X. Xxxx Price Realty Income Fund III, America s Sales-Commission-
Free Real Estate Limited Partnership
Amended and Restated Agreement of Limited Partnership
Section 21. Indemnification
Section 21.1 Agreement to Indemnify. To the maximum
extent permitted by law, the Partnership shall indemnify, save
harmless and pay all judgments and claims against the General
Partner or its Affiliates, from any liability, loss or damage
incurred by them or by the Partnership by reason of any act
performed or omitted to be performed by them in connection with
the business of the Partnership, including costs and attorneys
fees and any amount expended in the settlement of any claim of
liability, loss or damage, provided that, (a) if such liability,
loss, damage or claim arises out of any action or inaction of a
Affiliate, such actions or inactions must have occurred while
such parties were engaged in activities which could have been
engaged in by the General Partner in its capacity as such; (b) if
such liability, loss, damage or claim arises out of any action or
inaction of a General Partner or an Affiliate, the General
Partner or the Affiliate (as the case may be) must have
determined, in good faith, that such course of conduct was in, or
not opposed to, the best interests of the Partnership; (c) such
conduct did not constitute negligence or misconduct; and (d) any
such indemnification shall be recoverable only from the assets of
the Partnership and not from the assets of the Limited Partners.
All judgments against the Partnership and the General Partner and
its Affiliates, wherein the General Partner or its Affiliates are
entitled to indemnification, must first be satisfied from
Partnership assets before the General Partner, its Affiliates and
broker-dealers are responsible for these obligations. Nothing
contained herein shall constitute a waiver by any Limited Partner
of any right which he may have against any party under federal or
state securities laws. As used in this Article 21, the term
Affiliate shall mean any person performing services on behalf
of the Partnership who: (1) directly or indirectly controls, is
controlled by, or is under common control with the General
Partner; (2) owns or controls 10% or more of the outstanding
voting securities of the General Partner; (3) is an officer,
director, partner or trustee of the General Partner; or (4) if
the General Partner is an officer, director, partner or trustee,
is any company for which the General Partner acts in any such
capacity.
Section 21.2 Limitations. Notwithstanding Paragraph
21.1, a General Partner, its Affiliates and broker-dealers shall
not be indemnified pursuant to Paragraph 21.1 from any liability,
loss or damage incurred by them in connection with (a) any claim
or settlement involving allegations that federal or state
securities laws were violated by the General Partner, its
Affiliates or broker-dealers unless: (A) there has been a
successful adjudication on the merits of each count involving
alleged securities law violations as to the particular indemnitee
and the court must approve any indemnification of litigation
costs, (B) such claims have been dismissed with prejudice on the
merits by a court of competent jurisdiction as to the particular
indemnitee and the court must approve any indemnification of
litigation costs,, or (C) a court of competent jurisdiction
approves a settlement of the claims against a particular
indemnitee, and finds that indemnification of the settlement and
related costs should be made, after being advised as to the
current position of both the Securities and Exchange Commission,
the California Commissioner of Corporations, the Massachusetts
Securities Division, the Tennessee Securities Division and the
Missouri Division of Securities regarding indemnification for
violations of securities law; or (b) any liability imposed by
law, including liability for negligence or misconduct.
