Fill and Sign the Third Amended and Restated Limited Partnership Agreement Secgov Form

- 1 - APPENDIX A AMENDED AND RESTATED AGREEMENT OF LIMITED PARTNERSHIP OF GOULD INVESTORS L.P. AGREEMENT OF LIMITED PARTNERSHIP dated as of the 15th day of October, 1985, by and among Georgetown Partners, Inc., a Delaware corporation, Fredric H. Gould of Great Neck, N.Y., and Marshall Rose of New York, N.Y., as General Partners, Fredric H. Gould, as Original Limited Partner, and the persons who become Partners of the Partnership as hereinafter provided. In consideration of the mutual covenants, conditions and agreements hereinafter set forth, the Partnership is continued and the Agreement of Limited Partnership among the General Partners and the Original Limited Partner is amended and restated so as to read in its entirety as follows and the parties certify and agree as follows: ARTICLE IDefinitions The following definitions shall for all purposes, unless otherwise indicated, apply to the terms used in this Agreement. 1. 1 "Additional Limited Partner" means a Person admitted to the Partnership pursuant to this Agreement as a Limited Partner who is not an Original, Initial or Substituted Limited Partner. 1.2 "Affiliate" means any Person that directly or indirectly controls, is controlled by or is under common control with, the Person in question. As used in the definition of "Affiliate", the term "control" means the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of a Person, whether though ownership of voting securities, by contract or otherwise. 1.3 "Agreed Value" of property distributed to a Partner on the liquidation of the Partnership means the fair market value of such property, as determined by the Managing General Partner. 1.4 "Agreement" means this Amended and Restated Agreement of Limited Partnership, as it may be further amended or supplemented from time to time. 1.5 "Assignee" means a Person to whom one or more Units have been transferred, by assignment of a Certificate or otherwise, and who has not become a Substituted Limited Partner. 1.6 "Capital Account" means the account which shall be established for each Partner which shall equal each Partner's Capital Contribution increased by (i) all items of Partnership income and gain allocated to such Partner pursuant to Article VIII of this Agreement and decreased by (ii) the cash, and subject to Section 14.5, the adjusted basis of all distributions made to such Partner pursuant to this Agreement and (iii) all items of Partnership loss and deduction allocated to such - 2 - Partner pursuant to Article VIII of this Agreement. The recognition and classification of items of income, gain, loss, deduction and credit for purposes of this definition shall be the same as their recognition and classification for Federal income tax purposes. A transferee of a Partnership Interest will succeed to the Capital Account relating to the Partnership Interest transferred.1.7 "Capital Contribution" for each Partner means the total amount contributed to the capital of the Partnership by such Partner as provided in Article IV. 1.8 "Cash Available For Distribution" means the excess of cash held by the Partnership over (1) cash required for all cash expenses, liabilities and obligations of the Partnership (whether for expense items. capital expenditures. improvements, retirement of indebtedness or otherwise) and 00 reserves as established in the sole discretion of the Managing General Partner for Partnership capital expenditures, improvements, retirement of indebtedness, operations or contingencies, known or unknown liquidated or unliquidated, including, but not limited to, liabilities which may be incurred in litigation and liabilities undertaken pursuant to the indemnification provisions of this Agreement. 1.9 "Certificate" means a certificate issued in accordance with the Transfer Agent Agreement. evidencing ownership of one or more Units, to be in such form as shall be determined from time to time by the General Partners. 1.10 "Certificate of Limited Partnership" means the Certificate of Limited Partnership of the Partnership filed with the Secretary of State of Delaware pursuant to Section 5. 1, as it may be amended or restated from time to time. 1.11 "Code" means the Internal Revenue Code of 1954, as amended, and in effect from time to time. 1.12 "Delaware Act" means the Delaware Revised Uniform Limited Partnership Act, as it may be amended from time to time, or any successor statute. 1.13 "Departing Partner" has the meaning specified in Section 13.3. 1.14 “Effective Date" means the Effective Date of the Plan (as defined in the Plan). 1.15 "General Partner" means the Persons named above as general partners in their respective capacities as general partners of the Partnership and any successor or additional general partners. 1.16 "GIT" means Gould Investors Trust, a real estate investment trust organized under the laws of the Commonwealth of Massachusetts. 1.17 "Initial Limited Partners" means Persons admitted as Limited Partners as a result of the issuance of Partnership Interests pursuant to the Plan. The names and addresses of the Initial Limited Partners are set forth in the books and records of the Partnership. 1.18 "Initial Trading Date" has the meaning specified in Section 11.3(a). - 3 - 1. 19 "Invested Assets" has the meaning specified in Section 5.4(b). 1.20 "Limited Partner" means the Original Limited Partner, each Initial Limited Partner, each person admitted as a Limited Partner pursuant to Article XII and any General Partner whose Partnership interest is converted into a limited partnership interest pursuant to Section 13.3. The Original Limited Partner shall cease to be a limited partner and shall be deemed to have withdrawn as a limited partner upon the execution of this Agreement by the General Partners and by the Managing General Partners as attorney-in-fact for the Initial Limited Partners. The Initial Limited Partners shall be admitted as limited partners when the books and records of the Partnership reflect their admission as limited partners. 1.21 "Liquidator" has the meaning specified in Section 14.3. 1.22 "Majority Interest" means Limited Partners holding more than 50% of the Percentage Interests held by the Limited Partners. 1.23 "Managing General Partner" means Georgetown Partners, Inc. and its successors or any Person admitted as a Managing General Partner pursuant to Article XII. 1.24 "NASDAQ" means the National Association of Securities Dealers Automated Quotation System. 1.25 "Original Limited Partner" means Fredric H. Gould. 1.26 "Partner" means a General Partner or a Limited Partner. "Partners" means all General Partners and Limited Partners. 1.27 "Partnership" means the limited partnership established by this Agreement. 1.28 "Partnership Interest" means the interest of a Partner in the Partnership. 1.29 "Percentage Interest" means (i) as to each General Partner (other than the Managing General Partner), 1 % and as to the Managing General Partner 1 /100th of 1 %, and (ii) as to a Limited Partner, the product of (x) 97.99% multiplied by (y) the amount determined by dividing such Limited Partner's Units by the total Units outstanding. 1.30 "Person" means an individual or a corporation, partnership, trust, unincorporated organization, association or other entity. 1.31 "Plan" means the Plan of Reorganization and Liquidation of Gould Investors Trust described in the Proxy Statement/Prospectus. 1.32 "Proxy Statement/Prospectus" means that certain proxy statement/prospectus sent to holders of Shares of Beneficial Interest of GIT for the meeting of shareholders to be held for the approval of the Plan, as it may be amended or supplemented from time to time. - 4 - 1.33 "Record Date" means the date established by the Partnership for determining (i) the identity of Partners and Assignees entitled to notice of and to vote at any meeting of Partners and Assignees or entitled to vote by ballot or give consent to Partnership action in writing without a meeting or entitled to exercise rights with respect of any other lawful action of Partners and Assignees or (ii) the identity of Partners and Assignees entitled to receive any reports, distributions or allocations under this Agreement. 1.34 "Registered Agent" in the State of Delaware, shall mean United Corporate Services, Inc., or such other registered agent as the Managing General Partner may designate in accordance with the Delaware Act. 1.35 "Registered Office" in the State of Delaware shall be c/o United Corporate Services, Inc., 4 10 South State Street, in the City of Dover, County of Kent, State of Delaware, or such other office as the Managing General Partner may designate in accordance with the Delaware law. 1.36 "Return of Capital" means any distribution to Partners to the extent such distribution exceeds the sum of the net income of the Partnership since its formation (net income to be computed on the accrual method in accordance with generally accepted accounting principles) less the sum of net losses of the Partnership since its formation (net losses to be computed on the accrual method in accordance with generally accepted accounting principles) and less the sum of all prior distributions to the extent such distributions did not constitute a Return of Capital. 1.37 "Shares of Beneficial Interest" means the shares of Beneficial Interest, par value $1.00 per share, of GIT. 1.38 "Substituted Limited Partner" means a person who is admitted as a Limited Partner to the Partnership pursuant to this Agreement in place of and with all the rights of a Limited Partner. 1.39 "Tax Matters Partner" means Fredric H. Gould or, if he should cease to be a General Partner, then the Managing General Partner. 1.40 "Transfer Agent" means the person named as such in the Transfer Agent Agreement. 1.41 "Transfer Agent Agreement" means the Transfer Agent and Registrar Agreement, between the Trust and the Transfer Agent, that will be assigned to and assumed by the Partnership, as it may be amended or supplemented from time to time. 1.42 "Transfer Application" means an Application for Transfer of Units in the form set forth on the back of a Certificate or in a separate instrument substantially to the same effect. 1.43 "Transfer Record" has the meaning specified in Section 12. 1. 1.44 "Unit" means a unit of limited partnership interest in the Partnership, other than the limited partnership interest of a Departing General Partner pursuant to Section 13.3(b). - 5 - 1.45 "Unit Price" means, if the Units are listed for trading on a national securities exchange, the closing price on such exchange of a Unit on the trading day before the day on which the Unit Price is determined or, if Units are not listed for trading on a national securities exchange, the closing price of a Unit on the NASDAQ National Market on such trading day or, if the Units are not listed for trading on a national securities exchange or quoted on the NASDAQ National Market, the average of the high and low bid prices for a Unit on NASDAQ on such trading day. ARTICLE II Formation of Partnership SECTION 2.1. Formation. The General Partners and Original Limited Partner formed the Partnership as a limited partnership pursuant to the provisions of the Delaware Act. The Partnership Interest of any Partner shall be personal property for all purposes. SECTION 2.2. Name. The name of the Partnership is GOULD INVESTORS L.P. The Managing General Partner may from time to time as it deems necessary, appropriate or advisable amend this Agreement to change the name of the Partnership. The business of the Partnership may be conducted under any name selected by the Managing General Partner, including the name of the Managing General Partner. SECTION 2.3. Principal and Registered Office. The principal office of the Partnership shall be at 60 Cutter Mill Road, Great Neck, New York 1102 1. The Managing General Partner may in its discretion from time to time change the principal office and may establish such additional place or places of business as the Managing General Partner may from time to time determine. The registered office of the Corporation is io be located at 4 10 South State Street, in the City of Dover, in the County of Kent, in the State of Delaware. The name of its registered agent at that address is United Corporate Services, Inc. SECTION 2.4. Term. The Partnership shall commence business on the date of the filing of the Certificate of Limited Partnership and shall continue in existence thereafter until December 31, 2084 unless sooner terminated pursuant to Article XIV. The General Partners shall not commence or engage in any business on behalf of the Partnership until after approval of the Plan and other matters necessary or incidental to the Partnership's organization and qualification. ARTICLE III Purpose and Business The purpose and business of the Partnership shall be to receive the real estate assets of GIT, subject to existing mortgages, to receive GIT's other assets and to assume GIT's other obligations and liabilities and to engage in any and all phases of the business of acquiring, holding, owning, maintaining, financing, developing, operating, selling, exchanging, improving, leasing, converting to cooperative or condominium ownership, disposing of and otherwise dealing in or with any interests or rights in real property and personal property; without limiting the generality of the foregoing, the Partnership may engage in such other activities as the Managing General Partner determines to be necessary or appropriate. ARTICLE IV - 6 - Capital Contributions SECTION 4. 1. Contribution of Original Limited Partner. The Original Limited Partner has made an initial contribution to the capital of the Partnership in the amount of $ 100. SECTION 4.2. Initial Limited Partners Contribution. Pursuant to the Plan, each holder of Shares of Beneficial Interest on the Effective Date of the Plan shall be issued one Unit for each unredeemed Share of Beneficial Interest held on the Effective Date. The amount of the Capital Contribution by each Initial Limited Partner pursuant to this Section 4.2 shall be such Limited Partner's adjusted basis in the assets distributed by the Trust (and constructively contributed by the Limited Partner) to the Partnership, provided, however, that the Partnership may use statistical sampling techniques to determine said adjusted basis in cases where the Partnership lacks sufficient information to make a reasonably accurate determination of said basis. SECTION 4.3. General Partners' Contribution. Each General Partner (other than the Managing General Partner) shall contribute to the Partnership outstanding Shares of Beneficial Interest equal to 1% of the Shares of Beneficial Interest which will be acquired by the Partnership pursuant to the Plan. The Managing General Partner shall contribute to the Partnership cash in an amount equal to 1% of the remainder of the market value on the trading date preceding the date of the shareholders' meeting referred to in Section 1.32 of the Shares of Beneficial Interest contributed by Fredric H. Gould to the Partnership pursuant to this Section 4.3, minus the market value on that trading day of the shares of beneficial interest in BRT Realty Trust distributed to him as a liquidating dividend on the Shares of Beneficial Interest contributed. SECTION 4.4. Additional Issuances of Securities. (a) In order to raise additional capital or to acquire assets or to redeem or retire debt or for any other Partnership purpose, the Managing General Partner is authorized to issue additional Units from time to time to Partners or to other persons and to admit such persons as Additional Limited Partners. The Partnership may assume related liabilities in connection with any such issuance. The Managing General Partner shall have sole and complete discretion in determining the consideration and terms and conditions with respect to any future issuance of Units. In addition, the Managing General Partner is authorized to cause the issuance of limited partnership interests having preferences as to distributions and other types of securities from time to time to Partners or other persons on terms and conditions established in the sole and complete discretion of the Managing General Partner. The Managing General Partner shall do all things necessary to comply with the Delaware Act and is authorized and directed to do all things it deems to be necessary or advisable in connection with any such future issuance, including compliance with any statute, rule, regulation or guideline of any Federal, state or other governmental agency or any stock exchange on which the Units are listed for trading. (b) The Partnership shall not issue additional Units for cash to any General Partner or any Affiliate of a General Partner, unless the price per Unit shall be equal to the Unit Price. - 7 - SECTION 4.5. No Preemptive Rights. No Partner or Assignee shall have any preemptive, preferential or other right with respect to (a) additional contributions to the capital of the Partnership, (b) issuance or sale of Units, whether or not previously issued, (c) issuance of any obligations, evidences of indebtedness or other securities of the Partnership convertible into or exchangeable for, or carrying or accompanied by any rights to receive, purchase or subscribe to Units, (d) issuance of any right of subscription to or right to receive, or any warrant or option for the purchase of, any of the foregoing securities or (e) issuance or sale of any other securities that may be issued or sold by the Partnership. SECTION 4.6. Capital Accounts. The Managing General Partner shall maintain for each Partner a separate Capital Account and such other accounts as may be necessary or desirable to comply with the requirements of applicable law and regulations thereunder. SECTION 4.7. Interest. No interest shall be paid by the Partnership on contributions to the capital of the Partnership or on balances in Partners' Capital Accounts. SECTION 4.8. No Withdrawal. A Partner shall not be entitled to withdraw any part of his contribution to the Partnership or his Capital Account or to receive any distribution from the Partnership, except as provided in Articles XIII and XIV. SECTION 4.9. Loans from Partners. Loans by a Partner to the Partnership shall not be considered contributions to the capital of the Partnership. ARTICLE V Management and Operation of Business SECTION 5. 1. Management. (a) The Managing General Partner shall have full, exclusive and complete discretion in the management and control of the business of the Partnership except that, for as long as Fredric H. Gould is a General Partner, he shall act as the Tax Matters Partner with exclusive authority to extend, renew, modify, adjust, submit to arbitration, defend or compromise any obligation, suit, liability, cause of action or claim for unpaid taxes or penalties or interest thereon. Any General Partner and its partners, officers, directors and shareholders shall have the right to be otherwise employed by an entity or entities other than the Partnership on a part-time or full-time basis. Nothing herein shall prevent any General Partner or any partner, officer, director or shareholder of a General Partner from becoming an Assignee or a Substituted or Additional Limited Partner, whereupon such Person shall be entitled to all rights and shall be subject to all obligations relating to such Units and shall as to such Units be deemed an Assignee or a Limited Partner, as applicable. (b) Promptly after execution of this Agreement, the Managing General Partner shall cause to be filed such certificates or filings as may be required for the formation and operation of the Partnership in Delaware and in any state in addition to Delaware in which the Partnership may elect to do business. - 8 - SECTION 5.2. Powers, Authority, and Duties of Managing General Partner. (a) General. Subject to the provisions of Article XV vesting certain voting rights in the Partners and Assignees, the Managing General Partner shall have the power and authority to do or cause to be done all things deemed by the Managing General Partner necessary or desirable to carry out the purposes of the Partnership, including, without limitation, the power and authority: (i) To acquire, own, lease, sublease, manage, hold, deal in, control or dispose of any interests or rights in real property or personal property, including, but not by way of limitation, the powers to sell, exchange, mortgage, pledge, convey in trust, enter into joint ventures or partnerships respecting or otherwise hypothecate all or any portion of the property, real or personal, now or hereafter owned by the Partnership or in which the Partnership has any interest, right or claim ("Partnership Property"). (ii) To create by grant or otherwise, easements and servitudes. (iii) To alter, improve, repair, raze, replace, and rebuild Partnership Property. (iv) To let or lease Partnership Property for any period and for any purpose. (v) To apply proceeds of any sale, exchange, mortgage, pledge or other disposition of Partnership Property to payment of liabilities of the Partnership and to pay, collect, compromise, arbitrate, or otherwise adjust any and all other claims or demands of or against the Partnership or to hold such proceeds against the payment of contingent liabilities, known or unknown. (vi) To maintain or cause to be maintained records of all rights and interests acquired for or disposed of by the Partnership, all correspondence relating to the Partnership business and records or copies of all statements, bills, and other instruments furnished the Partnership in connection with its business. (vii) To maintain records and accounts of all operations and expenditures, make all filings and reports required under applicable rules and regulations of any governmental department, bureau or agency, any securities exchange and any automated quotation system of a registered securities association, and furnish the Partners and Assignees with all necessary Federal, state or local income tax reporting information or such information with respect to any other jurisdiction. (viii) To purchase and maintain, in its discretion and at the expense of the Partnership, liability and any other insurance, including errors and omissions insurance, sufficient to protect the Partnership, the General Partners and any other Person from those liabilities and hazards which may be insured against in the conduct of the Partnership's business and in the management of the Partnership's business. (ix) To make, execute, assign, acknowledge and file on behalf of the Partnership, any and all documents or instruments of any kind which the Managing General Partner - 9 - may deem appropriate in carrying out the purposes and business of the Partnership, including, without limitation, powers of attorney, agreements of indemnification, sales contracts, deeds, options, loan obligations, mortgages, deeds of trust, notes, documents, or instruments of any kind or character, and amendments thereto.(x) To borrow money or to obtain credit in such amounts, on such terms and conditions, and at such rates as the Managing General Partner deems appropriate, from banks, other lending institutions, and any other Person, including the Partners and Assignees, for any Partnership purpose, including, without limitation, any loan incurred for the purpose of making one or more distributions to any or all Partners and Assignees, including any distributions which are, in whole or in part, a Return of Capital, and in connection with such loans to mortgage, pledge, assign or otherwise encumber or alienate any or all Partnership Property, including any income therefrom, to secure or provide repayment thereof. As between the Partnership and any lender it shall be conclusively presumed that the proceeds of such loans are to be and will be used for the purposes authorized herein and that the Managing General Partner has the full power and authority to borrow such money and to obtain such credit. (xi) To assume obligations, enter into contracts, including contracts of guaranty, incur liabilities, lend money and otherwise use its credit, and secure any of its obligations, contracts or liabilities by mortgage, pledge or other encumbrance of all or any part of its property, franchises and income. (xii) To invest Partnership funds in obligations issued or guaranteed by the United States Government or any state or municipal government or instrumentality thereof, bank time deposits, commercial paper, bankers' acceptances and any other obligations whether bearing interest or not; provided that the Managing General Partner shall not invest Partnership funds in such a manner that the Partnership will be considered to be holding itself out as being engaged primarily in the business of investing, reinvesting or trading in securities or will otherwise be deemed to be an investment company under the Investment Company Act of 1940, as amended. (xiii) To make any election on behalf of the Partnership as is or may be permitted under the Code or under the taxing statutes or rules of any state, local, foreign or other jurisdiction, and to supervise the preparation and filing of all tax and information returns which the Partnership may be required to file. (xiv) To maintain the buildings, appurtenances and grounds of the Partnership Property, including within such maintenance, without limitation thereof, interior and exterior cleaning. painting and decorating, plumbing. carpentry, and such other normal maintenance and repair work as may be appropriate. (xv) To collect all rent and other charges from lessees of Partnership Property, from concessionaires in consequence of the authorized operation of facilities in the Partnership Property and otherwise due the Partnership with respect to the Partnership Property in the ordinary course of business. The Partnership authorizes the Managing - 10 - General Partner to request. demand, collect, receive and receipt for all such rents and other charges and to institute legal proceedings in the name of the Partnership for the collection thereof and for the dispossession of any Person from Partnership Property.(xvi) To cause to be disbursed (A) the aggregate amount required to be paid pursuant to any indebtedness of the Partnership, including therein amounts due under any mortgages or deeds of trust for interest, amortization of principal and for allocations to reserve or escrow funds-, (B) the amount of rent payable by the terms of any lease under which the Partnership holds Partnership Property, or any portion thereof, promptly when due; (C) the amount of all real estate taxes and other impositions levied by appropriate authorities, and (D) amounts otherwise due and payable as expenses of the Partnership authorized to be incurred under the terms of this Agreement. (xvii) To enter into an agreement or agreements with real estate brokers or agents, investment banking firms, appraisers or others providing for the engagement of such Persons on an exclusive or non-exclusive basis to advise or represent the Partnership in the valuation, sale, lease or other dealings in the Partnership Property, it being understood that the Managing General Partner shall not be responsible for the acts and omissions of any such Persons and shall assume no obligations in connection therewith other than the obligation to use due care in the selection thereof. (xviii) To hold Partnership Property in the name of one or more nominees, with or without disclosure of the fiduciary relationship. (xix) To pay, extend, renew, modify, adjust, submit to arbitration. prosecute, defend or compromise, upon such 'terms as it may determine and upon such evidence as it may deem sufficient, any obligation, suit. liability, cause of action or claim, either in favor of or against the Partnership, except those involving taxes. (xx) To prosecute, protect and defend or cause to be protected and defended all trade names. trademarks, servicemarks. and other marks, and all applications with respect thereto which may be held by the Partnership and to take all reasonable and necessary actions to prosecute and defend all rights of the Partnership in connection therewith. (xxi) To register, qualify or list. or cause to be registered, qualified, or listed, this Agreement or Units hereunder pursuant to the Securities Act of 1933, as amended, the Securities Exchange Act of 1934, as amended, any other securities laws of the United States, the securities laws of any state of the United States, the laws of any other jurisdiction, or with any securities exchange or pursuant to an automated quotation system of a registered securities association, as the Managing General Partner deems appropriate. (xxii) To issue, purchase, redeem, receive, take or otherwise acquire, own. hold, sell, lend. exchange, trade in, grant calls or options, grant appreciation rights, transfer or otherwise dispose of, pledge, use and otherwise deal in and with Units and shares, bonds, debentures and other securities. whether issued by the Partnership or issued by any other - 11 - Person, whether on an exchange, over the counter. in private transactions or in other transactions. and whether for the Partnership or for any plan maintained or sponsored by the Partnership, including securities of the Partnership of a different class or series than the Units, whether debt or equity, redeemable or nonredeemable, convertible or nonconvertible, and including securities with different rights, preferences, privileges, allocations and tax consequences.(xxiii) To qualify to do business in any other state, territory, dependency or foreign country. (xxiv) To make donations, regardless of specific benefit to the Partnership, for the public welfare for charitable, educational, scientific, civic, political or similar purposes. (xxv) To pay pensions, and establish and carry out pension, profit-sharing, bonus, purchase, option, savings, thrift and other incentive and benefit plans, trusts and provisions for any or all of the General Partners, employees of a General Partner or the Partnership, and any partner, director or officer of a General Partner, including plans, trusts and provisions which may provide for the ownership, acquisition, holding, or disposition of Units or any other securities of the Partnership, and to indemnify and purchase and maintain insurance on behalf of any fiduciary of such plans, trusts or provisions, including, without limitation, health insurance, medical and dental reimbursement, life insurance, accident insurance, disability insurance and other plans, trusts or provisions. (xxvi) To distribute money or Partnership Property to Partners and Assignees in accordance with this Agreement regardless of the source of such money or Partnership Property, including, without limitation, money borrowed by the Partnership or by the Managing General Partner on behalf of the Partnership. (xxvii) To possess and exercise any additional powers and rights of general partners in a limited partnership, without limitation, under the partnership laws of Delaware and any other applicable laws to the extent not inconsistent with this Agreement. (xxviii) To do any and all acts and conduct all proceedings and execute all rights and privileges, contracts and agreements of any kind whatsoever, although not specifically mentioned in this Agreement, that the Managing General Partner may deem necessary or appropriate to conduct the business of the Partnership or to carry out the purposes of the Partnership. (b) Right of Third Parties to Rely on Authority of Managing General Partner. Notwithstanding any other provision of this Agreement to the contrary, no lender, purchaser or other person shall be required to verify any representation by the Managing General Partner as to the extent of the interest in the assets of the Partnership that the Managing General Partner is entitled to encumber, sell or otherwise use, and any such lender, purchaser or other person shall be entitled to rely exclusively on the representations of the Managing General Partner as to its authority to enter into such financing, sale or other arrangements and shall be entitled to deal with the - 12 - Managing General Partner as if it were the sole party in interest therein, both legally and beneficially.(c) Limitations on Authority. The authority granted the Managing General Partner over the conduct of the affairs of the Partnership shall be subject only to such limitations as are expressly stated in this Agreement. The Managing General Partner shall not sell, transfer or otherwise dispose of all or substantially all the assets of the Partnership without the prior approval of a Majority Interest. The Managing General Partner shall not extend, renew, modify, adjust, submit to arbitration, defend or compromise any obligation, suit, liability, cause of action or claim for unpaid taxes or penalties or interest thereon without the prior approval of the Tax Matters Partner. (d) Committee on Conflicts of Interest. There shall be a committee, composed of not less than three persons who are not Affiliates of the Partnership or any of the General Partners, which shall act by majority vote with regard to (i) the determination and resolution of conflicts of interest between the Partnership, on the one hand, and the General Partners or any of their Affiliates, on the other hand, referred to the committee by a General Partner (ii) the approval of all purchases of real estate properties by the Partnership from the General Partners and their affiliates, or by the General Partners and their affiliates from the Partnership, the purchase price of which is equal to or greater than 10% of the consolidated assets of the Partnership and (111) the approval of the joint use of office space, office equipment and supplies. telecommunications equipment, office staff and other office services by the Partnership and the General Partners and their Affiliates, the aggregate fair market value of which is equal to or greater than 5% of the consolidated assets of the Partnership. The Managing General Partner shall appoint the initial members of the committee. Any member of the committee may be removed at any time without cause by the Managing General Partner or at any properly called meeting of Limited Partners by the affirmative vote of a Majority Interest. Any such action by the Limited Partners must also provide for the election of successor members to the committee. Any vacancy in the committee occurring as a result of a member's removal by the Managing General Partner or withdrawal shall be filled by the remaining members of the committee or, if no member remains. by the Managing General Partner. Any determination and resolution of a conflict of interest made by the committee shall be binding upon the Partnership and the General Partners. (e) Purchase or Sale of Units. The Managing General Partner may, on behalf of the Partnership, purchase or otherwise acquire outstanding Units and, following any such purchase or acquisition, may sell. retire or otherwise dispose of such Units. As long as such Units are held by the Partnership they shall not be considered outstanding for any purpose. A General Partner may also purchase or otherwise acquire Units for its or his own account. (f) Conveyances. The Managing General Partner has the express authority to convey title to any Partnership Property by a conveyance executed by the Managing General Partner alone, on behalf of the Partnership. SECTION 5.3 Expenses. (a) The Partnership shall pay the expenses of the Partnership incurred by the General Partners or any one or more of them or by the Partnership in furtherance of the exercise of the powers - 13 - described in this Article V (or elsewhere in this Agreement), which expenses may include but are not limited to: (i) all costs of personnel employed by the Partnership and involved in the business of the Partnership, including persons who may also be officers or employees of the General Partners or their Affiliates, (ii) rental expense for Partnership administrative offices and facilities, which may be offices and facilities shared by the General Partners and their Affiliates, (iii) all costs of borrowed money, taxes and assessments on Partnership Property and other taxes applicable to the Partnership. (iv) legal, audit, accounting. brokerage and other fees. (v) printing, engraving and other expenses and taxes incurred in connection with the issuance, distribution, transfer. registration and recording of documents evidencing ownership of an interest in the Partnership or in connection with the business of the Partnership. (vi) compensation of bankers, brokers and servicers, leasing agents. consultants. on-site managers, real estate brokers. insurance brokers and other agents, (vii) expenses in connection with the disposition. replacement. alteration. repair. remodeling, refurbishment, leasing, refinancing and operation of Partnership Property (including the costs and expenses of foreclosures, insurance premiums, real estate brokerage and leasing commissions and of maintenance of such Property), (viii) the cost of insurance as required in connection with the business of the Partnership, (ix) expenses of organizing, revising, amending, converting, modifying or terminating the Partnership. (x) expenses in connection with distributions made by the Partnership to. and communications and bookkeeping and clerical work necessary in maintaining relations with, Limited Partners and Assignees, including the cost of printing and mailing to such persons Certificates. and reports of meetings of the Partnership, and of preparation of proxy statements and solicitations of proxies in connection therewith and preparation of ballots, (xi) expenses in connection with preparing and mailing reports required to be furnished to Limited Partners and Assignees for investor. tax reporting or other purposes. or which reports the General Partners deem the furnishing thereof to Limited Partners and Assignees to be in the best interests of the Partnership, (xii) costs of any accounting. statistical or bookkeeping equipment necessary for the maintenance of the books and records of the Partnership. which equipment may be shared with the General Partners and their Affiliates, (xiii) the costs of preparation and dissemination of the informational material and documentation relating to potential sale, refinancing or other disposition of Partnership Property, (xiv) costs incurred in connection with any litigation in which the Partnership is involved, as well as in the examination, investigation or other proceedings conducted by any regulatory agency with jurisdiction over the Partnership, including legal and accounting fees incurred in connection therewith, (xv) costs of any computer equipment, programs, or services used for or by the Partnership, which equipment may be shared with the General Partners and their Affiliates, and (xvi) supervision and expenses of professionals employed by the Partnership in connection with any of the foregoing, including attorneys, accountants and appraisers.(b) The Partnership shall pay all costs and expenses incurred by or for the Partnership in connection with any public offerings by the Partnership of new issuances of equity securities or debt instruments. The Partnership may indemnify and hold harmless any person from any reasonable costs or expenses incurred in connection with any public offering by the Partnership of new issuances of equity securities or debt instruments if the Managing General Partner believes that such indemnity is in the best interests of the Partnership or is generally given to such person(s) in connection with similar offerings by third parties, provided, however, that no such indemnity shall be given by the Partnership to any person for such person's negligent or wrongful acts or omissions. - 14 - SECTION 5.4. Compensation of General Partners. (a) The General Partners' compensation, as provided for in this Section 5.4, shall be allocated among the General Partners in such proportions as the General Partners shall determine, and if no determination is made 50% thereof shall be paid to the Managing General Partner and the balance divided equally among the other General Partners. (b) Except as provided in this Section 5.4, the General Partners shall be paid a fee (the "Fee") at the annual rate of (i) one-half (1 /2) of one per cent (I%) of the Invested Assets of the Partnership, other than mortgages receivable and subordinated land leases plus (ii) one per cent (1%) on mortgages receivable and subordinated land leases plus (iii) ten percent (10%) of the remainder of (1) the aggregate sales price of properties sold during the applicable fiscal year minus (2) their aggregate original cost, costs of improvements and costs of sale. The Fee shall be based on each fiscal year of the Partnership. The -Fee shall be computed within sixty (60) days after the end of each quarter by the Partnership on an interim basis, on the basis provided in the first sentence of this Section 5.4(b). Such computations shall be based on the Partnership's applicable quarterly financial statement and shall be in reasonable detail. A copy of such computation shall be promptly delivered to each General Partner, accompanied by payment of the interim fee shown to be payable. Such quarterly payments for each fiscal year shall be subject to adjustment within twenty (20) days after receipt by the Partnership of the audited financial statements for such fiscal year in the amount stated in the first sentence of this Section 5.4(b). The Partnership may make advances to the General Partners in any quarter, which advances shall be applied against the interim quarterly payment. For purposes of this Agreement the term "Invested Assets of the Partnership" shall mean the aggregate of all of the assets of the Partnership as at the end of each fiscal year, on a book or tax basis, whichever is greater, without deduction for (i) mortgages and other security interests to which such assets are subject, (ii) depreciation and (iii) amortization, but excluding (a) cash and cash items, (b) amounts due from managing agents, (c) rents and other receivables (not including mortgages receivable or other receivables arising from the sale of Invested Assets), (d) tenant's rent security, (e) prepaid expenses and deferred charges, and (f) obligations of municipal, state and federal governments and governmental agencies, other than securities of the FHA and VA and the Federal National Mortgage Association and securities issued by governmental agencies that are backed by a pool of mortgages, provided, that with respect to investments in unconsolidated ventures "Invested Assets" shall mean the Partnership's pro rata interest in the assets of the unconsolidated venture according to the books and records of the unconsolidated venture as at the end of the last fiscal year rather than the balance sheet item of the Partnership with respect thereto. SECTION 5.5. Outside Activities. Any General Partner, any Affiliate of a General Partner, and any partner, director or officer of any General Partner or Affiliate shall be entitled to and may have business interests and engage in business activities in addition to those relating to the Partnership, including business interests and activities which may be in direct competition with the Partnership, and may own interests in the same properties as those in which the Partnership owns an interest. Neither the Partnership nor any of the Limited Partners shall have any rights by virtue of this Agreement in any independent business ventures of any General Partner, any Affiliate of a General Partner or any partner, director or officer of any General Partner or - 15 - Affiliate. None of the General Partners and no Affiliate of any General Partner shall have any obligation to allow the Partnership or its Partners to invest in any property of any General Partner or any of their Affiliates. The Partnership may purchase real estate properties, equipment, supplies and services from the General Partners and their affiliates, and may sell real estate properties and services to them and may also participate in the acquisition of properties and other transactions with the General Partners and their affiliates, provided that such purchases, sales and participations shall be on terms and conditions similar to those entered into at arm's length by unaffiliated parties in the geographic area involved and provided, further, that the Partnership shall obtain and make available to the Limited Partners upon request an appraisal of each real estate property so purchased or sold by an independent appraiser belonging to a recognized professional society of appraisers. From time to time the Partnership and the General Partners and their Affiliates may jointly use office space, office equipment and supplies, telecommunications equipment, office staff and other office services on terms that are not disadvantageous to the Partnership.SECTION 5.6. Indemnification of General Partners. The Partnership shall indemnify and hold harmless each General Partner as follows: (a) In any threatened, pending or completed action, suit or proceeding to which a General Partner or a partner, officer, director, employee or agent of a General Partner ("Indemnitee") was or is a party or is threatened to be made a party or is otherwise involved by reason of the fact that he or it is or was a General Partner of the Partnership or a partner, officer, director, employee or agent of a General Partner, the Partnership shall indemnify such Indemnitee to the fullest extent permitted by law against expenses, including attorney's fees, judgments and amounts paid in settlement, actually and reasonably incurred by such Indemnitee in connection with such action, suit or proceeding, if the Indemnitee acted in good faith and in a manner he or it reasonably believed to be in or not opposed to the best interests of the Partnership and, with respect to any criminal proceeding, had no reasonable cause to believe that his or its conduct was unlawful and provided that such Indemnitee's conduct does not constitute gross negligence, or willful or wanton misconduct. The termination of any action, suit or proceeding by judgment, order, or settlement shall not, of itself, create a presumption that such Indemnitee did not act in good faith and in a manner that he or it reasonably believed to be in or not opposed to the best interests of the Partnership or had reasonable cause to believe that his or its conduct was unlawful. Notwithstanding the foregoing, neither a General Partner nor any partner, officer, director, employee or agent of a General Partner or of the Partnership shall be indemnified from any liabilities, costs and expenses incurred by it in connection with any claim or settlement involving allegations that federal or state securities laws were violated unless there has been a successful adjudication on the merits as a result of a trial or such claim has been dismissed with prejudice on the merits by a court of competent jurisdiction and such indemnification is specifically approved by a court which shall have been advised as to the current position of both the Securities and Exchange Commission and the Commissioner of Corporations of the State of California regarding indemnification for violations of securities laws. (b) Any indemnification under Section 5.6(a) above, unless ordered by a court. shall be made by the Partnership only as authorized in the specific case and only upon a determination by independent legal counsel in a written opinion that indemnification of the Indemnitee is proper in - 16 - the circumstances because the Indemnitee has met the applicable standard of conduct. Any such indemnification shall be made only out of the assets of the Partnership. In no event may an Indemnitee subject the Limited Partners, the General Partners or Assignees to personal liability by reason thereof.(c) The Partnership may purchase and maintain insurance on behalf of any General Partner and such other Persons as the Managing General Partner shall determine against any liability which may be asserted against or expense which may be incurred by such Person in connection with Partnership activities whether or not the Partnership would have the power to indemnify such Person against such liability under the provisions of this Agreement. SECTION 5.7. Exculpation. The General Partners shall have no liability to the Limited Partners for the return of their Capital Contributions or for any loss, damage, liability or expense arising out of this Agreement or the business of the Partnership except as caused by gross negligence, misconduct in the performance of their fiduciary duties to the Limited Partners, violation of any of the provisions of this Agreement or as may elsewhere be expressly provided. ARTICLE VI Rights and Obligations of Limited Partners SECTION 6. 1. Limitation of Liability. A Limited Partner shall not be personally liable for losses or debts of the Partnership except as provided in the Delaware Act. In accordance with law, a limited partner of a partnership may, under certain circumstances, be required to return to such partnership amounts previously distributed to him as a Return of Capital. It is the intent of the Partners that no distribution to any Limited Partner pursuant to this Agreement shall be deemed a return or withdrawal of capital, even if such distribution represents, for federal income tax purposes or otherwise (in full or in part), a distribution of depreciation or any other non-cash item accounted for as a loss or deduction from or offset to the Partnership's income, and that no Limited Partner shall be obligated to pay any such amount to or for the account of the Partnership or any creditor of the Partnership. However, if any court of competent jurisdiction holds that, notwithstanding the provisions of this Agreement. any Limited Partner is obligated to make any such payment such obligation shall be the obligation of such Limited Partner and not of any General Partner, provided, however, that Partnership assets must be exhausted before any Limited Partner shall be liable for Partnership obligations. SECTION 6.2. Management of Business. No Limited Partner (other than a General Partner in his or its capacity as such) shall participate in the control of the Partnership's business. SECTION 6.3. Outside Activities. A Limited Partner shall be entitled to and may have business interests and engage in business activities in addition to those relating to the Partnership, including business interests and activities in direct competition with the Partnership. Neither the Partnership nor any of the Partners shall have any rights by virtue of this Agreement in any independent business ventures of any Limited Partner. - 17 - SECTION 6.4. Rights of Limited Partners Relating to the Partnership. In addition to other rights provided by this Agreement or by applicable law, the Limited Partners shall have the following rights relating to the Partnership: (a) Upon the affirmative vote of a Majority Interest, the Limited Partners may require the Partnership to sell all or substantially all of the assets of the Partnership, and no such sale shall be effected without the affirmative vote of a Majority Interest. (b) The Limited Partners shall have the right to have the Partnership's books kept at the principal place of business of the Partnership, and a representative designated by a Majority Interest shall have the right, exercisable at all reasonable times and at the Limited Partners' expense, to inspect and copy any of them. Each Limited Partner has the right, subject to such reasonable standards as may be established by the General Partners, to obtain from the General Partners from time to time upon reasonable written demand for any purpose reasonably related to the Limited Partner's interest as a Limited Partner: (i) true and full information regarding the status of the business and financial condition of the Partnership, (ii) a current list of the name and last known business, residence or mailing address of each Partner; (iii) a copy of this Agreement and the Certificate of Limited Partnership and all amendments thereto, together with executed copies of any powers of attorney pursuant to which this Agreement and any Certificate and all amendments thereto have been executed; and (iv) such other information regarding the affairs of the Partnership as is just and reasonable. (c) Each Limited Partner shall have the right to have a formal accounting of Partnership affairs whenever circumstances render it just and reasonable, but conducting such accounting shall be at the Limited Partner's own expense. (d) Limited Partners who are the holders of 50% or more of the Percentage Interests held by Limited Partners may at any time propose the termination of the Partnership. Within ten days after receipt of any such proposal, the Managing General Partner shall call a meeting of all Limited Partners for the purpose of voting on such proposal. The affirmative vote of a Majority Interest shall be required to terminate the Partnership. (e) The Managing General Partner, on behalf of the Partnership, shall take such action or exercise such rights with respect to the matters discussed in this Section 6.4 as is called for by a vote of the Limited Partners or as is requested by a Limited Partner, as the case may be, pursuant to this Section 6.4. ARTICLE VII - 18 - Books, Records and Accounting SECTION 7. 1. Records and Accounting. The Managing General Partner shall keep or cause to be kept complete and accurate books with respect to the Partnership's business. The books of the Partnership shall be kept on an accrual basis for tax and other Partnership purposes and shall at all times be maintained at the principal office of the Partnership. The books of the Partnership shall contain the names, addresses and Capital Contributions of the Partners. SECTION 7.2. Fiscal Year. The fiscal year of the Partnership shall be October I to September 30. SECTION 7.3. Tar Elections. The Managing General Partner, in its sole discretion, shall determine whether or not to make any permitted election for Federal or state income tax purposes. The Managing General Partner may, but shall not be required to, make the election under Section 754 of the Code in accordance with applicable regulations thereunder, subject to the reservation of the right to seek to revoke any such election upon the Managing General Partner's determination that such revocation is in the best interests of the Limited Partners. SECTION 7.4. Annual Reports. (a) As soon as practicable, but in no event later than 120 days, after the close of each fiscal year, the Managing General Partner shall mail or deliver to each Limited Partner and each Assignee of record on the closing date of that fiscal year a report containing financial statements of the Partnership for the fiscal year, including a balance sheet, a statement of operations and a statement of Partners' equity and changes in financial position, such statements to be audited and certified in accordance with generally accepted accounting principles and procedures by a firm of independent public accountants selected by the Managing General Partner. (b) As soon as practicable after the close of each fiscal year, the Managing General Partner shall, on the basis of information reasonably available to it and supplied to it by Partners and Assignees, furnish to each Limited Partner and Assignee a report providing such information as may be reasonably required by the Code for completion of their respective Federal income tax returns. ARTICLE VIII Allocations and Distributions SECTION 8. 1. Income and Loss. (a) Except as herein provided or as otherwise required under Section 704(c) of the Code, each item of income, gain, loss, deduction, and credit of the Partnership shall be determined using the accrual method and shall be allocated for tax purposes among the Partners in accordance with their Percentage Interests; provided, however, that on any liquidation of the Partnership all income and gain shall be allocated to Partners with deficit Capital Accounts until such Accounts have been restored to zero, while all loss and deduction shall be allocated to Partners with positive Capital Accounts until such Accounts have been reduced to zero, with any residual - 19 - income, gain, loss, deduction or credit being allocated to all Partners in accordance with their Percentage Interests.(b) If a Unit is transferred during a year, the income, gain, loss, deduction and credit allocated with respect to the Unit so transferred shall be prorated (without any interim closing of the books) between the transferor and the transferee on a daily or other reasonable basis in accordance with the periods of time during such year such Unit was held by the transferor and by the transferee as required or permitted by Section 706 of the Code. (c) If the Percentage Interest of a Limited Partner is changed during a taxable year for any reason other than the transfer of a Unit to another person, such Limited Partner's share of the Partnership's income, gain, loss, deduction and credit shall be determined by taking into account his varying Percentage Interests in the Partnership during the taxable year on a daily, or other reasonable basis (without any interim closing of the books) as required or permitted by Section 706 of the Code. (d) If Section 704(c) of the Code shall require the Partnership, in any year, to allocate any income, gain, loss, deduction or credit of the Partnership in a manner other than in accordance with the Partner's Percentage Interests, the General Partners may, for that year, allocate any remaining income, gain, loss, deduction and credit of the Partnership (to the extent Section 704(c) or other provisions of the Code do not require otherwise) in such manner as will counterbalance (to the extent possible) the application of Section 704(c) in such year. SECTION 8.2. Distributions. (a) At any time the Managing General Partner deems appropriate, the Cash Available for Distribution shall be calculated and, if the Managing General Partner deems appropriate in its sole discretion, all or any portion thereof shall be distributed to the Partners of record on the Record Date set for the distribution, and each Partner shall receive his share thereof, subject to Section 14.3 hereof, in accordance with their Percentage Interests. (b) Nothing in this Agreement or this Section shall serve as a limitation on the Managing General Partner's right to retain or use the Partnership's assets or its revenues as, in the opinion of the Managing General Partner, may be required to satisfy the anticipated present and future cash needs of the Partnership, whether for operations, liabilities, expansion, improvements, acquisition or otherwise. SECTION 8.3. Distributions of Partnership Property. In its sole discretion, the Managing General Partner may distribute to all of the Partners of record on the Record Date set for such distribution Partnership Property other than Cash Available for Distribution, any such distribution to be in accordance with their Percentage Interests. In its sole discretion, the Managing General Partner may distribute to all of the Partners of record on the Record Date set for such distribution additional Units or securities of the Partnership permitted pursuant to the terms of this Agreement. Section 8.4. Upholding Tax Benefits. - 20 - Notwithstanding anything to the contrary herein, Partners with deficit Capital Accounts resulting in whole or in part from allocations of loss or deduction attributable to non-recourse debt shall. to the extent possible, be allocated income or gain in an amount no less than the excess of the outstanding principal amount of such debt over the adjusted bases of the property securing that debt (the "minimum gain") and at a time no later than the time at which the minimum gain is reduced below the sum of the deficit account balances. ARTICLE IX Power of Attorney SECTION 9. 1. Power of Attorney (a) Each Limited Partner hereby constitutes and appoints the Managing General Partner (and any successor by merger, assignment, election or otherwise) with full power of substitution as his true and lawful agent and attorney-in- fact, with full power and authority in his name, place, and stead to execute, swear to, acknowledge, deliver, file and record in the appropriate public offices all (A) certificates and other instruments (including, at the option of the Managing General Partner, this Agreement) and amendments thereof which the Managing General Partner deems appropriate or necessary to qualify, or continue the qualification of, the Partnership as a limited partnership (or a partnership in which the Limited Partners have limited liability) in all jurisdictions in which the Partnership may conduct business, (B) instruments which the Managing General Partner deems appropriate or necessary to reflect any amendment, change or modification of this Agreement in accordance with its terms, (C) conveyances and other instruments which the Managing General Partner deems appropriate or necessary to reflect the dissolution and liquidation of the Partnership pursuant to the terms of this Agreement and (D) instruments relating to the admission of any Partner pursuant to Article XII. (b) The foregoing power of attorney is hereby declared to be irrevocable and a power coupled with an interest, and it shall survive and not be affected by the death, incompetency, dissolution, disability, incapacity, bankruptcy or termination of any General Partner and any Limited Partner and shall extend to such Partner's heirs, successors and assigns. Each such Partner hereby agrees to be bound by any representations made by the Managing General Partner, acting in good faith pursuant to such Power of Attorney: and each such Partner hereby waives any and all defenses which may be available to contest, negate or disaffirm the action of the Managing General Partner taken in good faith under such Power of Attorney. Any General Partner and each Limited Partner shall execute and deliver to the Managing General Partner, within five days after receipt of the Managing General Partner's request therefor, such further designations, powers of attorney and other instruments as the Managing General Partner deems necessary to effectuate this Agreement and the purposes of the Partnership. ARTICLE X Issuance of Certificates SECTION 10. 1. Issuance of Certificates. For purposes of facilitating transfers of the Units under the Transfer Agent Agreement, the Managing General Partner shall cause the Partnership to issue for and in the name of each Limited Partner one or more Certificates which shall evidence the - 21 - number of Units owned by such Limited Partner. No Certificate shall be issued representing a fraction of a Unit. Unless the Limited Partner otherwise elects, he shall receive one Certificate in denomination equal to the number of all his Units. A Limited Partner may elect to receive Certificates in such smaller denominations as he may designate. The Certificates shall be in such form as shall be approved by the Managing General Partner in conformity with law and any applicable rule, regulation, guideline or requirement of any stock exchange on which the Units are or will be listed for trading. The Certificates shall be consecutively numbered, shall be entered as they are issued in the Transfer Record and shall state the Limited Partner's name, the number of Units and such other matters as may be required by law and any applicable rule, regulation, guideline or requirement of any stock exchange on which the Units are or will be listed for trading. The Certificates shall be signed by any of the officers of the Managing General Partner or any General Partner and may be sealed with the seal of the Partnership (if required) or a facsimile thereof. If any Certificate is countersigned by the Transfer Agent, the signature of the officer of the Managing General Partner thereon may be a facsimile. SECTION 10.2. Lost, Stolen, or Destroyed Certificates. The Partnership shall issue a new Certificate in place of any Certificate previously issued if the registered owner of the Certificat e: (a) makes proof by affidavit, in form and substance satisfactory to the Managing General Partner,