations Sections 1.704-2(g) and 1.704-2(i), such Partner shall be allocated

specially for such taxable year (and, if necessary, later taxable years) items

of income and gain in an amount and manner sufficient to eliminate such negative

Capital Account balance as quickly as possible as provided in Regulations

Section 1.704-1 (b)(2)(ii)(d). After the occurrence of an allocation of income

or gain to a Limited Partner in accordance with this Section 5.01(c), to the

extent permitted by Regulations Section 1.704-l(b) and Section 5.01(d), items of

expense or loss shall be allocated to such Partner in an amount necessary to

offset the income or gain previously allocated to such Partner under this

Section 5.01(c).

(d) Capital Account Deficits. Loss shall not be allocated

to a Limited Partner to the extent that such allocation would cause a deficit in

such Partner's Capital Account (after reduction to reflect the items described

in Regulations Section 1.704-1(b)(2)(ii)(d)(4), (5) and (6)) to exceed the sum

of such Partner's shares of Partnership Minimum Gain and Partner Nonrecourse

Debt Minimum Gain. Any Loss in excess of that limitation shall be allocated to

the General Partner. After the occurrence of an allocation of Loss to the

General Partner in accordance with this Section 5.01(d), to the extent permitted

by Regulations Section 1.704-1(b), Profit shall be allocated to such Partner in

an amount necessary to offset the Loss previously allocated to such Partner

under this Section 5.01(d).

(e) Allocations Between Transferor and Transferee. If a

Partner transfers any part or all of its Partnership Interest, the distributive

shares of the various items of Profit and Loss allocable among the Partners

during such fiscal year of the Partnership shall be allocated between the

transferor and the transferee Partner either (i) as if the Partnership's fiscal

year had ended on the date of the transfer, or (ii) based on the number of days

of such fiscal year that each was a Partner without regard to the results of

Partnership activities in the respective portions of such fiscal year in which

the transferor and the transferee were Partners. The General Partner, in its

sole and absolute discretion, shall determine which method shall be used to

allocate the distributive shares of the various items of Profit and Loss between

the transferor and the transferee Partner.

(f) Definition of Profit and Loss. "Profit" and "Loss"

and any items of income, gain, expense, or loss referred to in this Agreement

shall be determined in accordance with federal income tax accounting principles,

as modified by Regulations Section 1.704-1(b)(2)(iv), except that Profit and

Loss shall not include items of income, gain and expense that are specially

allocated pursuant to Section 5.01(a)(iii), 5.01(b), 5.01(c), or 5.01(d). All

allocations of income, Profit, gain, Loss, and expense (and all items contained

therein) for federal income tax purposes shall be identical to all allocations

of such items set forth in this Section 5.01, except as otherwise required by

Section 704(c) of the Code and Regulations Section 1.704-1(b)(4). The General

Partner shall have the authority to elect the method to be used by the

Partnership for allocating items of income, gain, and expense as required by

Section 704(c) of the Code (including a method that may result in a Partner

receiving a disproportionately larger share of the Partnership's tax

depreciation deductions) and such election shall be binding on all Partners.

<PAGE>

5.02 DISTRIBUTION OF CASH.

(a) Except as provided in Section 5.06, the General

Partner shall be required to make distributions of Available Cash pursuant to

Sections 5.02(a)(i), 5.02(a)(ii), 5.02(a)(iii) and 5.02(a)(iv) on a quarterly

(or, at the election of the General Partner, more frequent) basis to the

Partners who are Partners on the Partnership Record Date with respect to such

quarter (or other distribution period). The amount and frequency of the

distributions of Available Cash pursuant to Section 5.02(a)(v) shall be

determined by the General Partner in its sole discretion. Available Cash shall

be distributed to the Partners in the following order of priority:

(i) First, to the Class A Partners until the

Cross Over Date, in an amount sufficient to provide each Class

A Partner its Preferred Return from the date of the first

issuance of Class A Partnership Units through the date of the

distribution less any prior distributions to the Class A

Partners pursuant to this Section 5.01(a)(i); provided that if

the Partnership does not have sufficient funds to distribute

to provide each Class A Partner with its Preferred Return,

distributions pursuant to this Section 5.02(a)(i) shall be

made pro rata to the Class A Partners in accordance with the

amount otherwise due to each Class A Partner under this

Section 5.02(a)(i);

(ii) Second, to the Outside Partners (which shall

exclude the Class A Partners prior to the Cross Over Date, but

shall include the Class A Partners, other than Class A

Partners that are also UDR Partners, on and after the Cross

Over Date) in proportion to their respective Percentage

Interests on the Partnership Record Date, until each Outside

Partner has received an amount equal to its Dividend

Equivalent for such quarter (or other distribution period);

(iii) Third, to the UDR Partners, other than,

prior to the Cross Over Date, UDR Partners who are also Class

A Partners, in proportion to their respective Percentage

Interests on the Partnership Record Date, until each UDR

Partner has received an amount equal to the excess, if any, of

(A) the amount that such UDR Partner would have received

pursuant to Sections 5.02(a)(iv) and 5.02(a)(v) in the absence

of Section 5.02(a)(ii) and this Section 5.02(a)(iii) from

November 4, 1995 to the end of the period to which the

distribution relates (assuming that distributions under

Section 5.02(a)(v), like the distributions under Sections

5.02(a)(i) through 5.02(a)(iv), were required to be made on a

quarterly or more frequent basis), over (B) the sum of all

prior distributions to such UDR Partner pursuant to this

Section 5.02(a)(iii), Section 5.02(a)(iv) and Section

5.02(a)(v);

(iv) Fourth, to the Partners (which shall exclude

the Class A Partners prior to the Cross Over Date, but shall

include the Class A Partners on and after the Cross Over Date)

in accordance with their respective Percentage Interests on

the Partnership Record Date, until each such Outside Partner

has received an amount equal to the excess, if any, of (A) the

amount equal to its Dividend Equivalent from November 4, 1995

to the end of the period to which the

<PAGE>

distribution relates, over (B) the sum of all prior

distributions to such Outside Partner pursuant to Section

5.02(a)(ii) and this Section 5.02(a)(iv); and

(v) Thereafter, to the Partners (which shall

exclude the Class A Partners prior to the Cross Over Date, but

shall include the Class A Partners on and after the Cross Over

Date) in accordance with their respective Percentage Interests

on the Partnership Record Date.

The amount and frequency of distributions of any cash other than

Available Cash shall be determined by the General Partner in its sole discretion

and, if distributed, such cash shall be distributed to the Partners in

accordance with this Section 5.02(a). If a new or existing Partner acquires an

additional Partnership Interest in exchange for a Capital Contribution on any

date other than a Partnership Record Date, the cash distribution attributable to

such additional Partnership Interest for the Partnership Record Date following

the issuance of such additional Partnership Interest shall be reduced in the

proportion that the number of days that such additional Partnership Interest is

held by such Partner bears to the number of days between such Partnership Record

Date and the immediately preceding Partnership Record Date.

(b) Notwithstanding any other provision of this

Agreement, the General Partner is authorized to take any action that it

determines to be necessary or appropriate to cause the Partnership to comply

with any withholding requirements established under the Code or any other

federal, state or local law including, without limitation, pursuant to Sections

1441, 1442, 1445, and 1446 of the Code. If the Partnership is required to

withhold and pay over to any taxing authority any amount resulting from the

allocation or distribution of income to a Partner or its assignee (including by

reason of Section 1446 of the Code) and if the amount to be distributed to the

Partner (the "Distributable Amount") equals or exceeds the amount required to be

withheld by the Partnership (the "Withheld Amount"), the Withheld Amount shall

be treated as a distribution of cash to such Partner. If, however, the

Distributable Amount is less than the Withheld Amount, no amount shall be

distributed to the Partner, the Distributable Amount shall be treated as a

distribution of cash to such Partner, and the excess of the Withheld Amount over

the Distributable Amount shall be treated as a loan (a "Partnership Loan") from

the Partnership to the Partner on the day the Partnership pays over such excess

to a taxing authority. A Partnership Loan may be repaid, at the election of the

General Partner in its sole and absolute discretion, either (i) through

withholding by the Partnership with respect to subsequent distributions to the

applicable Partner or assignee, or (ii) at any time more than twelve (12) months

after a Partnership Loan arises, by cancellation of Partnership Units with a

value equal to the unpaid balance of the Partnership Loan (including accrued

interest). Any amounts treated as a Partnership Loan pursuant to this Section

5.02(b) shall bear interest at the lesser of (i) the base rate on corporate

loans at large United States money center commercial banks, as published from

time to time in The Wall Street Journal (or an equivalent successor

publication), or (ii) the maximum lawful rate of interest on such obligation,

such interest to accrue from the date the Partnership is deemed to extend the

loan until such loan is repaid in full.

cash with respect to a Partnership Unit if such Partner is entitled to receive a

cash dividend as the holder of record of a REIT Share for which all or part of

such Partnership Unit has been or will be exchanged.

<PAGE>

5.03 REIT DISTRIBUTION REQUIREMENTS. Notwithstanding anything to

the contrary in this Agreement, the General Partner, if it is not able to borrow

money from the Partnership, may cause the Partnership to distribute amounts

sufficient to enable the Company to pay stockholder dividends that will allow

the Company to (i) meet its distribution requirement for qualification as a REIT

as set forth in Section 857(a)(1) of the Code and (ii) avoid any federal income

or excise tax liability imposed by the Code.

5.04 NO RIGHT TO DISTRIBUTIONS IN KIND. No Partner shall be

entitled to demand property other than cash in connection with any distributions

by the Partnership.

5.05 LIMITATIONS ON RETURN OF CAPITAL CONTRIBUTIONS.

Notwithstanding any of the provisions of this Article V, no Partner shall have

the right to receive and the General Partner shall not have the right to make, a

distribution that includes a return of all or part of a Partner's Capital

Contributions, unless after giving effect to the return of a Capital

Contribution, the sum of all Partnership liabilities, other than the liabilities

to a Partner for the return of his Capital Contribution, does not exceed the

fair market value of the Partnership's assets.

5.06 DISTRIBUTIONS UPON LIQUIDATION.

(a) Upon liquidation of the Partnership, after payment

of, or adequate provision for, debts and obligations of the Partnership,

including any Partner loans, any remaining assets of the Partnership shall be

distributed to all Partners with positive Capital Accounts in accordance with

their respective positive Capital Account balances. For purposes of the

preceding sentence, the Capital Account of each Partner shall be determined

after all adjustments made in accordance with Sections 5.01 and 5.02 resulting

from Partnership operations and from all sales and dispositions of all or any

part of the Partnership's assets. Any distributions pursuant to this Section

5.06 shall be made by the end of the Partnership's taxable year in which the

liquidation occurs (or, if later, within 90 days after the date of the

liquidation). To the extent deemed advisable by the General Partner, appropriate

arrangements (including the use of a liquidating trust) may be made to assure

that adequate funds are available to pay any contingent debts or obligations.

(b) If the General Partner has a negative balance in its

Capital Account following a liquidation of the Partnership, as determined after

taking into account all Capital Account adjustments in accordance with Sections

5.01 and 5.02 resulting from Partnership operations and from all sales and

dispositions of all or any part of the Partnership's assets, the General Partner

shall contribute to the Partnership an amount of cash equal to the negative

balance in its Capital Account and such cash shall be paid or distributed by the

Partnership to creditors, if any, and then to the Limited Partners in accordance

with Section 5.06(a). Such contribution by the General Partner shall be made by

the end of the Partnership's taxable year in which the liquidation occurs (or,

if later, within 90 days after the date of the liquidation).

5.07 SUBSTANTIAL ECONOMIC EFFECT. It is the intent of the Partners

that the allocations of Profit and Loss under the Agreement have substantial

economic effect (or be consistent with the Partners' interests in the

Partnership in the case of the allocation of losses attributable to nonrecourse

debt) within the meaning of Section 704(b) of the Code as interpreted by the

<PAGE>

Regulations promulgated pursuant thereto. Article V and other relevant

provisions of this Agreement shall be interpreted in a manner consistent with

such intent.

ARTICLE VI

RIGHTS, OBLIGATIONS AND POWERS OF THE GENERAL PARTNER

6.01 MANAGEMENT OF THE PARTNERSHIP.

(a) Except as otherwise expressly provided in this

Agreement, the General Partner shall have full, complete and exclusive

discretion to manage and control the business of the Partnership for the

purposes herein stated, and shall make all decisions affecting the business and

assets of the Partnership. Subject to the restrictions specifically contained in

this Agreement, the powers of the General Partner shall include, without

limitation, the authority to take the following actions on behalf of the

Partnership:

(i) to acquire, purchase, own, operate, lease

and dispose of any real property and any other property or

assets, including, without limitation, equity interests in

other REITs, mortgage loans and participations therein, that

the General Partner determines are necessary or appropriate or

in the best interests of the business of the Company and the

Partnership;

(ii) to construct buildings and make' other

improvements on the properties owned or leased by the

Partnership;

(iii) to authorize, issue, sell, redeem or

otherwise purchase any Partnership Interests or any securities

(including secured and unsecured debt obligations of the

Partnership, debt obligations of the Partnership convertible

into any class or series of Partnership Interests, or options,

rights, warrants or appreciation rights relating to any

Partnership Interests) of the Partnership;

(iv) to borrow or lend money for the Partnership,

issue or receive evidences of indebtedness in connection

therewith, refinance, increase the amount of, modify, amend or

change the terms of, or extend the time for the payment of,

any such indebtedness, and secure such indebtedness by

mortgage, deed of trust, pledge or other lien on the

Partnership's assets;

(v) to guarantee or become a comaker of

indebtedness of the Company or any Subsidiary thereof,

refinance, increase the amount of, modify, amend or change the

terms of, or extend the time for the payment of, any such

guarantee or indebtedness, and secure such guarantee or

indebtedness by mortgage, deed of trust, pledge or other lien

on the Partnership's assets;

(vi) to use assets of the Partnership (including,

without limitation, cash on hand) for any purpose consistent

with this Agreement, including, without limitation, payment,

either directly or by reimbursement, of all operating costs

and general administrative expenses of the Company, the

Partnership, or any

<PAGE>

Subsidiary of either to third parties or to the Company as set

forth in this Agreement;

(vii) to lease all or any portion of any of the

Partnership's assets, whether or not the terms of such leases

extend beyond the termination date of the Partnership and

whether or not any portion of the Partnership's assets so

leased are to be occupied by the lessee, or, in turn,

subleased in whole or in part to others, for such

consideration and on such terms as the General Partner may

determine;

(viii) to prosecute, defend, arbitrate, or

compromise any and all claims or liabilities in favor of or

against the Partnership, on such terms and in such manner as

the General Partner may reasonably determine, and similarly to

prosecute, settle or defend litigation with respect to the

Partners, the Partnership, or the Partnership's assets;

provided, however, that the General Partner may not, without

the consent of the Limited Partners (other than the Original

Limited Partner) holding more than 50% of the Percentage

Interests of the Limited Partners (other than the Original

Limited Partner), confess a judgment against the Partnership;

(ix) to file applications, communicate, and

otherwise deal with any and all governmental agencies having

jurisdiction over, or in any way affecting, the Partnership's

assets or any other aspect of the Partnership business;

(x) to make or revoke any election permitted or

required of the Partnership by any taxing authority;

(xi) to maintain such insurance coverage for

public liability, fire and casualty, and any and all other

insurance for the protection of the Partnership, for the

conservation of Partnership assets, or for any other purpose

convenient or beneficial to the Partnership, in such amounts

and such types, as it shall determine from time to time;

(xii) to determine whether or not to apply any

insurance proceeds for any property to the restoration of such

property or to distribute the same;

(xiii) to establish one or more divisions of the

Partnership, to hire and dismiss employees of the Partnership

or any division of the Partnership, and to engage legal

counsel, accountants, consultants, real estate brokers, and

other professionals, as the General Partner may deem necessary

or appropriate in connection with the Partnership business, on

such terms (including provisions for compensation and

eligibility to participate in employee benefit plans, stock

option plans and similar plans funded by the Partnership) as

the General Partner may deem reasonable and proper;

(xiv) to retain other services of any kind or

nature in connection with the Partnership business, and to pay

therefor such remuneration as the General Partner may deem

reasonable and proper;

<PAGE>

(xv) to negotiate and conclude agreements on

behalf of the Partnership with respect to any of the rights,

powers and authority conferred upon the General Partner;

(xvi) to maintain accurate accounting records and

to file promptly all federal, state and local income tax

returns on behalf of the Partnership;

(xvii) to distribute Partnership cash or other

Partnership assets in accordance with this Agreement;

(xviii) to form or acquire an interest in, and

contribute property to, any further limited or general

partnerships, joint ventures or other relationships that it

deems desirable (including, without limitation, the

acquisition of interests in, and the contributions of property

to, its Subsidiaries and any other Person in which it has an

equity interest from time to time);

(xix) to establish Partnership reserves for

working capital, capital expenditures, contingent liabilities,

or any other valid Partnership purpose;

(xx) subject to Article XI, to merge, consolidate

or combine the Partnership with or into another Person;

(xxi) subject to Article XI, to do any and all

acts and things necessary or prudent to ensure that the

Partnership will not be classified as a "publicly traded

partnership" for purposes of Section 7704 of the Code; and

(xxii) to take such other action, execute,

acknowledge, swear to or deliver such other documents and

instruments, and perform any and all other acts that the

General Partner deems necessary or appropriate for the

formation, continuation and conduct of the business and

affairs of the Partnership (including, without limitation, all

actions consistent with allowing the General Partner at all

times to qualify as a REIT unless the General Partner

voluntarily terminates its REIT status) and to possess and

enjoy all of the rights and powers of a general partner as

provided by the Act.

(b) Except as otherwise provided herein, to the extent

the duties of the General Partner require expenditures of funds to be paid to

third parties, the General Partner shall not have any obligations hereunder

except to the extent that Partnership funds are reasonably available to it for

the performance of such duties, and nothing herein contained shall be deemed to

authorize or require the General Partner, in its capacity as such, to expend its

individual funds for payment to third parties or to undertake any individual

liability or obligation on behalf of the Partnership.

6.02 DELEGATION OF AUTHORITY. The General Partner may delegate any

or all of its powers, rights and obligations hereunder, and may appoint, employ,

contract or otherwise deal with any Person for the transaction of the business

of the Partnership, which Person may, under supervision of the General Partner,

perform any acts or services for the Partnership as the General Partner may

approve.

<PAGE>

6.03 INDEMNIFICATION AND EXCULPATION OF INDEMNITEES.

(a) The Partnership shall indemnify an Indemnitee from

and against any and all losses, claims, damages, liabilities, joint or several,

expenses (including reasonable legal fees and expenses), judgments, fines,

settlements, and other amounts arising from any and all claims, demands,

actions, s

SITE SEARCH

AGREEMENTS / CONTRACTS

CLAUSES

Search Contract Clauses >>

Browse Contract Clause Library>>

Get Email Updates